Well, that was quick!
Last week, the S&P 500 (SPX), Dow 30 (DJIA), and Nasdaq 100 (NDX) Indexes all triggered fresh entry signals: The three major U.S. stock indexes are now in the Market Health Green Zone – with new Bullseye signals for all three:
This marks the fastest move between bear market and bull market signals (at 25 trading days) since the COVID-19 pandemic triggered a rapid market crash in 2020, followed by a subsequently quick recovery. We covered the initial Bearseye signals in an earlier Inside TradeSmith alert sent early last month.
Let’s take a moment to review these new signals in a special Inside TradeSmith market update.
Major Indexes Back in the Green Zone – But Watch Out for Individual Stocks!
After roughly a full calendar month of breakneck volatility, these three widely followed stock indexes are back in a healthy state – far faster than analysts would have expected.
Now, it’s worth noting that while these indexes are back in the Health Indicator Green Zone, the majority of their component stocks are not.
The S&P 500, for example, still has only 32.6% of its component stocks in the Green Zone, while 2.59% are sitting in the Yellow Zone. The majority of S&P 500 tickers (64.81%) remain in the Health Indicator Red Zone and are still stopped out by TradeSmith’s count.
This applies to the components of both the Nasdaq 100 and Dow 30 as well, with 58.42% and 60% of each index’s component stocks in the Red Zone, respectively.
And this spells an opportunity for members who closely follow our TradeSmith
Alerts Report, as I do.
For example, those following the Alerts Report would have caught that both HCA Healthcare (HCA) and Intuitive Surgical (ISRG) triggered new entry signals last week, as both stocks moved into the Health Indicator Green Zone on Wednesday, May 14. That same day, Hertz Global (HTZ) was upgraded from Yellow to Green Zone status – as you can see below:
Our Alerts Report highlights individual stocks with changes in Health status, making it a great source for new trade ideas. Stocks with new entry signals can potentially be used to put some of your idle cash to work – especially during recoveries from flash-crashes like last month’s. And stocks moving from the Yellow Zone back into the Green Zone often prove to be good buy-the-dip possibilities.
To be notified of these changes in Health status, you can set up alerts on your own TradeSmith account by clicking on your user tab at the top right corner of your TradeSmith Finance Dashboard. From the dropdown menu, navigate to Settings…
Then select Alerts from the menu that appears at the left of the Settings page:
You can set alerts for any assets in your saved Investment Portfolios, Watch Only Portfolios, Newsletter recommendations, Billionaires Club, My Baskets, or TradeSmith Basket holdings.
Under System Alerts, simply choose the Alert Types you want emailed to you by ticking boxes in the menu below – you can customize your alerts by a variety of statuses, including Entry Signal, Early Entry Signal, Health Indicator Green Zone, and so on.
You could also set the frequency you get alerts under Alerts Consolidation, by selecting either Grouped reports or Individual notifications.
With TradeSmith Alerts set, you’ll never miss another important market or individual stock signal. As market conditions change swiftly, it’s a powerful tool to have on your side.
Good investing,
Mike Burnick
Senior Analyst, TradeSmith
P.S. Speaking of stock signals, did you know our CEO Keith Kaplan offers updates and market insights on social media? Last Friday, Keith went to Twitter/X to provide an update on Amazon (AMZN) – which, while still sitting in the Health Indicator Red Zone, is about to enter an especially strong bullish period based on our Trade Cycles Seasonality indicators.
In times like these, instant insights like this can make a huge difference: If you haven’t already, consider following Keith’s account for more in-the-moment updates.