Hey, Ross here:
Welcome to a new trading week. Here’s where I see the market going in a single chart.
Chart of the Day
For the overall market, I remain bullish and expect stocks to move higher over the next few months.
In the weekly chart of the S&P 500 above, I’ve drawn in yellow what I expect to see,
Notice the wedging action we have seen since markets bottomed in October. This is constructive action.
Stocks have done the usual “backing and filling” to carve out a bottom and set up for the next leg higher.
P.S. Want me to send you special trade prospects and potential market moves directly to your phone? Text the word ross to 74121.
Insight of the Day
The market’s path higher will not be an equal one.
Yes, I believe the market is going to keep continuing its path higher – even with some pullbacks along the way.
But that path will not be an equal one. Some groups of stocks will do much much better than the rest.
In order to achieve above average returns, however, we must continue to focus on the best stocks in the best groups. This is where we tend to find the biggest winners.
Right now, some groups look better than others.
For example, fiber optics stocks are being massacred – but residential builders are trending upward.
My favorite trade setup, when I can find it, is a group or sector setting up in a breakout pattern and a top stock within that group setting up at the same time.
This combination of a group move and an individual stock within that group can lead to a strong advance higher.
One group that looks appetizing to me here is leisure gaming.
Embrace the surge,
Editor, Stock Surge Daily