Over the next few days here at TradeInvestNow Research, we’re sharing insights from our friend Greg Diamond, editor at Ten Stock Trader at Stansberry Research…
Greg has 16 years of trading and portfolio management experience, including managing multimillion-dollar portfolios across various asset classes. He also holds the prestigious Chartered Market Technician (“CMT”) designation.
In today’s essay, Greg explains how 2023 could provide investors with plenty of buying opportunities – including within one particular sector…
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Greg Diamond: A New Year Means New Opportunities
It’s a new year… and that means a fresh start for everyone – especially investors…
Although subscribers of my Ten Stock Trader service had a successful 2022, we must now forget about it.
Remember, success is not final, and failure is not fatal.
This means 2022 is now meaningless. We have to focus on 2023 and our new 12-month trading window. That’s what matters right now.
And 2023 will present incredible trading opportunities, based on the various cycles I’ve been following. These opportunities are obviously taking shape in the stock market. But we’ll also see opportunities in both bonds and precious metals.
Today, I want to start with the precious metals sector…
In the October 24, 2022 Weekly Market Outlook for Ten Stock Trader readers, I stated that, as long as the October 13 low held in certain stocks, we would likely see major price divergence into early 2023. That, in turn, would set up a big inflection point. (In that scenario, some stocks would make new lows, while others would not. More on that below.)
Well, here we are.
In that October issue, I also explained that certain technology stocks would likely make new lows. Construction-equipment giant Caterpillar (CAT) and bank-related stocks, like JPMorgan Chase (JPM), could hold those October 13 lows rather than make new lows.
Over the past few weeks, I’ve found that precious metals have started to diverge as well.
The chart below shows the relationship between gold and the Nasdaq 100 Index…
I labeled gold in black and the Nasdaq 100 in blue.
You can see the price divergence between gold and the Nasdaq 100 in early 2022. Russia’s invasion of Ukraine took markets by surprise in that period, causing investors to pile into gold as a hedge against volatility.
But ultimately, and as this chart implies, high inflation rates and a stronger U.S. dollar pushed stock and precious metals trades into a tight correlation for the rest of the year.
That is, until recently…
Note the two red arrows above, which mark recent divergence… The Nasdaq 100 is trending lower while gold is showing signs of strength.
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Click here for his major 2023 warning.
OK, so what does this mean?
From my perspective as a technical analyst, it means we’re seeing price divergence across asset classes (not just sectors within the stock market) that once traded in a tight correlation.
The price divergence between gold and the Nasdaq 100, combined with the divergence between other major market sectors, strengthens my conviction that 2023 is setting up for major tradable inflection points.
Now, it’s important to highlight that price divergence takes time to develop. And the key to acting on these setups is understanding the “when” – as in when to trade.
Trust me when I say that I’ll provide an abundance of information explaining the “when.”
I’m certain we’ll see more volatility in January. But right now, patience is key.
In summary, I’ve highlighted the precious metals sector for two reasons…
One, it bolsters evidence of price divergence and a tradable inflection point across both stocks and precious metals.
And two, when precious metals start trending in that manner, it signals incredible trading opportunities. As longtime Ten Stock Trader subscribers know, our two best trades have come from this sector.
I’m looking for similar trading victories in 2023.
Greg Diamond Get Out of Cash Event
Editor’s note: Greg doesn’t just see a fresh start for investors and traders in 2023…
He also predicts that we’re on the verge of a massive turning point in the market that could leave millions of people behind – including you, if you aren’t prepared.
So this Thursday, January 12, he’s hosting a free event to share the whole story. And as a bonus for reserving your spot today, you’ll also get the ticker symbol of his No. 1 investment for 2023.