I have spent the last two days digging up the year end buy list. And trying to make sense of the selective action in stocks.
I have a what I feel to be a good group of stocks to focus on, for a year end melt-up.
While you might argue that the market is extended, overbought, etc…you must keep in mind that only Dow components and quality stocks have followed that same path. If you revisit the market last year and focus in on the price action from mid-October til year end, you’ll notice an interesting correlation to thie current market environment.
If you take most growth stocks, they didn’t readily participate in the rally til late November. In fact, most went to new lows before finally reversing higher. While most of your sentimental bloggers shorted these stocks into the hole, again, they ripped heads off from those lows, exploding to new highs into year end.
Take YELP as an example. It reflects what most Social Media, China, Solar, and other growth names did at this same time last year.
You may observe this current environment thinking you missed a pat pitch. But what if the fattest pitch is yet to come?
After Hours with Option Addict members, I will be out later this afternoon, but a video watchlist will be uploaded in my absence. The set-ups are great, and should be a decent list to watch for year end.