The Best Performers of the Past 10 Years

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This week marks ten years since the bottom of the Great Recession in March 2009. Since then, the S&P 500 has almost quadrupled (total return), Google is up 6x, Apple is up 9x,  AMZN has gone up more than 20x, and Netflix is up 54x (after experiencing an 80% drawdown along the way).

In March 2009, the market was in panic mode. Many stocks were trading like their companies were going out of business. This is why many of the best performers in the past decade were under $5 per share (some were even under $1 a share). Bear markets create incredible long-term opportunities, but most people are not psychologically equipped to take advantage of them. Holding big winners for the long-term is never as easy as it seems in hindsight.

In the past decade, there are 235 stocks that went up more than 1000%.

Out of them, 81 gained more than 2000%.

Out of them, 42 increased more than 3000%.

Out of them, 14 rose more than 5000%.

With returns like these, who needs angel investing?

Here are the top five performers for the past decade:

1.PATK +21,546%

2. JAZZ +15,010%

3. NXST +14,713%

4. MGPI +10,940%

5. MITK +10,720%

Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.

The Five Strongest ETFs In The Current Market

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I ran a screen looking for relatively liquid ETFs with a relative strength above 90. A few themes stand out: palladium, gold, Brazil, marijuana, and software.

This list can tell us how financial markets are seeing the world in the next six to twelve months.

Two of the leaders are precious metals that typically go up when inflation and political turbulence expectations rise. What’s even more interesting is that palladium and gold have risen despite of a relative strong U.S. dollar.

Brazil has a new President, who is supposedly pro-business.

Marijuana is a brand new industry that is just entering the investable universe of many money managers. It could also be just another fad. No one really knows. Things always look easy and clear in hindsight.

And software, which has been leading since early 2018. – the upgrade cycle in the corporate world continues with full force. One sector’s rising expenses are always another sector’s rising revenues. Enterprise software companies have been big beneficiaries in the past year or so.

Keep in mind that MJ, PALL, and PSJ are the only non-leveraged ETFs on the list. Leveraged ETFs are good short-term trading instruments. They are rarely good long-term investment vehicles. In fact, all leveraged ETFs are structured to lose money over time.


Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.

Higher Low?

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The big 5% Wednesday was followed by a strong intra-day pullback but a strong close. In the end, all major market averages finished near the highs of their daily range.

Overall, today was a big win for the bulls. There are more stocks setting up and looking constructively. With all positives in mind, it makes sense to continue to be cautious and to operate with the thesis that this is just a rally within an ongoing bear market, which means stay nimble and don’t hesitate to take partial profits on strength, often. From a technical perspective, SPY has room to run to 260 before it encounters a serious resistance.


Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.

Momentum Monday – Deeply Oversold

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The stock market has been in a free fall as of late. Last week, we saw a major acceleration in the selloff. Ever since the S&P 500 lost 2600, the selling has been relentless. Market breadth has reached deeply oversold levels that are seen very rarely. Sentiment is getting more bearish by the minute. These conditions have historically led to two outcomes:

  1. A 10-15% counter-trend bounce;
  2. Flash crash.

The first is more likely than the second, but the second is not impossible.

In today’s show, we go over the price action in SPY, QQQ, AAPL, HYG, USO, AMZN, FB, among many others.

Happy Holidays!

Check out my latest book: Swing Trading with Options – How to trade big trends for big profits.

Is the Stock Market Ready for a Counter-Trend Bounce?

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The small-cap index, Russell 2000 (IWM) has already erased its entire 2017 gain and it is back to potential technical support in the low 130s.

(click anywhere on the charts to expand them)

The S&P 500, pierced its year-to-date lows and it is trading near potential technical support at 250.

The Nasdaq 100 is now negative for the year and 17% below its 52-week highs. It’s within a striking distance from 150, which is its year-to-date low.

In the meantime, market breadth readings have reached extremely oversold readings:

– only 4% of the S&P 500 stocks are above their 5-day moving average;

– only 1.4% of the S&P 500 stocks are above their 20-day moving average;

– only 11.3% of the S&P 500 stocks are above their 50-day moving average;

– only 20% of the S&P 500 stocks are above their 200-day moving average – a level not seen since January 2016.

The major U.S. stock indexes are at sentiment and technical levels that will either lead to a 4-5% short-term bounce or to a flash crash (quick 5-10% swoosh lower followed by a bounce that erases that entire swoosh).

Correlations are extremely high during market corrections and the first stages of a market bounce. Stock picking is not as important in this such an environment, because stocks recover and crash together. This is why many active traders prefer to use leveraged ETFs like TQQQ to play any type of a bounce (TQQQ is 3x long the Nasdaq 100).

Any potential bounce would be in the context of an ongoing bear market, so make sure you have an exit strategy.

Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.