Yesterday I talked about the possible resumption of a calm uptrend in the markets…
A rising tide that will help lift all boats.
Today, let’s look at a chart that shows how much healthier the market is right now compared to end-October.
Chart of the Day
This chart shows the difference in the forward price-to-earnings ratio of the various S&P 500 industry groups as of last Friday versus the end of October.
If you recall, there was a LOT of talk during that time (and in the following weeks) about extended valuations and the possibility of a bubble.
Well, as you can see from today’s chart…
The vast majority of industry groups have seen their forward P/E ratios pull back…
While the market itself is just spitting distance away from the end-October high.
This means that multiples have contracted while underlying earnings have improved – a good sign of a healthier market.
And there’s one benefit of this “multiples contraction” we’ve seen over the past few weeks…
A benefit that could be very profitable if you play your cards right.
I elaborate below.
Insight of the Day
As sentiment improves, expect market exuberance to push valuation multiples higher again.
Look, I’m happy to see that the market is in a healthier place right now, with more reasonable valuation multiples.
But with bullish sentiment coming back with a vengeance…
I expect all that exuberance to push valuation multiples into “overstretched” territory again.
It may take some time for that to happen – but it will happen.
And that will set up the next pullback – and the cycle goes on and on once more.
But let’s bring it back to the benefit I was talking about above.
As exuberance reenters the market and valuation multiples start swelling again…
That’s going to send a lot of stocks rocketing upward…
Especially in certain industry groups where multiples have pulled back the most.
That’s where I’m hunting for opportunities right now.
And in just a few hours at 11 a.m. Eastern later this morning…
I’m going LIVE to reveal my top hunting method to track down the most explosive, high-conviction setups in these industries…
A method that has helped us identify moves like 163% in seven weeks… 270% in 10 weeks… and a massive 177% in just 11 days.
As I said yesterday, we’re in one of the most favorable market environments in weeks…
Especially with the Fed likely to cut tomorrow.
Don’t waste it – get it while the going is good.
The live session is 100% free to attend…
But you’ll need to click here to guarantee your spot if you haven’t already.
I’ll see you in just a bit at 11 a.m. ET sharp.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
iOS: https://apps.apple.com/us/app/goto/id1465614785
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