A Market Health Check as We Enter 2022

Instead of worrying about what could happen, let's take a look at the overall health of the market to see what's likely in 2022. Today, I'll share two indicators that show us the bull market is in a prime position to continue... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] A Market Health Check as We Enter 2022 By Brett Eversole --------------------------------------------------------------- Last year proved to be boring and exhilarating by turns for investors... 2021 started with the mayhem of the GameStop craze. The Reddit-fueled short-squeeze sent the stock up more than 1,000%. And "meme stocks" have staged big swings up and down since. Cryptocurrencies have had a heck of a year as well. Bitcoin was up 60% in 2021. And it doubled twice and crashed 50% along the way. Meanwhile, the S&P 500 Index finished the year up 29%. And we saw practically zero volatility as stocks methodically marched higher. The choppy action in December was about the worst we saw in 2021. The tech-heavy Nasdaq, spooked by news of the Omicron variant, fell 5% in a little more than a week. But it was back near all-time highs by year-end. It has been an easy market to "buy and hold." And the returns have been fantastic. You might even be spooked about that. It's not supposed to be this easy, after all. But don't let that fool you into thinking stocks are bound to suffer in the new year. Instead of worrying about what could happen, let's take a look at the overall health of the market to see what's likely in 2022. Today, I'll share two indicators that show us the bull market is in a prime position to continue... --------------------------------------------------------------- Recommended Links: [A Serious Warning for All Subscribers]( The man who predicted the 2020 crash down to the VERY WEEK is now sharing the EXACT DATE he believes stocks will soon plummet. To see which three stocks he believes could see the biggest moves, [claim a free copy of his new report here](. --------------------------------------------------------------- [Tomorrow: Go BEYOND Bitcoin in 2022]( Last year he correctly predicted that money-printing would drive bitcoin to new highs. And now, cryptocurrency expert Eric Wade is back... revealing what's NEXT for cryptos... including a major catalyst scheduled for tomorrow that could send shockwaves through Wall Street and the American economy. [Full story here](. --------------------------------------------------------------- To check the health of the market, we want to check under the hood and make sure things are in good shape. One of my favorite ways to do that is with the advance/decline line... We've started calling this our "Melt Down Indicator" in our True Wealth newsletter. It's only one way to look at market health, of course – but it's an important one. That's because it has flashed massive warning signs before previous stock market Melt Downs. This indicator gives us a look at "market breadth." That's a way of gauging when lots of stocks are doing well, not just a few. In the case of the advance/decline line, it's a cumulative daily measure of stocks moving up, minus those going down. If 500 stocks are up on the day and 200 are down, the advance/decline line will be positive by 300. So, when this measure is rising, it means more stocks are winning than losing. And that's exactly what we want to see. Despite a recent dip, the advance/decline line remains near all-time highs today... The red flag will be if the S&P 500 is rising, but the advance/decline line is falling. That's what happened during the dot-com boom. And that divergence spelled eventual doom for the market. It showed that only a few stocks were carrying the market higher. Today, though, this measure of market breadth says stocks can continue higher. Another way to see this is the S&P 500 Equal Weight Index... You see, in the normal S&P 500, larger companies have larger weights... In fact, the top four companies make up more than 20% of the index today. That means those few companies are crucial for the index's success. But what if they're rising and everything else is falling? The index could keep rising... but it'd be a darn unhealthy market. The Equal Weight Index lets us look under the hood and see if that's happening. It holds all 500 companies in equal weight. And when it rises alongside the normal index, it means most stocks are doing well. That's still the case today. Take a look... This index had a banner year, just like the overall market. It was up 30% last year. And it moved back near an all-time high – just like the normal S&P 500 – by year-end. That tells us, again, that the bull market is healthy today. Make no mistake – the kind of rally we saw in 2021 is unusual. But don't let that scare you into thinking bad times must be around the corner. The market mania we saw at the beginning of the year has mostly faded. And our breadth indicators tell us that stocks are in good shape. That means we can expect more gains from here as we head into 2022. Good investing, Brett Eversole Further Reading You might think a big drop is right around the corner. But bull markets don't crash just because they've been going on for a long time. And one sector could outperform as the rally continues... For more, read Chris Igou's two-part essay [here]( and [here](. "Stocks were overly loved," Steve writes. "But now, that incredible optimism is completely gone." And investors changing their minds this quickly means the Melt Up could run longer than anyone expects... [Learn more here](. INSIDE TODAY'S DailyWealth Premium Meet the company turning the world into a local marketplace... The bull market is humming along. So it's important to stay long on stocks today. And Matt has found one company on the cusp of massive growth as digital trends continue... [Click here to get immediate access](. Market Notes HIGHS AND LOWS NEW HIGHS OF NOTE LAST WEEK PNC Financial Services (PNC)... financial services M&T Bank (MTB)... regional bank Aflac (AFL)... insurance CVS Health (CVS)... [drugstores and vaccines]( Procter & Gamble (PG)... [consumer goods]( Kimberly-Clark (KMB)... consumer goods McCormick (MKC)... spices Coca-Cola (KO)... [soft drinks]( Tyson Foods (TSN)... beef, chicken, and pork McDonald's (MCD)... [burgers and fries]( Flowers Foods (FLO)... [bread maker]( Hershey (HSY)... ["Global Elite" chocolatier]( Union Pacific (UNP)... [railroads]( Viper Energy Partners (VNOM)... oil and gas ExxonMobil (XOM)... oil and gas NEW LOWS OF NOTE LAST WEEK NovaGold Resources (NG)... gold First Majestic Silver (AG)... silver Kratos Defense & Security (KTOS)... "offense" contractor BlackLine (BL)... cloud-based accounting software CRISPR Therapeutics (CRSP)... gene editing --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers’ feedback. To help us improve your experience, we’d like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. Or e-mail info@stansberrycustomerservice.com. 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