Hey, Ross here:
The old market leaders have been getting hit.
Technology has weakened.
Consumer stocks have struggled.
And some traders are taking that as proof the entire bull market is falling apart.
I don’t see it that way.
Today’s charts lay out the situation.
Chart of the Day
This first chart shows the S&P 500’s net profit margin.
For Q2, that number has jumped to 15.7%.
That would be the highest level in FactSet’s data going back to 2009.
Now, Alphabet had a big impact on that number.
But even if you remove Alphabet completely…
The margin still comes in around 14.4%.
That would still be the second-highest reading on record.
So this is not one giant company making the whole market look better than it really is.
Seven of the 11 major sectors are expanding their margins compared with last year.
Eight are running above their five-year averages.
And analysts expect margins to stay close to 15% through Q3 and Q4.
Corporate America is making real money – lots of it.
So the fuel behind this market has not disappeared.
But now take a look at the next chart.
This chart shows the short- and medium-term health of the major stock sectors.
And the split is pretty clear.
Energy looks strong.
Financials look strong.
Healthcare and Utilities are also holding up well.
But Technology, Consumer Discretionary and Communications are sitting in much weaker territory.
That does not look like broad market deterioration to me.
It looks like a healthy rotation.
The old leaders are losing ground…
While completely different sectors start taking control.
In other words, big money does not appear to be abandoning the market.
It is changing horses.
I explain below.
Insight of the Day
The smart money can dump the old leaders without dumping the market
This is where a lot of traders get fooled.
They see technology stocks getting sold…
And assume the big funds have turned bearish on everything.
That is not how institutional money works.
A fund can sell billions of dollars’ worth of old winners…
Then push that same money straight into Energy, Financials, Healthcare or another group starting to lead.
Its overall stock exposure may barely change.
But the portfolio underneath can look completely different.
That is why an index can hold up…
Even while the stocks that carried it higher start falling apart.
The money did not vanish – it moved.
And that movement is exactly what I watch.
Because when a large fund starts building a serious position, it cannot hide forever.
The buying starts leaving footprints.
A stock holds up while its peers weaken.
Volume starts building.
Sellers keep showing up – but price refuses to break.
Then the stock starts separating from the pack.
That is where the opportunity begins.
And tomorrow, Tuesday July 28 at 11 a.m. Eastern…
I’m going LIVE to demonstrate the strategy I use to track those “smart money” footprints.
It is the same strategy that has helped us find moves of:
155% in 150 days…
212% in 165 days…
424% in less than six months…
Even 524% in 13 months.
I’ll show you how I look for the stocks the big funds may be quietly moving into…
Before the rest of the market catches on.
The session is free, but we expect a packed room.
So click here to reserve your seat early…
And I’ll see you tomorrow at 11 a.m. ET.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
iOS: https://apps.apple.com/us/app/goto/id1465614785
Android: https://play.google.com/store/search?q=goto&c=apps
Customer Story of the Day
“★★★★★
I’ve had a great experience with Ross Givens and Traders Agency.
Ross does an excellent job of breaking down complex market concepts into easy-to-understand lessons, making it valuable for both new and experienced traders.
The educational content, market insights, and trade ideas are well-researched, and the customer support team has always been responsive and professional.
I appreciate the focus on teaching the “why” behind each strategy rather than just giving alerts.
If you’re looking to improve your trading knowledge and confidence, I highly recommend giving Traders Agency a try.”
Ross Givens
Editor, Stock Surge Daily
