For the past two weeks, we've noticed some dramatic changes in the market’s health, which I wrote about in our member reports.
The broadest measures of the stock market – especially in markets outside the U.S. – have been sending us clear bullish signals…
…and for the past two weeks, we’ve used those signals to make easy profits here at Strategic Trading.
Let’s look at exactly how market conditions have changed… and what that means for all of us going forward.
The Market Conditions Index Algorithm (MCI) is the key secret to our success at the Strategic Trading Community.
The MCI measures changes in the market’s Liquidity (health) and Money Flows (the direction in which big institutional orders are going).
I created the MCI Algorithm to tell me what’s really going on in the market... And over the years, it has become the most powerful trading tool I’ve ever seen, anywhere.
On October 9th, the MCI delivered a clear signal that a turnaround was underway... because liquidity was surging back into the market.
This signal happened while the S&P and Nasdaq were still near their lows for the month.
Whenever liquidity returns to the market, it’s time to start buying the dip and preparing for a breakout.
Using these liquidity signals, our community was able to make huge profits shorting the VIX, buying the S&P Futures, and swinging several key ETF’s up to their major resistance levels.
Since that moment, the market has remained stable… even while it approaches new all-time highs.
For the answer to that question, we take a look at the big picture.
Even though SPY has moved sideways over the past week, the Equal-Weight S&P Index (RSP) continued moving higher… without even bothering to rest.
Whenever the Equal-Weight Index moves higher while SPY grinds sideways, that is a clear bullish breadth divergence.
The Equal-Weight index gives every stock from the S&P 500 Index the same weight, regardless of its size.
For example: Within the Equal-Weight Index, small stocks such as MOS are just as important as the giant stocks (such as AAPL).
So what does that mean? It means investors have been pouring money into almost every stock, leaving few names behind… in a nutshell, RSP told us that the rally has wide participation.
In other words, investors didn’t need to sell their weaker stocks to buy into larger stocks. Instead, money was available to flow into all stocks equally.
In these conditions, there’s plenty of cash for everyone.
That is bullish, because it tells us that money is available to push prices higher, and few stocks are being left behind… In these conditions, it would take a big shock to break the market’s support.
This data told me to hold our S&P Futures long position. As a result, we enjoyed almost all of the upside from the recent move, amounting to enormous profits with almost no drawdown.
This data-driven, Algorithm-powered approach gives smart traders an overwhelming edge… and allows us to stay above the market’s day-to-day noise.
When the NYSE Composite broke above its key resistance earlier this week, we got another signal that higher prices were coming.
As of Friday, NYA closed the week above the downtrend line that has pressured this index since early July.
The NYSE Composite is the broadest index in the U.S. Stock Market… it contains every actively traded stock listed on the New York Stock Exchange.
When the NYSE Composite chart breaks through key levels, that means we’re seeing a move that will be felt across the entire spectrum of the stock world – and that the move probably has staying power (it’s unlikely to be fake).
The NYSE Composite will face its next test near 13235. Let’s see how it behaves there.
For the past two weeks, we have been watching the DAX (Germany’s Stock Market Index) closely.
Last week, the DAX closed above key resistance for the first time in nearly two years.
That was a big event, and the breakout told us that global stock markets were strengthening.
This week, we saw a strong continuation of last week’s breakout… the DAX is continuing its measured move without any real pullback.
European stock markets have been strengthening for the past three weeks, and last week we saw clear confirmation.
The money flows from European Investors could create tailwinds for the U.S. Stock Market, as investors put their enormous cash positions to work, after shunning risk assets for much of the year. They will have some catching up to do.
We’ve been talking about the FEZ chart for the past two weeks at Strategic Trading.
FEZ is the Euro Stoxx 50 ETF, and it has broken out strongly for the first time in years.
The European Stock Market has been a Strong Buy for the past two weeks, when the breakouts first began to form.
FEZ is already one-third of its way to the first upside target at 40.50.
And that’s just the beginning… I expect much higher prices for FEZ in the coming months, if the breakout holds.
In fact, European stocks could go nowhere, and FEZ would still rise, due to the Euro’s relative strength.
European stocks are priced in Euros… while U.S. Investors trade FEZ using U.S. Dollars.
Therefore, any strength in the Euro against the U.S. Dollar could easily push FEZ up even further… and means this ETF could have two forces pushing it up in the coming months.
A currency tailwind is a great advantage to have whenever we’re trading the overseas market ETF’s… because the profits can pile up quickly in those instances.
Mexico seems poised to end its bear market, and begin a long-term uptrend.
We’ve already seen EWW (The Mexico ETF) make a double bottom with bullish RSI Divergence over the past year.
EWW has also broken above its 50 week and 18 week moving averages… and those key moving averages are beginning to slope up together for the first time since 2017.
Finally, EWW has broken out of its Weekly Chart RSI Downtrend for the first time since 2016.
If EWW can close above 46.20 on November 8th, that could signify an end to the Bear Market, and the start of a new Bull Market for Mexico’s Stock Market.
The upside to a breakout here could be powerful… with a measured move target up to 57.67.
Let’s see if Mexico’s stock market is ready to join the global breakout party.
If it does, patient investors will be in a position to make some impressive profits.
For the first time in years, we’re seeing a breakout in the MSCI All-World Index (ACWI).
This is the broadest stock market index in the world, and includes 2,700 stocks from 47 different countries.
We've been tracking the progress in ACWI for the past two weeks, and the expected breakout finally triggered this past week.
The measured move for this breakout could take ACWI up to 81 in the coming months… assuming the breakout holds.
The MCI Algorithm gave us an early signal that markets across the world were about to become bullish…
back when the S&P was still languishing near its October lows.
Liquidity and Money Flows are the key drivers of stock market prices.
Once we understand that, we gain an overwhelming advantage over other traders.
Strategic Trading members are enjoying direct access to the MCI Algorithm’s charts… with fresh signals every evening.
Armed with these charts, our members can see hidden changes in the market… before most other traders even realize what’s happening.
Empower yourself, and start seeing the market more clearly than ever before.