Retail doesn't move markets. Institutions do.. and they don't post about it. I'm Hamilton. 17 years trading, three bear markets, still standing. Every morning before the open I show you where the big money's actually moving.. what it's buying, what it's leaving, and what I'm doing about it. 3 minutes, free. The next big move, we're in it instead of reading about it.
Are the Magnificent Seven About to Lead Again?
In Today’s Letter
If the Magnificent Seven are so strong.. Why have they been losing to the rest of the market? That question might sound strange. After all, the Magnificent Seven have been moving higher for years. They’re some of the largest and most profitable companies in the world. And this week, they rallied nearly 4%. But going up isn’t the same thing as leading. Think about two runners in a race. One runner can pick up the pace and still lose ground if the other runner speeds up even more. The first runner is moving forward.. They’re just not moving forward fast enough. Markets work the same way. A stock can go up and still be the wrong place for traders to put their money. That’s why we don’t just ask whether something is rising. We ask whether it’s outperforming the alternatives. Here’s What’s InterestingThe top of the chart shows the Magnificent Seven ETF, MAGS. It’s still in a long-term uptrend. Prices have continued making higher highs, and buyers showed up again this week. That’s absolute strength. But the bottom of the chart tells us where MAGS stands in the race. It compares the Magnificent Seven with the S&P 500. When that line rises, the Magnificent Seven are leading. When it falls, capital is finding better opportunities elsewhere. That line has been falling since November. So even as the Magnificent Seven remained strong on their own, they weren’t the market’s leaders. The S&P 500 was winning the race. But something changed this week. MAGS gained nearly 4%, while the MAGS/SPY ratio jumped roughly 1%. For the first time in a while, the Magnificent Seven didn’t just move higher.. They gained ground against the market. This doesn’t necessarily confirm a new trend.. yet. One strong week isn’t enough to erase months of underperformance. But every change in leadership has to start somewhere. And this may be the first sign that capital is rotating back toward the companies that led the last major advance. One Last ThoughtTraders spend a lot of time looking for stocks that are going up. But that’s only half the job. The other half is finding the stocks going up faster than everything else. Absolute strength tells us where money is being made. Relative strength tells us where it’s being made fastest. The Magnificent Seven have already proven they can rise. Now we’re watching to see if they can lead again. Profits Over Prophets, Hamilton P.S. Do you think the Magnificent Seven are about to reclaim market leadership? Reply YES or NO. And if so.. which one is your favorite? I'll let you know my thoughts! If you enjoy thinking about markets this way, that’s exactly what we do every morning inside The Trading Initiative. |
The Trading Initiative
Retail doesn't move markets. Institutions do.. and they don't post about it. I'm Hamilton. 17 years trading, three bear markets, still standing. Every morning before the open I show you where the big money's actually moving.. what it's buying, what it's leaving, and what I'm doing about it. 3 minutes, free. The next big move, we're in it instead of reading about it.
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