If you're nervous about the stock market right now – or if you're wondering where to put your money to work – I want to share something with you.
It's a strategy that can help you find profits in any market environment.
Is the market going up? Great. Is the market going sideways? No problem.
Is the market in a downtrend, with fear and worries rising? Still not a problem.
This strategy can deliver results in any market environment. And it isn't geared to any specific sector or industry... It points to where opportunity exists
Today, I'll tell you how it works. And I'll use it to show you a corner of the market with major profit potential right now...
You've probably heard the saying that "bull markets climb a wall of worry." Well, the same thing is true of individual stocks.
When a stock has a higher current volatility than its historical average, it's an indication that there is extra "worry" built up in the stock.
When that same stock starts a new uptrend, that extra worry will act like rocket fuel, propelling prices even higher.
Our strategy is as simple as that. We look for stocks that 1) have a higher current volatility than their long-term average, and 2) are beginning an uptrend.
Again, it's not just the increased volatility by itself that is the positive sign. It's the increased volatility AND the existence of a solid uptrend...
Think about the concept of kinetic energy. Kinetic energy is the work required to accelerate an object from a state of rest up to a given velocity. For example, a professional baseball pitcher converts chemical energy from his body into kinetic energy in order to get that baseball up to 95 mph.
I think about this strategy in a similar way. The higher-than-average volatility, or the "extra worry," is like
That's why I've started to refer to this strategy as the "Kinetic VQ" strategy.
We recently ran a screen for this Kinetic VQ strategy – which uses our proprietary "volatility quotient" as a way of measuring worry – to see which stocks fit our two criteria today.
The results came back with a focus on energy stocks.
Energy stocks look great right now on multiple fronts. Global demand for natural gas is rising... And crude oil prices are rising as well, due to geopolitical tensions and supply cutbacks.
But one of the most powerful reasons we're interested in energy stocks right now is due to our Kinetic VQ strategy.
We can see this in action with Oneok (OKE), a company that processes, stores, and transports natural gas in the United States.
As you can see below, this stock has recently broken out to multiyear highs. New multiyear highs can be an intimidating – even risky – buy point for many investors. But they can also be one of the best times to
What gives me even more confidence that OKE could continue higher from here is the fact that its current volatility score is about 35% higher than its average, based on our proprietary tools.
This stock is in an uptrend. And it still has plenty of "worry" left to fuel even higher prices.
As I mentioned, this Kinetic VQ strategy does not favor any particular area of the market. It just goes to where the potential profits are.
It is pointing toward energy stocks right now because that's where the opportunity is today. But if the situation shifts next month and more opportunity arises in, say, utilities or homebuilders or semiconductors, then no problem. Our criteria will point us in that direction.
This strategy is designed to help you find the most attractive areas of the market... regardless of what the overall market is doing. And right now, it says energy stocks are a great place to put new money to work.
Editor's note: Remember, bull markets climb a "wall of worry." Investors looking to profit from the final "
This discussion is free to attend... And it could be critical to your investing results. Be sure to tune in tomorrow night at 8 p.m. Eastern time. You can sign up right here.
"Investors will do almost anything to justify sticking with a losing position," Richard says. Instead, try a different strategy... and focus on your winners. Read more here: The Secret to Buffett's Success.
"A successful trade is made up of two parts – a smart entry and a smart exit," Steve writes. In this essay, he explains how to use one of Richard's favorite methods for making smart exits. Learn more here: This Secret Turned a 'No Gain' Stock Into a Triple-Digit Winner.
Today, we check in on the economy using one of our go-to indicators…
As regular readers know, we like to look at leisure sectors to gauge the strength of the economy. Recreational spending on items like swimming pools and golf equipment can show us when consumers have
We’re talking about Ferrari (RACE), the sports-car company known for its high-performance luxury vehicles. Ferrari is seeing greater demand for its “supercars” as wealth grows in America. (By 2021, the number of millionaires in the U.S. alone is projected to reach 18 million.) The company is also expanding into fast-growth markets, like China. During the first quarter, sales of its coveted Italian sports cars boosted Ferrari’s net profit by 19% year over year – that’s 149 million euros.
Shareholders are profiting, too… The stock is up around 65% over the past year, recently hitting a multiyear high. As long as people have extra money to “show off,” things can’t be too bad for the economy…