The Worst Thing You Could Do Today

Don’t break from the plan… [TradeSmith Daily]( The Worst Thing You Could Do Today By Lucas Downey, Contributing Editor, TradeSmith Daily The merciless surprise attacks on Israel over the weekend shocked the entire globe, serving as a stark reminder of how ugly this world can be sometimes… All we can do is hope for a peaceful resolution as quickly as possible. Of course, our expertise is in the markets, and that’s where we’ll focus today. Stocks have gained quite a lot of ground since the weekend, to investors’ surprise. So today we’ll try to answer why stocks are seemingly shrugging off the latest war-time news. And as usual, we’ll look to history and data for clues… RECOMMENDED LINK [Special Briefing: FIND Winners and AVOID Losers in A.I.’s “Second Wave”]( A “second wave” of A.I. investments is about to pop – with 100X the potential of any gains so far. And if you take the right steps today, you could turn every $100 into $1,000... every $10,000 into $100,000... and beyond. [Details HERE...]( Nowhere to Go But Up First, let’s size up the current environment. As you know, earlier this week I made a data-driven case that [stocks are extremely oversold](. My favorite money-flow indicator, the Big Money Index, reached a powerful buy level last seen in October 2022… near the bear market low. It’s important to understand just how oversold most stocks are right now. This chart shows it best. It details the percentage of S&P 500 stocks above their 50-day moving average. Barchart The lower the number (right scale) the deeper the oversold levels. At the lows, less than 10% of S&P 500 stocks were above their 50-day moving average — or their average price over the last 50 days. Now, it’s bounced back above 24%. Incredibly, we’d have to go back to a year ago, October 2022, to see anything similar. To say stocks have been on sale is an understatement. This is the first reason why stocks have held steadier than most participants imagined. They had almost nowhere to go but up. So now we understand the overall positioning of investors coming into the weekend’s horrendous attacks. Stocks were so oversold, even geopolitical conflict wasn’t enough to send them lower. Now, let’s review history through a geopolitical lens to see what happens in the wake of such events. RECOMMENDED LINK [This new A.I. just predicted Tesla’s upcoming earnings...]( Two of the world’s top traders instructed their A.I. “brain” to predict Tesla’s next earnings numbers. They didn’t inject any human bias into the machine. They just told it what they were looking for. And it produced a result that no one expected. Find out how they did it by clicking the link below... [Go here for the full story]( A Walk Through History Poring through the TradeSmith data archive, I went back and compiled some of the biggest geopolitical events since 1979 to measure how stocks tend to react afterward. Turns out, stocks take geopolitical events better than you’d expect. Below lists 22 major events I pulled from TradeSmith’s archive since 1979, including: - 1987 Stock Market Crash - Iraq’s invasion of Kuwait - World Trade Center car bombing - Asian Financial Crisis - The 2008 financial crisis - And 9/11 Painful as these events are, stocks tend to handle them with solid results. The S&P 500 gains .5% three months later. Six months later, we see a 4.4% gain. A year later, the market averages an 8.7% gain: Historical market resilience is yet another reason why stocks have shrugged off the latest sad state of affairs. At TradeSmith, our aim is to make you informed and ultimately a better investor. While it can seem like a good idea to go risk-off in the wake of major world events, the data says that’s one of the worst things you could do. This just proves you should keep going with your investing gameplan. Deeply oversold conditions will likely bring a powerful lift to stocks in the coming weeks and months. And with earnings season kicking off with the big banks tomorrow, there’s plenty of reason to expect greed in stock prices in Q4. To your health and wealth, Lucas Downey, Contributing Editor, TradeSmith Daily P.S. Speaking of earnings season, have you heard about [Andy and Landon Swan’s earnings season strategy]( It’s totally unlike anything I’ve seen before… See, when it comes to trading company earnings reports, these guys do a lot more than look at balance sheets and financial statements. They’ve created [an AI algorithm that can crawl through the web and deliver key customer insights]( that affect every company’s bottom line. You won’t find these stats in any company balance sheet… But if you ask the Swan brothers, they make all the difference when it comes to a winning trade. [Learn exactly how this AI breakthrough works right here.]( Get Instant Access Click to read these free reports and automatically sign up for research throughout the week. 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