On this week's Stansberry Investor Hour, Dan and Corey welcome J.C. Parets to the show. J.C. is a Chartered Market Technician, founder of TrendLabs, and editor of the Everybody's Wrong newsletter.

J.C. kicks things off by discussing the difference between market technicians and "chartists," the fact that valuations and fundamentals no longer drive stock prices, and the "big bullies" that trickle down to the individual stock level and move markets. He delves into the topic of positioning and finding parts of the market where folks are too bullish or too bearish. For example, J.C. points out that small caps are currently vulnerable for a squeeze. After that, he gives listeners the "cheat code" for analyzing the market, including what to look for, how to cut through the "noise machine" of financial media, how to spot changes in trends, and how to distinguish reality from narrative...

The market is what's real... Everything else is a guess, is an estimate. CEOs are wrong all the time, or they're lying to you. Both happen quite regularly. So the way I look at it, we want to trust the only thing that is actually real. And there's no argument that when shares exchange hands at a specific time on a specific date at a specific price, that will never be revised. That is there forever.

Next, J.C. walks through a hypothetical trade in the small-cap Russell 2000 Index to demonstrate his thought process and how exactly he finds opportunities. He highlights relative strength, waiting for a change in trend, weighing risk versus reward, not taking profits too early, and his unique position-sizing strategy. J.C. also emphasizes the importance of continually asking yourself how you could be wrong once you've formulated a thesis. As he says, if you can't answer the question and don't know how the market could prove your thesis wrong, "It's not an investment. It's a religion [based on belief alone]." This leads J.C. to talk about overcoming human emotion, having a plan before entering a trade, and taking advantage of all the emotional investors who don't have a plan...

Almost everybody in the world... is not going to have a trading plan. They're going to just act irrationally and emotionally. And their crazy lizard brains are going to be driving their decisions. So it's not just about overcoming our own lizard brains. It's about now taking advantage of [amateurs who] are not self-aware.

Finally, J.C. throws out a few areas of the market he likes today and is following closely for opportunities, explains how he decides the right time to enter and add to a trade, and gives listeners solid advice for risk management. "If you're in a trade that's losing, you're going to be distracted, and you're going to miss the giant elephant that's walking right past you," J.C. quips. And he closes the show out with a conversation about investing discipline, including not entering risky trades even if you know they'll go up...

We have a "naughty list." These are the types of stocks that we're not going to sell naked puts against, right? Like I could look at this thing. I'm like, "Dude, we could sell these puts right now. Make a fortune. There is no way this thing is going lower. It's going higher." And I could be dead on. But if it's on our naughty list – because it's too volatile to sell naked puts – I'm not going to sell the naked puts. And I'm going to leave all that money on the table.

Click here or on the image below to watch the video interview with J.C. right now. For the full audio, including Dan and Corey's post-interview thoughts, click "Listen" above.

Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

J.C. Parets is a Chartered Market Technician, the editor of the Everybody's Wrong newsletter, and one of the most widely followed technical analysts in the world. He's also the founder of TrendLabs and All Star Charts. With 20-plus years of experience navigating bull and bear markets alike, J.C. has built a reputation for helping investors stay on the right side of trend and risk.

J.C.'s work has been featured regularly on Bloomberg, CNBC, Fox Business, ABC, and CNN, as well as in the Wall Street Journal and many other financial publications around the world. He has spoken at some of the top investing conferences and been invited to speak at top educational institutions, including Harvard University, Duke University, New York University, the University of Chicago, and Hong Kong Baptist University.