With everything that's going on, it's really no wonder that the current markets are on a tailspin.
There's a lot driving this market, from new tariffs to escalating geopolitical tensions, but our Chris Johnson's not worried.
In fact, he's keeping a close eye on a significant risk out there so you won't be taken by surprise.
Plus, if you follow his recommendations, you'll come out comfortably ahead...
by Stephen Mack
The S&P 500 may be up 11% for the year, but political and economic uncertainty have some investors on edge.
We've got the one indicator to watch so you'll know exactly where stocks are headed.
Then we'll show you how to come out on top regardless of the direction...
It only feels as though the media have said everything there is to say about the market over the last three weeks of this downturn.
The talking heads are still missing something – something they're just not keen enough to grasp about all of this. But, to be fair, the big news is hard to ignore.
After all, the late week phase of the pullback took all the major indexes back to, or just below, their break-even levels as far as year-to-date returns are concerned.
That's something that should scare the hell out of investors. However, I'm still seeing signs that there is a little too much bullish enthusiasm for stocks to call that "the bottom."
Even accounting for Thursday's bounce, sell-offs have shaved just about 10% from the S&P 500's October high. In doing this, the benchmark index crashed right through the plate glass window of its 50- and 200-day moving averages. It's still sitting below those lines as of Friday midday.
So it's "official" in my book, for what it's worth: The market is embroiled in an intermediate-term bearish pattern.
Now let me show you what to do about it...
The "September slide" this past week has been excellent for my paid-up subscribers – even some positions that had been sluggish moved higher – because we were well prepared for stocks to gap lower.
We closed out two more winners in Western Digital Corp. puts, and on the "other side" of the market, DSW Inc. calls for a nice 174% and 78% in gains.
Those results certainly show how our proven "Best in Breed" (BIB) stock-picking methodology works hand in hand with portfolio balance. A mix of calls, puts, bullishness, and bearishness has helped us capitalize on the market's recent swings.
Right now, BIB is showing retailers as an area of strength for the next couple of months, which is why I've been so bullish on them here in Money Morning recently – just look at our DSW position.
Meanwhile, BIB bull's-eyed the technology sector as a laggard, and sure enough, it's no longer leading the market higher. Puts in WDC yielded a huge profit. And our other bearish plays in the sector are bouncing back in our favor.
Now let's take a look at what the market's showing us for the next four weeks or so...
The big indexes are trading at just about the same levels they were three weeks ago.
My experience tells me this means the market is at a tipping point as it searches for an ultimate direction. Seasonality and sector rotation are in play right now – as I've been saying for the past few weeks.
Change is in the air; market leadership is changing hands.
My job is to make sure you're on the right side – now, and when the "flip" happens… Full Story
No need to worry - here's what to do.
These days, there's a phrase going around so much about how the market pundits see the current markets that it's become a cliché: "cautiously bullish."
But our Chris Johnson is here to tell you why he's steadfastly bullish – and that too much caution could cost you big…
Wall Street loves the prospect of a tax bill landing on the president's desk this weekend. We're within striking distance of Dow 25,000 as I write this.
I think the markets are going to continue to soar from here, allowing for the prospect of a small pullback when and if traders try and "sell the news" of the tax bill becoming law.
More gains ahead… but some gains will be bigger than others, thanks to the "January Effect" – a phenomenon distinct from the "Santa Claus rally," but which is happening earlier and earlier every year.
The trading on Friday, Dec. 1, started off with "business as usual."
The grinding bull had been moving sideways, because the markets had Senate tax reform progress "baked in" for the past few "up" days. Still, the prospects were looking good, and most market watchers were anticipating a move higher.
Then I saw the major indexes start to tank.
A quick check of my fastest news feeds gave the answer: ABC News was reporting that former national security adviser Michael Flynn was prepared to say that President Trump "directed him to reach out to Russian officials during the campaign."
The market continued to drop.
Since the "Tech Wreck" in early June, we've seen a "flight to quality" in the U.S. stock markets.
We can tell this by looking at the trading patterns for the four major indexes.
Each of them means something different, and each poses a different opportunity and challenge for individual traders and investors.
You can see them all in this chart I made on Friday...
Last week, I showed you how powerful the market's post-crisis "narrative," or its overarching driving theme, can be.
Since the November 2016 election, the narrative has revolved around the administration's "Big Three" initiatives: reduced taxes, reduced regulation, and increased infrastructure spending. It's a heady brew that's driven some 13% in gains since the election, and any news that supported the idea of the "Big Three" sent the markets higher.
But… I also talked about how that narrative could be changing – in a big way.
