Hey, Ross here:
After the market close yesterday, the clickbait financial media wasted no time screaming about “the biggest one-day drop in the Nasdaq since October 2023”.
Not only is it tiresome, it’s also largely meaningless.
Because as the Chart of the Day shows, it actually had plenty of historical precedent.
Chart of the Day
Don’t you just love data?
This data shows that, over the last 50 yrs, there have been 8 occasions where the Nasdaq followed a double-digit year with a +0.5% loss on the opening day of the next year.
In each of those 8 cases, the following week was always positive.
Interestingly, in three of those 8 cases, the Nasdaq fell over 1% on the first trading day of the year.
And it was those cases – with the largest first-day drop in the Nasdaq – that had the biggest gains over the subsequent week.
In short, a “big” drop on the first day of the new trading year right after a winning year is not only perfectly normal…
But could also signal even more gains ahead.
Insight of the Day
The ability to “zoom out” and contextually analyze the market is a superpower.
Too many traders just let the clickbait media jerk their chain around.
A barrage of sensationalist headlines about a perfectly normal market move is all it takes for them to abandon their strategy and start following the crowd.
You can’t let this happen to you – it’ll ruin your trading.
You need to be able to “zoom out” and contextually analyze the market. That’s part of the idea behind this newsletter.
The truth is, pullbacks like yesterday are normal and necessary in a blazing rally like the one we’ve been in these past two months.
I’d actually be more worried if the market kept going straight up without any pullbacks – because that’s just not sustainable.
So again, don’t worry.
Let everybody else succumb to the mainstream media’s manipulation while you take advantage of the pullback to scoop up the new market leaders at cheaper prices.
This is not a cause for worry – but an opportunity.
That’s why later today at 4 p.m. Eastern, I’m going LIVE for a masterclass on exactly how to spot the new market leaders of the 2024 bull market.
You don’t want to miss this…
Because the new market leaders are likely to be small-cap stocks this time around, and they have much higher profit potential individually.
Clear your schedule…
And keep a lookout for the login details in your inbox later.
See you soon.
Embrace the surge,
Editor, Stock Surge Daily