One of life’s little pleasures is being treated like an insider.
We’ve all watched those movie scenes where there’s a long line outside the popular club and a huge bouncer stands beside a velvet rope. The velvet rope is fancy – but it really doesn’t hold anyone back. It’s just the symbol that separates those who are on the outside from the insiders.
This same thing happens in real life too, though there’s usually no velvet rope…
It’s when you go to the bank and the new teller is struggling to help. But the branch manager steps up to the window and says, “Mr. Barton, so good to see you today and thanks for your patience. Step into my office and let me take care of this for you personally.”
Or – and this is my favorite – I go to my favorite sausage store where the owner is a master sausage and salami maker. He motions me over and reaches under the counter to cut off a piece of his newest cured creation and asks me for my opinion. My one-word reply: “Stunning.”
He tells me that he’ll be in full production next week but he can spare a link a two for his “best customers.”
And while I can’t offer up personalized service at your bank or tasty sausage samples, one of my jobs here at The 10-Minute Millionaire is to keep you on inside when it comes to market information.
That’s why I keep you up-to-date on my insight about the market narrative.
And today, I want to make you a market “insider” by taking you behind my mental “velvet rope” to show you my thinking about trade setups…
A Trip Behind The Velvet Rope
To be frank, until we have a couple of closes below both of these levels, there is nothing bearish to talk about.
And even a pullback to the lowest level on the chart above would only be a 7.5% drop.
While nothing to sneeze at, it would really be pretty normal for the market to have that kind of pullback.
Dare I say, it would even be healthy for a market that hasn’t had a 5% pullback in over a year to take a breather.
What Would Alert Me to Be More Cautious?
There are some measures of market health that could tell us to be on guard for a pullback.
If global markets start to show some broad-based weakness, that could potentially affect the U.S. markets.
But here’s what going on globally right now:
From the top chart on down, we see Europe, China, and Latin American markets all moving from the lower left-hand corner to the upper right-hand corner of the chart – thus embodying the definition of uptrends.
This means that, until further notice, we’ll stick to the buy side, finding stocks in a pullback to short or intermediate-term extremes. This gives us preferred reward-to-risk ratios on stocks that are ready to push higher.
The bottom line is, understanding the current market like this is critical to our journey here at The 10-Minute Millionaire. That’s because it is going to be a driver for all of our future trades – including the one I will be sharing with you later this week.
So make sure to stay tuned.
D. R. Barton, Jr.