Back in January, I shared the "the one chart to rule them all" with you.
It's a chart I was looking at then, and just about two months later, it's a chart that I'm still coming back to - several times a day, I might add.
Because this chart is becoming more, not less, important as we move into spring.
This beauty is showing us that the way is opening for the markets to hit fresh all-time highs - despite Boeing, despite trade, and despite nearly any thing you can throw at it.
This is a market that took no less than three "gut shots" in the past 10 trading days, and it continues to power upward.
So now, I'm going to show you why there are bigger, better profit opportunities ahead - and name a stock for you to get the absolute most upside out of what promises to be a remarkable bullish run...
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This Chart Doesn't Have an "Expiration Date"
Here it is, once again, from Jan. 23:
At the time, the market was putting 2,600 in the rearview mirror, on the way to the 2,800 to 2,815 range (the red "2" in the chart), which was the new resistance level at that time.
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I predicted at the time that that resistance level should, even with all the turbulent, news-driven price action, nevertheless attract prices almost like a magnet.
And that's just what happened. The market has, over the past 18 sessions, had three attempts to break and stay above the upper edge of that (formidable) resistance zone.
Now that we're "there," let's look at an updated version of our "one chart to rule them all" and then talk about our game plan from here:
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The numbers below refer to the numbered red circles in the chart:
- We closed well above 2,815 on Friday, and that closely-watched resistance level brought in many traders and investors from the sidelines.
- The all-time highs on the S&P 500 - at 2,940.91, that's less than 3.4% above where we are now, well within striking distance.
- One very compelling reason to believe that run can happen is, strangely enough, last week's pullback to the "3" on the chart above - it was only a -3.36% on the heels of a whopping 20% run-up from the Dec. 26 lows. A pullback that shallow is a telling characteristic of a strong bull run.
- The main support level on the chart is down at the old resistance level of 2,600. That's 8.3% below the 2,815 line. And a testament to the strength of this rally is that until we get below that level, the bull case is still unquestionably in place.
- Lastly - the lower line on the chart above is the VIX - the Chicago Board of Options Exchange Volatility Index, also called the Fear Index. The VIX shows that we have retreated to levels not seen since last October. Almost all of the fear built at the end of last year has evaporated. A 20% run-up will do that...
The bottom line? Breadth - which is to say the number of stocks participating in the "up" move - in this rally is stronger than any we've seen in years; this isn't just the mega-tech stocks pulling everyone else along. Lots of companies are getting into the act.
So pullbacks are to be bought - and I've got two great ones for us today...
How to Easily Tap the Upside in This Rally
I'm making one long recommendation right now; my paid-up subscribers will be getting trades on this stock that target triple-digit gains.
Boeing Co. (NYSE: BA) continues to struggle to find its footing in the wake of the Ethiopian Airlines tragedy and subsequent questions over safety of its 737 Max 8 aircraft. I don't expect a quick snapback for this stock. It takes time to deconstruct the most likely scenarios and determine the path forward. News over the weekend revealed that the black box data shows similarities between the October and February crashes. Boeing shares came within $2 of the immediate post-incident trading, but there is plenty of upside there for the intermediate to long term. Pick an entry point you're comfortable with, and proceed accordingly.
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About the Author
D.R. Barton, Jr., Technical Trading Specialist for Money Map Press, is a world-renowned authority on technical trading with 25 years of experience. He spent the first part of his career as a chemical engineer with DuPont. During this time, he researched and developed the trading secrets that led to his first successful research service. Thanks to the wealth he was able to create for himself and his followers, D.R. retired early to pursue his passion for investing and showing fellow investors how to build toward financial freedom.