TG Watkins, Director of Stocks over at Simpler Trading and Editor of the Profit Pilot website, joins us to outline a continued constructive outlook for markets and the big moves higher in a number of stocks that already have corrected and based over the last 2 years. TG points out that even if the general indexes and popular mega-cap stocks are starting to look overbought, that there may be more opportunities under the surface of the broad market, as overall breadth is improving. Over the last few months, investors have been steadily rotating funds into the stocks that were already beat down and seeing these equities spring back to life. TG outlines a number of stocks and sectors that have been producing out-sized gains for those paying attention to the technical set ups on the charts, and he feels this momentum will bring in even more money off the sidelines to start participating.
We also discuss the psychological aspect of trading and the opportunity cost in being on the sidelines in defensive fixed income or under-allocated to the markets, due to highly publicized anticipation of a coming recession that has continued to be pushed farther and farther out. For most of this year a number of investors have been waiting on a large corrective move that hasn’t materialize, or worse, even mistimed shorting the broad markets, and this is just leading to even more upside pressure as the shorts get squeezed, and more traders flip from a short to a long trading strategy. We also take a look at the crypto miners as an example of what signals he looks for in an overbought equity to harvest gains, and wait for the next entry point.
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