Dear Reader,
I hope your afternoon is off to a good start. I know there have been questions about Midday Momentum as a show. Let's take one step at a time. We have answered your calls for a return of our morning show format - which we started doing as well. And within the next week or two, I'll likely bring back Midday Momentum on a bi-weekly basis, and beyond that I'm working on how we'll negotiate the impending debt ceiling crisis. (For those who want to move now, though, I've got a great longshot debt-ceiling trade below the jump.)
Before then, though - tomorrow, actually - I'll be teaming up with Kenny Glick. We'll be ready (and streaming live) the instant the FOMC breaks cover and speaks to the media. Click below to add Trade the Fed to your calendar.
Add event to calendar
As we've seen with every other meeting, the markets can make extremely lucrative moves for those who're ready just a few minutes ahead of time. We'll have our finger on the trigger, ready to "trade the Fed" and make some fast cash. Keep your eyes on your inbox for a special invitation to tomorrow afternoon's event.
That's tomorrow - here's what's on the agenda today. The market is back under pressure. . Crude oil is peeling lower due to demand concerns (don't panic), and profit taking is rather common ahead of Federal Reserve meetings and Apple Inc.'s (AAPL) earnings report.
As I mentioned this morning, I want to talk about finding the bottom in this market. It all comes down to that chart I showed you - the one that lets you know it's time to buy everything that isn't nailed down.
Let's dig even deeper into the most important chart in the entire market...
When Insider Money Talks, I'm Listening - You Should, Too
Below is the chart I shared this morning. Take a look...
Do you see those blue spikes at the top of the chart? They happened in October 2008, March 2009, August 2011, January 2016, and April 2020.
Those were all market bottoms. Now, here's the 10-year chart on the S&P 500...
Right after Lehman Brothers crashed, the 2009 "Great Recession" market bottom, the 2011 European financial crisis, the 2015 yuan devaluation crisis, and the 2020 "COVID Crash."
Those spikes are the sum total of all insider buying at S&P 500 companies as compared to insider selling. Insiders, as we discussed, are the people who have major, influential roles at these companies. The C-suite types. Think CEOs, CFOs, board members, 10%-plus stake owners, and other executives.
So when we define insider buying, we are talking about executives using their own money to buy their own stock. When they do so, they must file a Form 4 document with the SEC - the information's right there for anyone interested to know. The chart above is a calculation of insider buying against insider selling.
And as I intimated before, the ratio is strongest at the market bottoms.
Typically there is a shift in monetary or fiscal policy that benefits the market. And when that happens, the insiders all buy at the same time.
If you look at the chart right now, we don't have a spike. Nowhere close. Which suggests to me that the bottom is not in.
Now, what should investors be watching right now?
The answer is in the energy and financial sectors. Each day, I break down the top purchases of insider buying among executives at every major public company and publish it in our Flashpoint Trader premarket report. In times of positive momentum and negative momentum, this can help you identify a "fair value" floor.
You see, executives are buying their own stocks - at a price that they believe to be a great long-term value. So, once you have these numbers - and you start to quantify around these figures, you can start to sell puts and engage in other trading strategies that can maximize your upside.
Over the last 10 days, here are the largest purchases among insiders at big companies.
Go get 'em - you're looking at an oasis of green in a sea of red, which brings me to the broader market...(click here for more information about insider buying and selling)
Today's Momentum Reading
WORLD'S BIGGEST INDICATORS
Recap: The World's Biggest Indicator (Momentum) is Red... This is a brutal selloff to start the week. I'd be very cautious and start to add hedges. In fact, we've been adding short positions as hedges to our existing positions in the Flashpoint Trader portfolio. We're also buying into volatility ahead of the Fed minutes.
Hot Long Shot
This is a debt ceiling bomb trade. Buy-to-open the ProShares UltraPro Short QQQ ETF (SQQQ) May 19, 2023 $35 calls at $0.55 or less.
What You Missed
Take a look at this.
That's a tiny snapshot of one of America's most prolific oil fields - the Permian basin in West Texas.
Underneath the ground are 71 billion barrels of untapped oil.
Last year, the area's big guns made almost $200 billion between them.
And all told, the entire sector is worth roughly $7.3 trillion.
Now, what if I told you that you could claim a piece of that multitrillion-dollar fortune?
And you'd barely need to lift a finger to do it.
That's because I've been monitoring events closely in the Permian.
And I've identified an imminent mergers race between 400 select companies in the region.
The best thing is...
You don't need to care about 395 of them.
Because I whittled it down to just five small companies that could be the big winners in this epic mergers race.
This is the biggest opportunity in oil in almost two decades.
So click here to find out how to get the names... ticker symbols... and precise trade instructions for each company.
And do it today...
Because the mergers race I just mentioned is already underway.
Stay Liquid,
Garrett
The post How to Time the Bottom of the Market with One Chart appeared first on Midday Momentum.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.