Hey, Ross here:
And let’s end the week with a chart that shows us why we should proceed with extra caution moving forward.
Chart of the Day
The NASDAQ 100 gapped up yesterday on the back of Nvidia’s blockbuster earnings.
But it didn’t last, and the market sold off, with all indexes closing significantly lower. Intraday moves were huge – and the bears ultimately came out on top.
In other words, the markets closed down on good news – which is a clear sign that we should be very cautious moving forward.
Because if you don’t, then the biggest and fastest gains to be had from the AI revolution could pass you by.
Insight of the Day
The market’s reaction to news – both good and bad – can tell us a lot
In a bear market, like we had in 2022, what you want to see is the market going UP on BAD news. This is the sign that the low is in and buyers are coming back in.
We saw this on October 13, 2022. After the inflation report showed the worst numbers yet – far worse than expectations, the market gapped down and opened a full 3% lower than it was the day before.
However, stocks immediately began to rally, and the index surged 5% that day. This signaled that the low was in.
On the other hand, in a bull market, we want to watch for times when the market goes DOWN on GOOD news – just like what happened yesterday.
The focus now should be preserving your gains.
Still, that doesn’t mean we’re not keeping any open positions or taking on any new ones. We just have to be extremely selective.
That’s why I’m going LIVE right now to demonstrate the strategy that I think works the best in this current environment (even if the bull market is over).
And I’ll explain everything inside.
Embrace the surge,
Editor, Stock Surge Daily