In this post, I’ll focus on setups that I’m monitoring for both long and short positions. With a chart and short write-up, this is a quick way to scan and plan potential trades.
These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup.
You can sign up for a 7-day free trial here to unlock the trade ideas in this report.
Stock Market Update
The transfer of power to a new presidential administration was greeted with a bullish response from investors. But the ingredients for stock market rally have been coming together for weeks now. As the S&P 500 pulled back from the early December high to the mid-January low, investor sentiment became increasingly bearish. By one measure, bears outnumbered bulls by the most in over a year. At the same time, breadth indictors pointed to fewer stocks trading in downtrends even as the S&P made a lower low. After filling the post-election day gap and reversing higher, the price action under the hood has been historically positive by one measure. The number of consecutive sessions in which 68% or more of the S&P’s holdings are advancing hit the highest ever at six days (chart below).
While headline volatility is almost certain to increase looking ahead, it’s worth noting that the S&P 500 is closely following the historic path when a new interest rate cutting cycle avoids recession. The chart below plots the historical tendencies of the S&P 500 under different economic regimes once the Federal Reserve starts reducing rates. The blue line shows the S&P’s current path, which is tracking the normalization scenario. I continue to believe the weight of the evidence points to economic expansion, which should favor the earnings outlook and help keep the bull market intact for now.

The improving performance in the average stock is a welcome return from a challenging end to last year. Chart setups and early signs of breakouts are also taking shape in sectors and industries leveraged to some of President Trump’s early actions aimed at boosting the energy sector and artificial intelligence applications.
Keep reading below to see:
Open ETF positions.
Open stock positions.
Chart analysis for new trade ideas.
Keep reading with a 7-day free trial
Subscribe to The Market Mosaic to keep reading this post and get 7 days of free access to the full post archives.