Follow the Money to MORE New Highs!
The major averages continue to stair-step higher this month as we’re treated to MORE new all-time highs…
If you’ve followed along from the comfort of your quarantine couch, you know that we’ve been all over this move since the market started showing signs of life shortly after the pandemic lows almost one year ago.
Of course, I was never interested in trying to play the fool’s game of precisely picking the exact bottom during a market crash. Instead, I weigh the evidence and try to decide whether or not the bulls are gaining the upper hand.
Way back in May 2020, I showed you how the S&P held critical support levels like a champ at 2,800 on the weekly chart.
Then we focused our attention on 3,000 and the jump above the 200-day moving average…
Finally, we had liftoff above 3,100 after brief retest of recent lows at the end of May. Except a quick correction just before the election, it’s been smooth sailing for the past 10 months. As of early this week, the S&P is now a staggering 75% above its March 2020 lows.
Our job, as always, is simply to manage this momentum and maximize our gains!
Remember, it’s all about following the money. The political backdrop that led us to this point has been crystal clear: The Fed is going to do anything and everything to keep this market afloat. New stimulus is on the way. This money flow is unprecedented — and it’s going to continue. Don’t bet against it!
Keep it In the Money,
Chart of the Day: Jetting back to new highs?
As we once again begin to eye the reopen trade, it’s time to pinpoint the names that could deliver the fastest gains as the vaccine rollout continues into the early spring.
It’s no secret that the stock market’s recovery rally has remained incredibly strong. Yet many of the hardest hit industries remain well below their pandemic lows.
But maybe not for long…
No, the news isn’t exactly super bullish these days – and we have some time to go before we’ll get back to normal life. But the market is already beginning to look ahead to better days. Just look at airline stocks.
The US Global Jets ETF (NYSE:JETS) is taking flight again. Last week’s modest gain of abut 2.2% now has this ETF nearing a breakout above its November highs.
You might want to personally avoid flying the friendly skies right now. But riding airline stocks might be reopen trade to boost your portfolio this week…
Trading Tip of the Day
Name all the stocks that were listed on the Dow back in 1960.
You can’t do it. Neither can I.
Investors tend to lose sight of the fact that major averages are actively managed. Every few years, new and better companies are selected to replace the laggards so the averages better represent the best stocks on the market.
As a trader, you shouldn’t get too nostalgic about the stocks that posted unbelievable runs higher over the past decade. Instead, be on the lookout for the next potential market-leader you can add to your portfolio
— Greg Guenthner