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Former Resistance = Support

January 28, 2023

How's the Bull Market treating you?

Does it feel as good for you as it does for me?

I've been watching really angry people fighting these uptrends in stocks over the past 6+ months and they are not happy.

Life is harder when you ignore price, in favor of such arbitrary things like the economy or corporate earnings.

What kind of serial killer puts that gossip ahead of the tape?

I want this to be a good reminder that we DO NOT EVER want to fight the tape.

Fight the fed all you want. Ignore the economic gossip coming out of the basic cable stations. All of that is perfectly acceptable behavior.

It's the tape that you cannot fight, if your goal is to make money.

One of the things that we caught on to early on in this bull market, was the relative strength we were seeing out of Small-caps.

While the S&P500 and a few other US Large-cap Indexes made new lows early in Q4, although for just a hot second, Small-caps did not.

In fact, Small-caps found support at all that former resistance from 2018 and 2020:

For those of you who have been around here a while, you remember how aggressively we were shorting stocks back in October of 2018 (see here).

When we got back to those same levels in early 2020, we were sellers once again (see here).

Among other reasons, there was resistance at those levels. We were much better sellers than buyers, and this is before we knew anything about COVID.

So I know some of you are new here and you think I might be a permabull or something. But let me remind you that I couldn't be the furthest thing from that.

Honestly, I don't give a shit what the market does. The S&P500 can double from here or it can get cut in half. I couldn't care less.

I just want to be in the right direction of the underlying trend.

The economic implications of what the stock market does is NOT my problem. I just don't care.

Gold can double from here, or go to Zero. Doesn't matter to me.

Bitcoin can go to a million, or zero. Again I don't care.

What I've learned over 20 years of doing this, with 15 of those years being active on Financial Social Media and Television, is that I'm regularly called a permabull during bull markets. But then I'm regularly called a permabear during bear markets.

I'm referred to as a gold bug when gold prices are going up and we're buying it. And I'm a gold hater when gold prices are going down and we're selling or avoiding it altogether.

The truth is, I'm not a perma-anything.

I really just don't care. I care about more important things like my family, my health and the Miami Dolphins.

You're welcome to care. You're welcome to worry about things you have no control over like inflation, or the fed, or whoever the president is.

I don't have the time or desire to bother.

I'm only an investor to make money. If you're an investor for any other reason, I would encourage you to see a therapist because you're probably very confused.

I know what I want. I'm in the market for one reason and one reason alone. And that is to turn a profit. Period.

With relative strength out of Small-caps, we can use this in 2 major ways.

#1 - obviously look for small-cap stocks to own

#2 - as a trend identification tool. If former resistance from 2018 & 2020 turned into support, and prices are above that support, then what bear market are these people talking about?

Maybe they're looking at their charts upside down. Or blindfolded perhaps. I don't know.

But we're seeing uptrends - a lot of them.

What are you seeing?

What am I missing here?

Chime in.

Let me know what you think!

- JC

What You Need To Know Now

We lay out exactly what we’re looking for in this market, and how we want to profit from it in our latest Live Video Conference Call.

Premium Members can download all the slides and watch the video here as many times as you’d like.

In fact, every live Conference Call since 2015 is archived here. Go back and check the tape.

The one thing you’ll find is consistency.

We have a process. We stick to our plan. We remain disciplined.

Here's everything you need to know.

If you have any questions at all or cannot access the Live Conference Call, just email us or give Mary a call: +1 (323) 421-7910

See you in there!