PowerTrends

February 2024

Get Ready Now for a Great Buying Opportunity

TradeSmith Research Team

The tech-heavy Nasdaq rebounded some today, and is now down about 1.5% from its 52-week high on Monday. Tech has led this massive rally going back to late October, and it led the charge most of January until pulling back. The shallowness of the dip illustrates the strength of the market. In fact, I wouldn’t have minded a bigger dip – which we are likely to see anyway. That dip should be one of our best buying opportunities of the year, because the data points to much more upside beyond that.

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January 2024

Quantitative Ratings on the Biggest and Most Important Companies Reporting Earnings This Week

TradeSmith Research Team

This is a big week for investors. The Federal Reserve announces its latest decision on interest rates – the overwhelming consensus is that rates will be left where they are – and five of the seven largest companies in the world report their quarterly results. The average market capitalization for these companies is $2.1 trillion. Just five years ago, Apple (AAPL) became the first company to hit $1 trillion in value. Now it and Microsoft (MSFT) are both valued over $3 trillion. We’ll hear from both this week, along with Alphabet (GOOGL), Amazon (AMZN), and Meta Platforms (META).

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The World Is Changing, But Getting in Early Is Still the Way to Make Big Money

TradeSmith Research Team

There’s no doubt that artificial intelligence has changed our world, and we barely even understand what it is. Who could forget when ChatGPT was released on Nov. 30, 2022? It made an immediate impact on everything. After its debut, it took no time for A.I. to become a megatrend… one that made investors a lot of money fast. In the short time since ChatGPT, we’ve seen everything from A.I. solving traffic court violations faster than lawyers to doctors getting faster cancer diagnoses than the human mind ever could.

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These Once-Hot Stocks Are Cold as Ice

TradeSmith Research Team

Rivian debuted in late 2021 at an IPO price of $78. It opened trading on Nov. 8 that year 37% higher and peaked that next day at $179.47. You can buy it today under $15 – or more than 90% below its high. Other EV startups tell a similar though slightly less dramatic tale… going public when EVs were the hottest thing around and enduring a couple of years of price declines. But aren’t EVs the next big thing? If so, these low prices could be amazing buying opportunities.

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My Top A.I. Pick Just Soared 36% In One Day – What’s Next?

TradeSmith Research Team

Less than 15 months ago, artificial intelligence was known about and discussed, but more as this mysterious concept from the future. Now, almost every business on the planet is racing to embrace A.I. and all it can do – not to mention riding the buzz. Stocks sure have ridden the wave. Record numbers of companies mentioned A.I. in the earnings calls last year, and we can expect more this year. We should hear a lot of chatter when the big players release results next week.

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Cruise Stocks are Cruising – Smooth Sailing or Rougher Seas Ahead?

TradeSmith Research Team

With a record amount of the 48 contiguous states covered in snow – nearly 60%! – the idea of leaving the cold winter behind for a warm cruise sounds appealing. Truth is, it’s been appealing for a while now. The cruise industry roared back after the devastating COVID shutdowns. Consumers booked a ton of trips last year, and stocks of cruise lines shot higher. Royal Caribbean (RCL) was the clear winner with its 160% surge, ahead of Carnival’s (CCL) 130% rally and Norwegian Cruise Line’s (NCLH) 61% pop.

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Stocks Are Actually Overbought – But That Doesn’t Mean What You Might Think

TradeSmith Research Team

The BMI is what it sounds like – a measure of what Big Money is doing. It calculates all the Big Money signals picked up by my system in the daily data – all the unusual buying and selling of stocks and ETFs – and plots them on a 25-day moving average. It is a fantastic proxy for unusual money flows – the money flows that move stocks. It’s unique, unavailable anywhere else, and stunningly accurate at pinpointing the market’s pivot points. In the huge rally to finish off 2023, the BMI rose all the way into overbought territory (the red dotted line) on Dec. 14. It’s still overbought exactly five weeks later.

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Here Comes the 2024 Election – And Here’s How to Use It to Make Money

TradeSmith Research Team

Longtime Power Trends readers know I’m a data freak. I don’t trust my emotions, gut feelings, or political viewpoints for that matter when investing. But I do trust data – the right data analyzed the right way. It’s the reason my Quantum Edge system identifies winning investments about 70% of the time, and has been shown in independent back testing that it could have beaten the market 7-to-1. My research firm recently went deep into the data showing how stocks perform in presidential election years. Let me share what we found so you can use the analysis to your advantage.

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How to Make Earnings Season Profitable Instead of Painful

TradeSmith Research Team

I don’t expect earnings “watch parties” to be high on most people’s list of fun things to do, but my calendar is full of them as we head into the next reporting season. I’m more of a profits geek than a data nerd – and that’s where the fun comes in. The bottom line is the bottom line. Quarterly earnings give us the most information we ever get about a company’s business. Those fundamentals – along with technicals and Big Money inflows – are the critical factors in my quantitative analysis system that accurately predicts whether a stock will go up or down.

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The Top 3 Stocks in the Top ETF

TradeSmith Research Team

I’m generally not an ETF guy. There are exceptions, of course, but you have to own all of the stocks in an ETF – including the laggards. It’s better to own just the best stocks. I will say that ETFs are great proxies of what’s going on in the market and certain sectors. That’s why I track a bunch of them closely. ETFs help me identify areas of strength in the market and where Big Money is flowing. They can also be great sources of investing ideas. Drilling down into the strongest ETFs, we can pinpoint the top stocks in the funds – and leave the slackers behind.

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