We have just sold most of our exposure to the US stock market on our website.
The S&P 500 index has just made a new all-time high, going on a spectacular melt-up.
We’ve been holding trades on multiple technology and industrial stocks over the last few months, but we have just sent alerts to all of our clients for most of these trades.
We think there’s going to be a big opportunity to take advantage of over the coming month, and we’re doing this in preparation to take advantage of it.
We’ve just made the biggest shift in our portfolio allocation since March of this year.
Back then, we also decided to sell the vast majority of our US stock market exposure as trade war risk was rising.
But the situation today is quite different to the one we were in that time.
From a trade war perspective, tensions were rising back then, while today they’ve generally been cooling down.
Back in March, the S&P 500 had just broken down below key moving averages, suggesting the uptrend was coming to an end.
The moving averages were curling down, meaning momentum was shifting from up to down.
Today, we have practically the polar opposite situation.
The S&P 500 recently crossed above the same key moving averages.
These have been curling back upwards, even printing a golden cross – when the 50-day moving average crosses above the 200-day moving average.
This technical signal usually means momentum is coming back and price can continue higher.
The last golden cross was in early 2023, right at the beginning of the major rally until end of 2024.
The one before that was in 2020, right at the beginning of this major bull market.
And before that, in 2019, just ahead of another major move higher.
Going back to the 1950s, we’ve had 37 golden crosses trigger on the S&P 500, and 30 of them led the market higher in the 6 to 12 months that followed.
This aligns with what we’ve been saying about the economy staying resilient.
Real GDP growth is still sitting nicely between 2 to 3% – the healthy range where you see sustained bull markets.
🚨 Happy 4th of July – Massive Sale!
Just like every year, we’re doing a massive 30% sale on our service to celebrate 4th of July.
Our mission is to help every client catch the most profitable opportunities in markets.
Recently, we booked a 16.41% profit on $SPOT.
We think the next 6 months heading into the end of 2025 could be one of the best trading windows in years.
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Why We’re Exiting Despite Bullish Signals
So if so many things look constructive for US stocks, how come we just exited most of our major long trades?
Well, over the last 60 trading sessions, the S&P 500 has returned a massive 25%.
We’ve only seen these kind of returns a handful of times.
Since 1970, we’ve seen this happen just 8 times.
When we look at the 2020 episode, for example, the S&P 500 triggered the signal on June 5th.
Right after, an 8% correction followed.
The 2009 signal shows the same pattern.
The S&P 500 yielded a 25% return within 60 trading sessions and then the market pulled back by around 8% in the months that followed.
In 100% of the cases where the S&P 500 showed such strong returns in such a short period, it ended up pulling back in the month or two that followed.
Even if it was shallow or short-term, there was some kind of turbulence.
Presidential Election Seasonality Support
The S&P 500 has been tracking almost perfectly the 4-year presidential election stock market seasonality.
This shows how the stock market has behaved on average over the last 100 years in each year of the presidential election cycle.
We typically see the S&P 500 rally going into the election and in the months after, which is exactly what we’ve done.
We then see weakness in the first quarter of the post-election year, which is exactly what we’ve seen.
Then we see tremendous strength in the second quarter, which is also exactly what we’ve seen.
Typically the third quarter is where you see a local peak and some kind of pullback occur.
Given that this aligns with our view that the stock market is overextended today, we found it relevant to discuss.
Just to be clear, this is purely a short-term bet we’re making as part of our trading strategy.
We should not be trying to time the market like this with a long-term investment portfolio.
One of the first lessons we teach our mentorship clients is to keep trading and investing completely separate.
Our Current Strategy
We have cut down most of our exposure to US stocks.
Most of our portfolio is now made up of trades that are uncorrelated to the US stock market that we think can hold up well or even rise if the market pulls back.
Bitcoin, believe it or not, is one of these.
If we are right about the market pulling back, we’ll quickly be looking to load up back on trades that we think will be outperformers in the next phase of the rally.
We have a watch list of stocks we’re looking to buy that fit our criteria from both a price action and fundamental standpoint.
That includes the semiconductor sector we’ve been talking about for some time, but also the industrials and financial sector that we think will perform well.
We are raising cash today to give us the dry powder we need to take advantage of these opportunities when the market pulls back.
🚨 Ready to Profit From These Markets?
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So we’re doing a 30% discount to help you lock in our service at a ridiculously cheap price.
We’ve successfully navigated these markets in the past year:
- 129 total trades completed
- 85 winning positions
- 44 losing trades, with controlled risk
We recently booked a 13.45% profit on $IBM and 14.32% on $KLAC.
View our 2024 track record for free on our website here.
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