Your Best Chance of Outsmarting Mr. Market

There had to be a better way... The ifs and buts... Your best chance of outsmarting Mr. Market... A place for technical analysis in any investor's toolbox... How to time a bottom... Check out Greg Diamond's latest presentation...

I'm not going to name names...

But when your Digest writer got into the financial-newsletter world several years ago, I found myself reading many stock recommendations... some good, most bad.

And unlike the good ones I'm now fortunate to read every day working at Stansberry Research, these bad ones seemed like nothing more than a "hunch"...

This brand of stock analysis often sounded to me like it was based only off a "gut" feeling or a few headlines. It often began with an interesting story or big-picture concept... but one that felt loosely connected to the recommendation on what to buy that month.

Sure enough, over the course of a year or two, many of the returns of these suspect "long-term" picks were terrible, some even losing double-digits within weeks... without any suggestion in advance of the risks involved.

Here's how one editor responded to me about one such disaster...

It happens.

It's true... Nobody that we know of has a time machine or can predict the future. But there had to be a better way...

That's when 'technical analysis' crossed our desk...

I happened to start collaborating with a brilliant technical analyst who worked with some of Wall Street's biggest firms, and my mind was blown.

I'm talking about the type of data-driven analysis that our resident short-term traders like Ten Stock Trader editor Greg Diamond and DailyWealth Trader editors Ben Morris and Drew McConnell use every single day.

While these traders might include a story for context, the meat of their issues includes detailed, multilayered numbers – in sports, they call them "analytics."

They explain things like price action, risk-reward ratios, support and resistance levels, Fibonacci math (it's cool... I promise), precise price targets, and how long it may take for a particular trade to play out – whether it's months, weeks or days.

As with fundamental analysis, traders can apply these methods to literally any sector or stock at any given time... But you don't need to worry about hunches, headlines, emotions, or parsing CEO comments or Wall Street analyst reports.

It's all quantifiable, which makes it particularly useful in volatile times when markets are swinging from highs to lows and back again.

For example, take a look at a couple of charts Greg shared with his Ten Stock Trader subscribers on May 18.

If you held shares of beaten-down General Electric (GE) this year, you would have been wise to use Greg's "Sell Zone" advice...

And you would have been just as wise to stick with tech giant Microsoft (MSFT) as it helped lead the Nasdaq Composite Index back to new highs over the past few months...

Microsoft, of course, is trading at a new all-time high as we write today.

You'll also find common-sense qualifiers in these updates – the Ifs and Buts...

For example, IF the Federal Reserve drops a few trillion dollars in the economy bucket, things might change quickly and we'll need to adjust our expectations for the trade.

In other words, as we relayed from Greg in the June 4 Digest, with stocks zooming back to new highs, it's critical to trade the market you see today, not the one you want.

Just last night, for example, Greg wrote to his subscribers...

I'm focused on the uptrend in stocks.

As such, I'm looking at potential corrections and where they could end. This sets up more trading opportunities.

Lately, the corrections have been incredibly short.

With the Fed meeting tomorrow and stocks on a torrid run of late, I'm looking for areas of support.

And Greg went on to describe a support level – which indicates more buyers than sellers – in the Dow Jones Industrial Average... It's around 26,300.

This 26,300 in the Dow just happens to be around its 200-day moving average ("DMA"), a good measure of a long-term uptrend.

And when former "resistance" levels – more sellers than buyers – turn into support over time, that's a good signal of an uptrend in whatever index, stock, or asset you're looking at.

In other words, using technical analysis gives investors a reliable way to take into account the unexpected or predictable unpredictability of Mr. Market.

Don't get me wrong... I am well aware the phrase "technical analysis" can rub a lot of people the wrong way. And it can cause a lot of debate in investing circles, even in our own (virtual) office.

Of course, no system is perfect. There will be losses along the way... even a few double-digit hits. But the important point is you know precisely what you're risking ahead of time. As Greg put it in a pair of trade recommendations this week, "We'll risk 100% to make over 100% on this trade."

And over time, the gains and the insight gleaned along the way can outweigh any of the losses. For instance, Greg has delivered at least one triple-digit winner every other month for at least two years, through bull and bear markets.

And as Stansberry Alliance member Steve V. wrote to us back in March...

Greg Diamond... thank you for the incredible insight into the markets. Your knowledge and insight open up a whole new perspective for me on what CAN happen.

While I often shy away from the purely technical reports, this morning's report was right up my alley and the best.

As we've written several times throughout 2020, using technical analysis makes sense for anyone interested in short-term trading. When it comes down to their goals, price – where you buy and where you sell – is all that matters.

But even for a longer-term investor, the 'technicals' have a place in the toolbox...

We love capital-efficient stocks at Stansberry Research. Our editors believe they give you the best chance for reliable returns over the long term. We're not saying you should throw fundamental analysis out the window.

But our collection of services includes a lot of views, perspectives, and experiences. And there's room for more than one approach in an investor's toolkit. Famed American author F. Scott Fitzgerald is credited with saying...

The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

In this case, understanding "what the chart looks like" can help you decide whether now or later would be a good time to buy or sell any number of assets that you already love... or that Wall Street hates.

For instance, think of arriving at Porter's recommendation to buy high-quality, capital-efficient stocks at the March lows, but with another – or, better yet, a supporting – method.

On the same day Porter shared his bold call, we shared one of the simplest technical indicators that someone could look at to time "the bottom" in the U.S. stock indexes. In the March 23 Digest, we wrote...

You can look at several indicators to guide you about when to more strongly consider buying in large quantities again...

Today, for example, fewer than 3% of the stocks trading on the New York Stock Exchange ("NYSE") are above their 200-day moving averages (200-DMAs). The 200-DMA is a good measure of whether stocks are in a long-term uptrend or downtrend...

The last time the numbers were this low was during the financial crisis. More from that Digest...

And back then, the number of stocks trading above their 200-DMAs lingered below 10% for months, from October 2008 until the ultimate bottom in April 2009.

Throughout history, only when this number gets close to or above 15% is the market "safely" rebounding...

Others are more comfortable with 10%. Sure enough, this range would have told you to buy stocks back in mid- to late April. And it would have done so by taking the emotion, or hunches, out of the equation, too.

It's even better when you get one, two, three, or more indicators (all from different methods) all telling you the same thing.

The point is, the 'numbers geeks' aren't being told to go sit in the corner of their Wall Street offices...

It's like in sports, advertising, insurance, social media, or any other industry...

Analytics and data-driven decision-making long ago entered the investment world. And they're influencing it every day. As our Stansberry's Investment Advisory team put it recently in a special report, "Data is the new oil."

I interviewed an All-Star pitcher from baseball's Baltimore Orioles earlier this year who said about numbers-driven analytics, "It's here, and if you're not going to jump on board, you're going to miss it."

He said analytics don't necessarily change you as a player, but they can help tell you who you are as a player – what your strengths or weaknesses are – put measurable numbers to them and let you know if you were hitting your marks or not.

"Because the eye test doesn't always tell the whole story," he said.

It's the same thing in investing...

Number-driven algorithmic trading funds are a big part of every institutional trading house, and can cause rapid circuit-breaker-tripping swings in the market, like we saw during March's panic.

There's always so much fast-moving data in the world that it can feel impossible for an individual investor to keep up. But at the same time, it's important not to ignore the information that can be available to you.

And more important, that we already make available to you.

So what can you do?

You can find someone who knows what they're talking about... like Greg.

He's a Chartered Market Technician – 1 in about 100 traders have this certification – with 15 years of Wall Street experience. When our publisher Brett Aitken hired Greg about three years ago, he was averaging $155,000 in profits per trade for a big-time firm.

Regular Digest readers know we've been sharing Greg's intraday analysis and price targets of the major indexes since February, when COVID-19 first hit the headlines and upended the world.

And since then, Greg's Ten Stock Trader subscribers have not only been getting his usual rapid-fire updates on the major indexes and leading sectors, along with big-picture outlooks (like his excellent work on the "90-year cycle")... but they've been making more targeted trades, too.

In February – before everyone and their mother knew about the company – he recommended a trade on Zoom Video Communications (ZM) that delivered a 45% return in a month...

In March, Greg called the bottom based on one market signal – the same one that he made $4.6 million on in one trade back in his hedge-fund days.

And now, this indicator is pointing to a new opportunity – in a company that has already given his subscribers a chance at 126% and 197% gains.

Click here to learn more right now. You'll not only hear about the opportunity to access Greg's latest trades and his market outlook, but you'll also get the chance to learn why there's a spot for technical analysis in any investor's toolkit.

(And Stansberry Alliance Partners, as always, you can get caught up on all of Greg's work right here.)

Finally, a bit of levity for the year that has been 2020...

You may have seen this meme making its way around the Internet. We found it on the humor website Bored Panda.

This chart isn't exactly a professional technical chart, but it feels accurate – especially the data points for "mask"...

The trend shown here about alcohol isn't far off, either...

According to Nielsen e-commerce data, online alcohol sales increased more than 400% year over year in the month of April, while in-store sales grew by about 20% over 2019.

Cheers!

How to Invest in a Sports Comeback

As pro sports leagues across the U.S. and around the world prepare to restart their seasons following the coronavirus pandemic, Stansberry NewsWire editor C. Scott Garliss shares how investors can cash in.

Click here to watch this video right now. And for more free video content, subscribe to our Stansberry Research YouTube channel and follow us on Facebook, Instagram, and Twitter.

New 52-week highs (as of 6/9/20): Amazon (AMZN), GrowGeneration (GRWG), KraneShares MSCI All China Health Care Fund (KURE), Microsoft (MSFT), The Trade Desk (TTD), and Vanguard Short-Term Inflation-Protected Securities Index Fund (VTIP).

In today's mailbag, a pair of subscribers respond to two others... another story about World War II heroism... and more feedback on the $100 Challenge.. What's on your mind? As always, tell us at feedback@stansberryresearch.com.

"Regarding Dave S's comments in [Monday's] Digest, I think your dad might have been referring to Heinz Grebner.

"I worked with Heinz from the mid 70's to the mid 80's at G. D. Searle (pharmaceutical company no longer in existence. Was sold and split up in the mid 80's. That's another long story). But Heinz did recount his days as a prisoner during WWII.

"He was a really neat fellow. All respect to the warriors of WWII." – Paid-up subscriber Dave P.

"[On Monday] Martin P. wrote: 'I often wonder how today's generation would fare if placed in a similar situation. I'd like to think they would step up to the plate... but somehow I have my doubts.'

"I am an aging Cold Warrior (Naval Aviator) from the pre-all volunteer days. One of the greatest lessons I learned as a young officer is how young people, even deadbeats, are able to change – to stand up in the face of need. I still see that quality all around us.

"The dirtballs seem to get all the press, but potential heroes abound. Just look at the Gulf War and the continued commitments in the M.E. If you didn't see young people step up to the plate there, you just weren't looking. In WWII, it was only a small portion of the population that fought. Never fear, they will still be there when the need arises." – Paid-up subscriber Robert H.

"Scott, I enjoyed your recount of your grandfather's story. My great uncle, 2nd Lt. Bruce Kreischer, was the copilot of 'Cherokee Maid' in the 333rd Bomb Squad of the 94th Bomb Group at Bury St. Edmunds. His plane was shot down over Wilhelmshaven on 7/26/43 and crashed into the North Sea.

"He was the only survivor and became a POW at Stalag Luft III for the remainder of the war. Like your grandfather, he never talked about his time in the service. I have been piecing together his story for a number of years.

"There is a fellow on Facebook, Roger Watts, who is recreating all records for the 94th Bomb Group. Check out the 94th Bomb Group Forum on FB." – Paid-up subscriber Tim S.

I don't have to do [the $100 Challenge] – I got married. We throw away many $100 bills per day." – Paid-up subscriber Daniel T.

"A few years ago I started giving money away when I couldn't afford it. I still do. To others who need it. The premise is it's my commitment to saying I will have what I need and more.

"Money is an energy exchange, if you hoard it you lose it and so much more. Let it flow and it keeps revolving and increasing. I really believe if you prove like Mark did that you have this commitment all will work out.

"I have upped the ante... Given more and more away each year... I'm not a millionaire, don't even have half of that but know what? My money IS growing.

"I give to people who I see are honest, hard-working, have integrity and pure values... We need a world of them more than ever now.

"During lockdown I decided to make the most of my time – the stock market. I now truly believe I WILL be a millionaire within 12 months.

"I believe this kind of off world concept is influencing the planet right now... I believe the more I 'give' the more I will receive.

"I'm not in the USA I'm in the UK so can't subscribe to a lot of the Stansberry info. But you speak sense.

"I'm not a religious truth seeker... I'm a pragmatist who wants quite simply, a better world. If you want a UK story – I'm here." – Paid-up subscriber Gill B.

Corey McLaughlin comment: Hear, hear, Gill. Love your attitude. It's inspiring.

All the best,

Corey McLaughlin
Baltimore, Maryland
June 10, 2020