Growth Stocks Are More Attractive Than You Might Think
What has the market narrative been about since January? For six full months, it has all been about falling growth stocks (tech stocks and the Nasdaq). The way the human brain works is based on associations. If the brain is exposed to the same message for six full months (close to 200 days), it is going to create a narrative.
The ‘growth stocks are down’ narrative is ingrained in the minds of 99% of investors. That’s why they miss the turning point. We have been on record saying that the Nasdaq has gone through a turning point, as explained in great detail in our recent Momentum Investing alerts. Commodities are not the place to be, but growth stocks will be the place to be in the next 18 months.
We are certainly not using financial media to come the above mentioned conclusion. It might be true that the media reported on the Nasdaq’s longest win streak since November. While this may be true, we started noticing this three weeks ago. We noticed two things, and we reported this in the research shared in our premium services.
First of all, the chart of the Nasdaq came down to test 11,011 points, a level that was tested a few days before Nov. 9, 2020, when the reversal in the Nasdaq started resolving higher. It was a price point set on Nov. 1, 2020, to be precise. For those that think in terms of time/price harmony, there is a lot of price harmony and many reasons why the Nasdaq found support at exactly that same price level.
Second, in terms of leading indicators, as explained in great detail in How To Forecast The Nasdaq, the Nasdaq volatility index started showing a topping pattern two to three weeks ago. Look what happened last week: a breakdown of epic proportions.
Note that we feature 6 distinct volatility indexes in the research shared in our Trade Alerts service. The Nasdaq volatility index is just one of them. What we have found, over time, is that each of those 6 volatility indexes are dominant. It is a matter of finding the dominant volatility index and understanding its intention.
All of this suggests that a bottom is set up in the Nasdaq. Best case scenario, this is not just a local bottom but a turning point.
More By This Author:
Why Isn’t Gold Shining?Is The Silver Price Breakdown Official Now? These Charts Have The Story
Gold Price Charts You Must See As The Second Half Of 2022 Kicks Off
In our Momentum Investing service, we featured 3 stocks in one of the most promising ...
more
Comments
