These are the only 2 words you need to know to make money in this market
I’m going to show you how to make money in this nutty market, which you’re about to see. It’s so simple in fact, I’m almost embarrassed to have to say it. It all comes down to just two words…
On the surface, there’s not much to cheer about in the markets this holiday season. Stocks are taking everyone to the cleaners, pikers and celebrity billionaire hedge fund managers alike. Everyone from Bill Ackman to David Einhorn has a flagship fund that’s losing double-digits in 2015. And barring a Christmas miracle, these players will be getting nothing but a nice lump of coal in their stockings this year.
Most stocks on the market (65%, to be exact) are below their 200-day moving averages. About half the stocks that make up the S&P 500 are also below their 200-day moving averages. Everyone from Joe E*Trade to Carl Icahn is dealing with a dingy market…
The Daily Reckoning
Despite all the negatives I just heaped onto your breakfast plate, there’s an important piece of information that’s helping traders just like you maintain their profits (and sanity) this year. So pay attention…
Despite market weakness, the market’s strongest stocks continue to buck the chop and outperform the averages.
It’s that simple. Even during yesterday’s back-and-forth session, more than 40 big-name stocks posted new 52-week highs. The fact is, opportunities for traders are lurking just under the surface of the this market. You just have to know where to look.
But you won’t hear about most of these stocks from the financial press. They’re too busy counting up Chipotle’s food poisoning victims to bother with profitable trades.
This is where those two little words come into play: buy strength. Stick to the best and ignore the rest…
Right now, the big trading meme is F.A.N.G. – which stands for Facebook, Amazon, Netflix, Google. The idea is that these big, popular stocks are part of the most powerful force on the market today.
And while I’m not suggesting you reduce your investing universe down to a catchy slogan, there is a lot of truth to this F.A.N.G. business. Amazon and Netflix are both up triple-digits in 2015. Google us up 45%. And Facebook is sporting gains of 36%. More importantly, these stocks have completely ignored almost every market dip so far this year. They’re trading in their own world.
In this market, only the strong survive.
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