Hey, Ross here:
Yesterday, Trump appointed Fed Governor Stephen Miran gave a speech where he said the Fed needed to cut rates deeper and faster.
While the other governors don’t agree with him for now…
There is definitely a chance we may see more than two rate cuts for the year.
That would just add to the momentum of this bull market.
And as today’s chart shows, this momentum can persist far longer than most expect.
Chart of the Day
This chart shows how the S&P 500 has performed each time the index has experienced a sharp momentum “rebound”.
In this case, the rebound is defined as the S&P 500 falling by at least 10% below its 200-day moving average and then bouncing back to at least 3% above it.
We’ve seen this V-shaped momentum rebound happen quite a few times dating back to the 50s. Here they are below:
As you can see, in most of these cases the market gained a median of 52% with the momentum cycle lasting 33 months.
Keep in mind that, as defined here, that 52% median gain is calculated beginning from when the S&P 500 has rebounded at least 3% above its 200-day moving average…
NOT at the cycle bottom.
If you look at the bottom of the table above, you can see this signal triggered on May 16 this year, more than a month after I called the April lows.
The S&P 500 was already up by over 20% from the lows by then.
In other words, the historical data shows that this bullish momentum could persist for A LOT longer.
As I said, I don’t expect a market crash this year or the next – despite how high valuations are.
The truth is, momentum is a far more powerful factor than valuations.
And those who miss participating in this bullish momentum regime out of fear of overvaluations will likely regret it.
But – there’s also a critical mistake traders make when participating in these bullish momentum regimes.
I elaborate below.
P.S. Later this evening, I’m releasing my next edition of 2 Trades in 2 Minutes. If you want priority access, get on the SMS list by texting the word “trade” to 87858 and you’ll get them the second they’re released.
Insight of the Day
That large speculator short position could counterintuitively fuel the market rally instead
I wouldn’t be surprised if we see a bit of a pullback in the coming weeks.
As I showed you last week, historical data tells us that, when the Fed cuts at market highs…
It’s perfectly normal for us to see choppy action in the month after.
Combined with such a large short position against the market, we could very well see the market pull back in the coming weeks.
But once we extend the time horizon out, the picture becomes increasingly positive.
I don’t expect a crash anytime within the next year.
And with at least two more Fed cuts on the way…
That means that, pretty soon, those shorts will be forced to cover their positions…
Which would just throw fuel on the market rally.
That’s something we can use to our advantage.
And later this afternoon at 1 p.m. Eastern…
I’m going LIVE to break down exactly what I see on the horizon…
As well as to show you a high upside/low risk strategy that’s previously yielded returns like 287%… 542%… and 806% – all in a matter of weeks or even days.
So click here to guarantee your seat for my live breakdown if you haven’t already…
And I’ll see you in a few hours at 1 p.m. ET sharp.
P.S. This is a completely SEPARATE session from my live YouTube session happening at 9AM ET later this morning.
That one will be more of me breaking down the market, and it’s completely open to the public.
The 1PM live session is invite only – and I’ll be revealing one of my top money-making strategies for the market… something I would never do on a public YouTube.
Customer Story of the Day
“Ross is very honest and makes sure you understand what he is reviewing. If you ask a question in the chat box, he WILL answer it and review the specific stock answer. Ross is one of the best to learn from.
Thank you, Ross. I can see why you left Wall Street. You are helping real customers in the real world.”
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
