Six New ‘Bullish’ Sectors Signal a Market Shift

The S&P 500 Index packed an entire year of performance into a single month…

It’s up roughly 12% since July 18.

Despite that, the broad market index is still down around 11% from its all-time high in early January. That means we remain firmly in “market correction” territory.

You’ve likely also noticed the unending talk about recession in the mainstream media. Folks still can’t decide whether we’re officially in one or not.

Yes, we still face headwinds from the Federal Reserve. Another interest-rate hike seems to be already in the works.

And yes, we still face supply constraints and energy shortages. Those problems will drag our fight with inflation out longer than anyone wants.

But none of that changes this simple fact… A dramatic change is underway in the market.

On July 28, I released a recommendation to the subscribers of my top-tier service Power Gauge Investor. At the time, no broad market sectors earned “bullish” or “very bullish” ratings from the Power Gauge.

However, the tide has shifted over the past three weeks. And today, I want to make sure you know about it…

Now, I wish I could give you access to the full report I’m working on this month. It’s scheduled to land in inboxes next Thursday, August 25. But that wouldn’t be fair to the folks who’ve paid thousands of dollars for instant access to Power Gauge Investor.

However, what I’m seeing in the market is too important not to share. So here’s the part that you need to know as the rest of this month unfolds…

Six of the 11 broad market sectors recently entered “bullish” or “very bullish” territory. Remember, just three weeks ago… none of the 11 sectors were “bullish” or better.

Drilling down, nine of 22 key subsectors are ranked as “bullish” or better today.

Now, this doesn’t mean the market is now risk-free. But folks, this is a significant shift. Here’s what I told Power Gauge Investor subscribers three weeks ago…

Put simply, the market is starting to “figure out” the challenge it’s facing. When that happens, the challenge remains… but it enables us to make tactical decisions.

In other words, Wall Street is transitioning from a “run for the hills” mindset to trying to figure out how to get the most out of this situation. That’s an encouraging step.

That’s playing out in real time right now. And here’s another important point…

All six market sectors with new “bullish” or better ratings experienced positive Chaikin Money Flow readings over the past three weeks.

Regular readers know I developed the Chaikin Money Flow in the early 1980s as a way to measure the accumulation (buying pressure) versus the distribution (selling pressure) of a stock over time. More specifically, it tracks “smart money” (or institutional) buying.

In other words, Wall Street is once again putting money to work in broad market sectors.

That signals a major shift.

Will we see further volatility? Absolutely.

But there is opportunity in the market right now. Don’t ignore it.

Good investing,

Marc Chaikin

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