Big Day! Why Does It Matter To You?

JC Parets
June 27, 2024

This is a big deal for me.

Those of you who know me well already know.

Tomorrow is the last day of June. So do you know what that means????

NEW MONTHLY CHARTS!!!!

If you're new around here, I will just tell you that there is NOTHING, and I mean absolutely NOTHING, I do that adds more value to my approach than this process of taking a step back and reviewing a list of Monthly Charts.

It's so easy to get lost in the day to day noise of the markets.... What did the Dow do today? What did the Powell say? Who reported earnings this morning? etc etc...

I have found over the years that it is so important to just stop, take a deep breath, and focus on the direction of the primary trends.

The reason is because asset prices trend. They're not random. We know this. It's just a fact.

So if we know for a fact that asset prices trend, don't you think it would be advantageous to identify the direction of those trends?

As it turns out the answer is an overwhelming YES!

Here's a good example of the Nasdaq going back 25 years.

The trend here is not down.

In fact, we can argue that June represents a fresh breakout and a new leg higher for the Nasdaq100.

And when you look at the Dow Jones Industrial Average, we could be on the verge of a fresh breakout (similar to the Nasdaq), which could take the Dow up towards 60,000.

Do you think most investors are prepared to see the Dow Jones Industrial Average rally 50% from here to hit 60,000?

I'll tell you this, a fresh multi-year breakout in the Dow Transports would confirm exactly that, and would suggest that the primary trend for stocks is, in fact, still very much up:

Believe it or not, I think a breakout in the Transports could be the most important development of these 3 charts above.

That would be very constructive action from an underperformer this bull market.

Earlier this year, sentiment got frothy. Breadth narrowed. And it lost leadership.

After a multi-month correction in the stock market, we have started to see more rotation in recent months and a breakout in some of these underperforming areas, like Transports above.

Also, rotation into Consumer Discretionary, as we've discussed a lot in recent weeks, would be some of the most constructive action for stocks that we've seen all year.

Now to be clear, I'm not saying the Dow needs to hit 60,000. And I don't know if June was a fresh breakout for the Nasdaq or not. I guess we'll see.

But what I am saying is that these are the risks on the table.

The bigger risk, in my opinion, is in NOT having enough exposure during what could be about to be a historic bull market rally.

And again, these are longer-term trends going back multiple decades. It tells us very little about what the market will do next week, or even next month.

These are very long trends that help us position ourselves in the same direction, increasing our probabilities of success.

That's what this is about.

And we'll get into much greater detail on Monday @ 6PM ET during our LIVE Monthly Charts Strategy Session. Premium Members make sure to register here, if you haven't already!

JC

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