Hey, Ross here:
Yesterday, I told you not to get scared out of the market.
And sure enough, the indexes rebounded strongly – punishing those who decided to sell off Friday.
Still, we’re likely in store for a volatile week…
With Fed Chair Powell’s press conference tomorrow likely to bring about another dip in the markets.
This will likely have an even bigger effect on market sentiment.
But as today’s chart shows – this is an opportunity.
Chart of the Day
This chart shows the average difference between AAII (American Association of Individual Investors) bulls and bears compared to how far the S&P 500 is from all-time highs.
So, on the far right for instance, if the S&P 500 is at an all-time high – then the AAII bulls generally outnumber the bears by 15.1% on average.
And if the S&P 500 is less than 1% to an all-time high – then the AAII bulls generally outnumber the bears by 12.3% on average.
You get the idea.
Right now, the S&P 500 is less than 2% to an all-time high.
Based on that, the average difference between AAII bulls and bears should be 9.8%.
But as of the latest survey, the AAII bulls only outnumber the bears by 3.1%.
In short, sentiment is lagging far behind price action – much more than average.
I explain how to exploit this below.
Insight of the Day
Strong price action + jittery sentiment = a market operating below its potential
Let’s break it down.
The price action has been strong – with the major indexes close to reclaiming all-time highs.
Obviously, there are buyers in the market, and a lot of them too.
But there’s also a lot of jittery sentiment that is out of sync with the strong price action.
That tells me that this is a market that’s still operating below its potential.
In other words, the market could likely be significantly higher still…
And when sentiment “catches up”, that’s what I believe will most likely happen.
But like with most things, if you wait until then, the best opportunities will already have slipped by.
Right now, the buzz around AI has quieted lately, with the headlines dominated by tariffs, trade, and war.
But the foundations of AI only keep getting stronger.
That divergence presents a big opportunity.
I’m seeing some hot microcap opportunities in the AI space…
Customer Story of the Day
“I have always been interested in the stock market. I’ve never felt a need to dive in until now.
I listened to many calls prior to purchasing my first product with TA.
I have, albeit, a small amount of money to invest, but I’ve have already learned so so so much from Ross.
His teaching style is excellent, and he is very good at making things clear and understandable.
Don’t hesitate to get in the game, you won’t regret it!! I am so glad I did!”
Ross Givens
Editor, Stock Surge Daily
