Earnings season is going to begin to pick up this week and people have been buying the FANG stocks going into earnings.
If you watch CNBC tonight I’m sure on Fast Money they will be talking about buying these top gaining stocks of the year as people love to chase whatever is going up the most.
I’m not a believer in doing that.
In fact I think there are reasons to be cautious on the markets right now.
I explained why in an interview I did with Jim Goddard last week.
In it I explained why I think we are in the ninth inning of the bull market and even the economic cycle being helped with buying from stock buybacks despite the warning signs of a flattening yield curve.
You can listen to the interview here.
But how long will that ninth inning go on for?
And even if it is the ninth inning there are still batters coming up to bat and a game to play.
Here is the thing chasing at the end of a game things that have gone up the most without a plan is not a good idea.
That’s why I like setups on stocks that are consolidating and poised to breakout.
But to do that takes making a watchlist and being willing to wait a few days or even a week or two before a signal might trigger.
Last week I highlighted MSB as just such as a stock in a post and video for you.
That stock has not broken through its $26.00 resistance level yet, but is still in a position to do so.
I’m not taking my eyes off of MSB and I even have some stocks I am looking at as potential stocks to bet against as I’m doing pair trades where I go long with some money and make bets against other things with some money too and act the way the first original hedge funds managers did before the age of robots.
With all the attention being given to the big cap tech stocks everywhere that have already gone up a lot this year I just wanted to show you this stock so it won’t get lost in the shuffle.
The thing is there is one pattern that I have found to be the single best buying pattern that I have ever used.
I called it The Two Fold Formula and made a book about it for you.
To grab that book click here.
