The stock market is off to its worst January start of all time, as it fell over 6% last week. That severe action left the majority of investors in a panic – not Wall Street Informer members, though.
As you know, we’ve been bearish on this market for some time now, so last week’s heavy selloff was far from surprising. I even made money while everything was falling, as did subscribers to our recommendation services!
And now we have an opportunity that rarely comes along, so please allow me to share how you’re going to find the diamonds in the rough…
We like to think of the stock market as the ocean, with different aspects of the water’s movement being correlated to different market actions.
The one I want to focus on now is the tide of the market.
In normal market action, where stocks are climbing then dipping over and over to make small channels, we’re experiencing a normal tide going in and out in a relatively small amount.
But when we have huge action, like last week’s 6%+ drop-off, the tide goes way down.
And that actually provides us with a fantastic opportunity.
You see, a market dip that significant causes the vast majority of individual stocks to dip alongside it. Almost everything is hit at least a little bit at least.
So think of the individual stocks as shells right now…
During the drop, the tide is going down, which is revealing more and more shells on the beach.
The one’s closest to the shore are revealed immediately, and those are the weakest stocks that fall with the market. On the flip side, the shells that are deeper into the ocean are the stronger, more resilient stocks.
These deeper shells are like diamonds in the rough, only revealed when the market falls a large amount, pulling the tide down.
Those are the stocks that will have some of the most success when the market bounces upward.
But how do we find them?
The biggest indicator that a stock is one of these diamonds in the rough is that it was able to climb or hold steady during last week’s action. That’s a good way to determine the strength of a stock in general, but when we have such a heavy force trying to pull everything down as a free-falling market, the best of the best are truly revealed.
And that’s how to make easy money when the market bounces…
