How I Beat The ‘Big Picture’ Trap

On Friday, I explained that many investors fall into the “big picture” trap

The short of it is that these folks use the S&P 500 Index as their barometer for stocks. And when the broad market is headed up, they simply look for the “hot stock of the day.”

Without even realizing it, investors taking this approach have fallen into the big-picture trap.

Now, don’t get me wrong… I love ranking stocks. That’s part of the reason why I created the Power Gauge system many years ago. It helps folks know which stocks are best positioned for outsized gains in the weeks and months ahead.

And the thing is… this approach is more powerful when we start with industries.

In short, I applied the algorithm for evaluating individual stocks in our Power Gauge system to industries.

The Power Gauge tracks all the specialized groups I mentioned on Friday. It’s now possible to see whether entire groups of stocks are “bullish,” “neutral,” or “bearish” at any time.

In other words, instead of just predicting the performance of a single stock over the next 90 days… we can predict the performance of entire industries over the next 90 days.

We can figure out if it’s about to experience a crash… or if it’s poised for a big run higher.

I like to think of this functionality as an “Industry Monitor.” It’s constantly scanning every corner of the stock market – looking for signs of weakness or opportunity.

This Industry Monitor is how we’ve predicted the path of the “rolling crash” so far.

Let me show you the Industry Monitor in action…

On March 26, 2021, the entire innovative technology industry went “bearish” in the Industry Monitor.

Back then, the mainstream media still revered Cathie Wood and her ARK Innovation Fund (ARKK) as a “breakout star” in the investing world. And some publications were calling her “the market’s new oracle.”

But if you would’ve known about the innovative tech industry’s “bearish” rating in the Industry Monitor, then you would’ve known what was about to happen to some of her favorite stocks.

Sure enough, after getting stuck in neutral for months following the Industry Monitor’s warning, the entire industry quickly fell around 45% throughout the winter. Take a look…

This example alone proves the Industry Monitor’s value. But it gets better…

We can use the Industry Monitor to drill down into the best and worst stocks in each industry.

We know that individual stocks tend to do much better or worse than the industry as a whole. And within the Industry Monitor, we actually rank which stocks are poised to outperform their industry and which stocks are poised to underperform it.

In other words, we know the “best of the best” stocks in any given industry. And we know the “worst of the worst” stocks in any industry.

Let’s say you’re one of the many investors who bought Zoom Video Communications (ZM) after the COVID-19 crash in March 2020.

In the early days of the pandemic, you couldn’t go a day without hearing about this company. That made sense… The company was leading the world’s pivot to remote work.

Investors saw that. And the company’s stock skyrocketed nearly 1,000% in 2020…

But then, let’s say you checked the Power Gauge in early 2021. You would’ve seen that the system issued a “bearish” rating for Zoom. And you decided to get out of your position.

Importantly, you would’ve done that just before the stock crashed as much as 80%…

Huge relief!

Again, when it comes to the perfect time to sell any stock, the Power Gauge works. But it’s even more powerful when you add the Industry Monitor into the mix…

Zoom belongs to the innovative tech industry. And remember, the Industry Monitor would’ve issued a “bearish” warning for the entire industry in March 2021.

That’s a one-two punch of warning signs against Zoom.

Within the Industry Monitor, you can instantly see the worst individual stocks in an industry. That way, you’ll immediately know they’re the ones you need to sell as soon as possible.

Imagine knowing weeks – and often months – in advance which industries will soon come crashing down. It’s a perfect tool for any investor looking to gain an edge in the markets.

Now, I’m bringing this approach to individual investors…

Currently, this functionality is only available as a part of our highest level of software at Chaikin Analytics.

Only 3% of our users have access. A lot of those folks are financial advisers who use our software to help their clients.

But because of the current market conditions, I’ve decided to make this approach more accessible to individual investors. The reason is simple…

Regular Chaikin PowerFeed readers know that we’re in the midst of what I call a rolling crash. It’s a serious market event. And it’s going to bring unprecedented challenges to investors.

Simply put, now is not the time to keep this strategy under lock and key. Folks need to be able to easily identify the best-performing industries – and the worst-performing ones, too.

I recently held an event that explains in detail how this process works. And everyone who attended heard the names and ticker symbols of a pair of stocks I’ve found using my Industry Monitor…

The first one is a stock that folks should avoid at all costs right now. On the flip side, the second one could return triple-digit gains this year.

In short, the Industry Monitor helped me uncover these two opportunities. And it’s the ideal tool for me to help individual investors like you beat the “big picture” trap.

Good investing,

Marc Chaikin

Editor’s note: Only 3% of Chaikin Analytics users currently have access to the Industry Monitor functionality in the highest level of our software. But because of the current market conditions, Marc wants to make this approach more accessible to individual investors…

According to Marc, now is not the time to keep this strategy under lock and key. Folks like you need to know how to easily identify the best- and worst-performing industries. So he recently explained how to do that during a special online event. Watch the replay right here.

Scroll to Top