Hey, Ross here:
Welcome to a new trading week.
Whatever Powell decides on Wednesday will have a huge impact on where the market moves next.
In the meantime, the chop fest continues – but there are still a few bright spots.
Chart of the Day
Friday’s selloff was a flight from growth, with many stocks that have led the 2023 bull market falling by several percent each.
Above is the chart for this year’s clear leader – NVDA.
And right now, it’s not healthy.
Blowout earnings numbers back in late August sent the stock higher – but it didn’t last.
And now, NVDA has broken through another level of support. Even at a 12% discount from its highs, the stock has been unable to entice new buyers.
If we see another day or week of heavy selling – a big drop on above-average volume where the stock closes near the low of the session – that will be the final straw for NVDA, and investors should look out below.
But even amid the chop fest, there continue to be a few bright spots.
Insight of the Day
Understanding which sectors the money is flowing into – and being able to identify the market leaders of that sector – is critical.
The price action is telling me NVDA is under heavy institutional selling.
But that institutional money is flowing into other sectors, such as oil and gas stocks.
I highlighted these as an area of strength last month, and they continue to make upward progress.
The game now is to identify the market leaders in that sector and look for potential breakouts we can use as entry points.
If the institutions move back to tech, we’ll rotate back in as well.
That’s the nature of this game – you have to stay agile and never get too attached.
That’s why my strategies are explicitly designed to keep you flexible, so we can keep moving with and profiting from the market.
So if you want to get a hold of my high-percentage trade ideas for these market-defying sectors…
Embrace the surge,
Editor, Stock Surge Daily