Q2 STOCKS TO BUY

This Signal Went Off for Just the Third Time Ever

The NAAIM exposure index has only topped 100 two other times to date

Jul 29, 2016 at 10:37 AM
facebook X logo linkedin


It's been a record-setting month for U.S. stocks, with all three major indexes notching all-time or annual highs. While stocks have taken a breather this week, amid an onslaught of quarterly earnings reports and uninspiring economic data, the S&P 500 Index (SPX) is only sitting about 10 points below its July 20 record peak of 2,175.63 -- and a rare signal that just went off in the National Association of Active Investment Managers (NAAIM) exposure index suggests more highs could be on the horizon.

The NAAIM sentiment reading jumped to 101.2 on July 27 -- its loftiest perch since late 2013 -- and the third highest reading on record. The peak reading of 104.3 occurred on January 30, 2013, when the SPX reclaimed its footing atop 1,500 for the first time since the financial crisis. The second-highest reading of 101.5 occurred on November 27, 2013, when the SPX topped 1,800 and the Dow Jones Industrial Average (DJIA) made its first foray north of 16,000. As a point of comparison, the average NAAIM reading since its inception is 58.7.

So what does this rare signal mean for the broader equities market going forward? According to Schaeffer's Quantitative Analyst Chris Prybal, while the immediate returns are fairly lackluster, the SPX has historically outperformed when looking at intermediate and longer-term time frames.

Granted the sample size is very small, the S&P 500 has averaged a one-month gain of 1.5% following this signal -- and was positive both times -- compared to an anytime 21-day return since 2013 of 0.9%. Looking out one year, the SPX again was positive both times following the signal, averaging a gain of 16.9%. The anytime return for this time period is a much slimmer 9%, with the S&P 500 positive just 76% of the time.

SPX Returns When NAAIM Topples 100

Let us help you profit from market volatility. Target big gains in short order with a 30-day trial of Schaeffer's Weekly Volatility Trader!
 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter