The Weekend Edition is pulled from the daily Stansberry Digest.

It's Not About Being 'All In' or 'All Out'

By Corey McLaughlin

Sometimes things are so bad, they're good...

I've been talking a bit this year about the "half and half" market. Roughly half of the stocks trading in the U.S. have been trading above their long-term price trend, and the other half have been trading below.

This was still the case this week. About 54% of the few thousand stocks listed on the New York Stock Exchange are trading above their 200-day moving averages, a simple technical measure of a long-term trend. Roughly 46% are trading below.

In simple terms, over the past 10 months of trading, some stocks have been going up while others are still in downtrends. Today, though, I want to talk about another feature of this half-and-half market we haven't specifically mentioned yet...

Sentiment around stocks is pretty sour in general. After all, we've seen a 20% cut in the major U.S. stock indexes, the worst year for bonds since the 1700s, and gold trading largely sideways for a little more than a year.

But as we've seen so many times in market history, when things are bad for stocks and/or the economy, it can mark great long-term buying opportunities that folks rarely experience.

As we'll show today, courtesy of Brett Eversole, right now could be just such an opportunity...

It might not feel like the time to buy, but that's the point...

As Brett shared in the January 12 DailyWealth essay, at least one portion of everyday "mom-and-pop investors" has rarely been so down on the markets. Maybe you're one of them...

Brett cited a sentiment measure compiled by TD Ameritrade, one of the largest brokerages in the U.S. The company analyzes its more than 11 million individual client accounts totaling $1 trillion-plus in assets to create a powerful gauge...

It's called the Investor Movement Index ("IMX"). It includes data like account holdings, position changes, and trading activity. And each month, the index tells us if regular investors are bullish or bearish.

Like most sentiment indexes, though, this is a contrarian tool. When the IMX reading is low – and investors are scared – we want to consider buying. And that's exactly where we are right now. Take a look...

The IMX crashed throughout 2022. And it hit its lowest level of the year in November and December.

This was one of the lowest readings since the index began in 2010. The "crowd" – at least, the crowd of TD Ameritrade's customers – is not enthusiastic about stocks nowadays.

And this is precisely the time when you want to think about getting bullish on stocks... and going against fear.

As Brett showed, similar lows in the IMX have proved to be solid buying opportunities over the long run...

As he wrote:

To see this, I looked at each time the IMX hit a new low at today's level or lower. Here's how stocks performed after those setups...

These are downright impressive numbers. Stocks have jumped 11% in a typical year since this index's data began. But buying after setups like today's crushes that return.

These cases led to gains of 13.7% in three months, 23.5% in six months, and 24.7% over the following year. That's nearly five times better than the typical six-month gain and more than double the typical annual gain.

As Brett said...

"You want to buy when there's blood in the streets..."

The saying is a standby for investors. But it's tough to follow in practice. It means that the best opportunities appear when times are tough... and when no one else is interested in putting money to work.

It's not about being "all in" or "all out"...

I'm not suggesting there will be great buying opportunities for every single stock out there... As we've said lately, the days of the "bull market genius" – when you could pick any stock and likely make money on it – are gone.

As I wrote in the January 3 Digest, the key words for successful investing this year might be patience and prudence. However, a "sea change" into a higher-interest-rate era and a different investing climate can be a great thing for savvy investors...

Recognize the features of today's environment, and your portfolio can benefit. Conversely, ignore what's happening now at your own peril.

You'll never hear me declare in black-and-white terms a time when you must buy and a time to definitely sell. There's always a gray area, and you need to consider your own goals, risk tolerance, and investing time horizon when making portfolio decisions.

But based on the negative sentiment among everyday stock owners today, staying "all out" of this market might not be the wise thing to do if you're interested in seeing some gains in your portfolio this year. Remember, the past is the past.

That being said, you shouldn't ignore the past (and the troubles of the present)...

And it can pay to look ahead, too.

Recently, we shared with you the 2023 outlook of our Ten Stock Trader editor Greg Diamond. Hopefully you caught his video event to understand why this year could be tricky for investors who aren't prepared for the shifts happening in the markets right now.

I'm pleased to report that DailyWealth founder Steve Sjuggerud is getting ready to share a similar message... and his advice for investing in this new year...

For the first time in nearly two years, Steve is breaking his silence...

He is stepping forward in a major way to give his fresh take on the markets. Steve will tell all in a brand-new free video event debuting on Tuesday, January 31, at 8 p.m. Eastern time.

You can sign up for the event here. And just for doing so, you'll get the names and tickers of two stock picks, including one that could be headed for total disaster. It's the kind of warning Steve – with his bullish reputation – doesn't make very often...

But as we've been saying, what we see now is a shifting market. Without giving too much away, I can tell you Steve believes stocks may be on the brink of "resetting" into a historic new phase... And it's one he believes few people will see coming.

To get all the details and additional guidance on this half-and-half market, be sure to check out Steve's upcoming event.

All the best,

Corey McLaughlin

Editor's note: After two years, investing legend Dr. Steve Sjuggerud is breaking his silence to share an urgent market warning for 2023. The shift he sees coming could lead to a period of immense opportunity... with the potential for multiple 1,000%-plus winners. But millions of investors will own the absolute wrong stocks to try to take advantage of it – risking catastrophic losses.

You can't afford to miss Steve's latest message. Make sure you tune in on January 31 at 8 p.m. Eastern time to get all the details... Click here to reserve your spot.

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