The Next Market Rally Could Be Hiding in Plain Sight

If the market continues to rise, the bears will be squeezed. The smallest price bump could send stocks higher. And based on a recent signal, that process may already be underway... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] The Next Market Rally Could Be Hiding in Plain Sight By Sean Michael Cummings, analyst, True Wealth --------------------------------------------------------------- The bears are setting the stage for a shocker of a rally... Folks everywhere are convinced that stocks are about to plunge. Hedge funds have fled to safe-haven assets. According to the hedge-fund exposure indicator from our friends at SentimenTrader, they currently hold fewer stocks than at any time since the index began in 2003. Commodity trading advisers have gotten bearish, too. Goldman Sachs reported last month that these traders had built a $47 billion short position – their largest-ever bet against stocks. Even the options market is bracing for impact. Put options cost 35% more than call options today. That means options traders are paying a big premium to place bets that the market will fall. But if the market rises instead, these bears will be squeezed... and many will have to buy in just to avoid more losses. The smallest price bump could be enough to chase stocks higher. And that process may already be underway. Let me explain... --------------------------------------------------------------- Recommended Links: [GOLD WARNING FOR TOMORROW, NOVEMBER 14]( If you own gold or gold stocks, watch our livestream tomorrow. The man who predicted the 2020 and 2022 crashes predicts an event in 2024 could have a major impact on gold. The last time he called for a move like this, you could have quadrupled your money in 16 days. [Click here by TOMORROW, November 14, to access our livestream and learn more](. --------------------------------------------------------------- ['I Found the Answer to Retirement']( A subscriber from New York came forward with his unique story of how he retired early and worry-free WITHOUT stocks... thanks to ONE single idea that anyone can use. Now he sees 16%-plus annual returns with legal protections... and he NEVER has to worry about another market crash again. [Get the full story right here](. --------------------------------------------------------------- The S&P 500 collapsed more than 10% from July to October. It was a grueling period. Almost nothing seemed to work. But since then, stocks have found their footing... The S&P 500 racked up an eight-day win streak through November 8. We haven't seen a daily streak this long since November 2021. And importantly, the rally likely isn't over yet... I wanted to know what this move might mean for the future. So I found every S&P 500 eight-day win streak going back to 1990. Then, for each instance, I tested how stocks performed going forward. It's pretty rare for the market to rise for eight days in a row. We've only seen those win streaks 13 times over the past 33 years. But a string of eight consecutive up days tends to signal more gains ahead. Take a look... Stocks have returned about 8% a year since 1990. But buying on eight-day win streaks returned 9% annually. While one extra percentage point of return may not be much to write home about, these streaks have been reliable indicators of a good year to come for stocks... They kicked off an up year about 85% of the time. What's more, the returns in those winning years tended to be significant... The average performance was 14%, with a maximum return of 24%. However, the less-common drawdowns after these signals were significant as well. Stocks fell an average of 14% in those down years, with a max drawdown of 19%. It's also worth noting that there were only two negative signals. The first took place in April 2019 – a year before the pandemic dip. And the second was near the peak of the 2021 bull market. But today's market sentiment couldn't be more different from the 2021 buying frenzy... No one wants to touch stocks today. And that leaves a lot of potential buyers out there to chase prices higher. This gives us a great contrarian setup in stocks today... We have a serious sentiment washout. And we have a good risk-to-reward setup after the recent win streak. The next market rally could go higher and longer than anyone is expecting... so make sure your portfolio is positioned to benefit. Good investing, Sean Michael Cummings Further Reading A late-stage bull market looks very different from one that is just beginning. Sentiment is fragile early on – like we're seeing now. And while it may not feel comfortable to buy when investors are fearful, that fear is more support for a contrarian opportunity in stocks... [Read more here](. "History shows this 10% dip isn't the end of the world," Sean writes. The recent correction spooked investors. But over time, we can see that drawdowns like these are extremely common – even during the absolute best years for stock returns... [Learn more here](. Market Notes HIGHS AND LOWS NEW HIGHS OF NOTE LAST WEEK CBOE Global Markets (CBOE)... trading-exchange operator Fair Isaac (FICO)... credit-score data analytics Morningstar (MORN)... financial services Progressive (PGR)... insurance Microsoft (MSFT)... tech giant Dell Technologies (DELL)... laptops and PCs Adobe (ADBE)... cloud services Akamai Technologies (AKAM)... cloud services CrowdStrike (CRWD)... cloud security Broadcom (AVGO)... semiconductors Micron Technology (MU)... semiconductors Uber Technologies (UBER)... ride hailing Walmart (WMT)... "World Dominator" of discount retail Cintas (CTAS)... uniform supplier Abercrombie & Fitch (ANF)... apparel O'Reilly Automotive (ORLY)... auto parts Trane Technologies (TT)... HVAC manufacturer Hilton Worldwide (HLT)... hotels Motorola Solutions (MSI)... telecom NEW LOWS OF NOTE LAST WEEK Pfizer (PFE)... pharmaceuticals Moderna (MRNA)... pharmaceuticals Biogen (BIIB)... biotechnology Best Buy (BBY)... electronics retailer J.M. Smucker (SJM)... packaged foods Hasbro (HAS)... toys and games General Motors (GM)... automaker Chevron (CVX)... oil and gas First Solar (FSLR)... solar energy Albemarle (ALB)... chemicals --------------------------------------------------------------- [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. 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