One Current Market Observation:
Much like in past crises, the market broke to highs far sooner than any apparent recovery in the crisis at hand. Think back to Covid, or the Trump tariff war, or the current Iran conflict. Markets are discounting mechanisms and you need to be prepared to act far earlier than the fundamentals will ever resolve.
One Nugget of Trading Wisdom:
One of the most important tells during a market recovery is not simply which stocks bounce, but which stocks never really broke down in the first place. Many of the semiconductors, now at all-time highs, fall under that category.
The strongest recoveries are often led by stocks showing relative strength while the broader market is still repairing itself. Instead of focusing on some preconceived group of stocks, after large market pullbacks, I’m far more interested in whatever stocks were building multi-month consolidation bases near highs and beginning to break out while uncertainty still exists. That is often the market tipping its hand early.
One Reflective Question:
What semiconductors made the cleanest moves? What were the tells in their charts?
One 1%-Improvement Idea:
Do you have chart filtering software to spot stocks showing relative strength? My trading course offers the filters I use, but you can also use software like Stockfetcher.com.
One Reading Recommendation:
William O’Neil’s work on market leaders and base breakouts remains timeless. While markets evolve, the psychology behind accumulation and relative strength has remained remarkably consistent across decades. His book, How to Make Money in Stocks, is still one of the best frameworks for understanding how true market leaders emerge from constructive consolidation patterns.
Forget outcome. Let’s get better this month.
