Market Mayhem: A Silver Lining Amidst the Chaos
On December 18, the Federal Reserve’s decision to slow down interest rate cuts sent shockwaves through the market, leaving no sector unscathed. The iShares Core S&P Small-Cap ETF (IJR) plummeted by over 4%, while the iShares Core S&P Mid-Cap ETF (IJH) and the SPDR S&P 500 ETF Trust (SPY) fell by 3.84% and 2.95%, respectively.
Forced Selling: A Necessary Evil
In the midst of this turmoil, forced selling became a harsh reality. On that fateful day, a staggering 96.8% of all Big Money signals were sells, with only 11 stocks being bought and 334 being sold. This phenomenon is known as capitulation, and it often precedes significant gains in the market.
A Glimmer of Hope
Since 2012, there have been 58 instances where 330 or more stocks were sold in a single day. However, a year later, stocks of all sizes have consistently risen by more than 20% on average. This presents an intriguing setup for 2025, with average returns at the index level expected to be strong.
Identifying High-Quality Winners
The key to success lies in identifying and buying high-quality winners on sale. Certain sectors, such as financials, discretionary, industrials, and technology, have already produced big winners. The recent capitulation signal is likely to create more opportunities for fast-rising winners in the future.
A MAP to Success
Having a MAP (Market Analysis Platform) can be instrumental in spotting these winners. One such example is Deckers Outdoor Corporation (DECK), a discretionary sector winner over the past year. Big Money has been consistently buying DECK, driven by its impressive sales and earnings growth.
Unlocking the Power of MAP
With a MAP, investors can gain valuable insights into the market, especially after a rare capitulation signal. MAPsignals has been instrumental in identifying DECK as a Top 20 buy, and its research tools can help serious investors, Registered Investment Advisors (RIAs), and money managers make informed decisions.
Disclosure
The author holds no position in DECK at the time of publication.
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