A seven-day win streak... Three catalysts for the bull market to continue... But short-term steam doesn't last forever... Make sure you have an investing plan... Let your high-quality winners run and sell 'Wile E. Coyote'...
 A seven-day win streak...
The benchmark S&P 500 Index and tech-heavy Nasdaq Composite Index closed higher today for the seventh consecutive trading session. The S&P 500 was up 1% today. The Nasdaq was 1.2% higher. And several semiconductor stocks like Taiwan Semiconductor Manufacturing (TSM) and Nvidia (NVDA) were among the day's biggest individual gainers, up around 3% each. The Dow Jones Industrial Average and small-cap Russell 2000 Index were also higher, by about 1% each, which hasn't always been the case during the S&P 500 and Nasdaq's current streaks. Meantime, bond yields were little changed today. As we wrote about on Monday, momentum favors the bulls right now. We're in "a very strong bull market," Ten Stock Trader editor Greg Diamond said in his free Diamond's Edge video. If you're a technical trader like Greg, it's not necessary to attach a narrative to today's price action, but I (Corey McLaughlin) will share a big-picture view. After all, I'm the "Switzerland" editor of the Digest, as our colleague Dave Lashmet once put it... impartial to all our editors' investing strategies. There are three catalysts for this bullish stretch... The first catalyst is the prospect of an easier monetary policy environment ahead. As we wrote yesterday, the Federal Reserve's view on inflation, unemployment, and the economy appears to favor the central bank lowering its suggested benchmark lending rate later this year. It's "Melt Up" fuel. Fed Chair Jerome Powell's second day of testimony on Capitol Hill did nothing to dampen this idea. And tomorrow brings a fresh set of inflation data that could stoke the fire. Meanwhile, the idea of President Joe Biden's name not appearing on the presidential election ballot in November doesn't appear to be hurting market performance. This current streak for the S&P 500 and Nasdaq began the day after the June 27 presidential "debate." As we wrote in the days after the debate, the idea of an extension of former President Donald Trump's tax cuts, circa 2017, is back on investors' minds... and may be another catalyst for higher stock prices. Less taxes can help businesses' profit margins and boost economic activity. History is also on the market's side in early July. As our friend Marc Chaikin, founder of our corporate affiliate Chaikin Analytics, told Dan Ferris and me recently on the Stansberry Investor Hour, the first two weeks of July is the best two-week period for stock market performance going back to 1928, on average. Money tends to flow into the market at the start of the year's second half for one reason or another, as Wall Street and institutional money managers deploy capital to start the third quarter or the beginning of the fiscal 2025 year. That said, short-term steam doesn't last forever... We'd be surprised if the major U.S. stock indexes went up every day into infinity... through November... or the rest of the month without any down days. That's not how this game works... even in an environment with strong bullish momentum. I can't tell you the precise day the streak will snap, but I'd bet on it happening – and possibly soon. As DailyWealth Trader editor Chris Igou wrote to his subscribers yesterday, while the market has been up lately, he's seeing signs of potential weakness ahead, based on a technical analysis of U.S. stocks. Chris is seeing a similar setup from this time last summer, right before stocks started selling off (before ultimately snapping back higher in the final months of the year). As he wrote... The S&P 500 Index was up 16% in the first half of 2023... The market was climbing out of a bear market. And things were looking good. Then, starting at the end of July, stocks fell 10% in three months. It was the first correction of the year. And all 11 major U.S. sectors were in the red during that time. This year is playing out in similar fashion so far. The S&P 500 rose 15% in the first half of 2024. The bull run is on track. Yet, something that showed up at the end of the 2023 summer rally is happening again today... Chris is talking about a notable "divergence" between the headline performance of the S&P 500 (which is disproportionally influenced by its biggest mega-cap stocks) and how most of the individual stocks in the index are performing. In DailyWealth Trader, Chris often shares interesting market indicators he uses to identify potential turning points in the markets. Yesterday, he shared one that illustrates the underlying health, or "breadth" (the number of stocks going up versus down) of the S&P 500. Using this indicator, Chris found that more individual stocks in the S&P 500 have actually been going down versus up lately, while the index itself keeps rising to new all-time highs. This is typically a warning sign in an index or sector for potential weakness ahead. It has preceded drawdowns in the S&P 500 over the past several years. This indicator is called the McClellans Advances-Declines U.S. Summation Index. As Chris wrote... This is a rolling tally that shows if more stocks in the S&P 500 are advancing or declining each day. It uses a set moving average of the advancing stocks minus the moving average of the declining stocks. Then it adds that number to the previous day's close. Put simply, if more stocks rise than fall, the number at the end of the day is positive, and the index goes up. If more stocks are falling, the number is negative, and it goes down. Again, the summation index usually falls in line with the S&P 500. When the U.S. benchmark index is breaking out, this index tends to follow. This isn't the case today, though. As Chris continued... The summation index is down as the S&P 500 hits new highs. We've only seen this a couple of other times over the past few years... 
The most recent case was in the summer of 2023. The chart above shows the summation index dropping quickly while stocks climbed higher into June. As you can see in the chart, the benchmark index didn't keep climbing for too much longer after the June 2023 peak... This was when the S&P 500 was moving higher while more individual stocks started to decline more consistently each day. As Chris wrote... That's because there was no support to drive it higher. The pressure of fewer stocks going up eventually tipped the scale. Another recent case was in the summer of 2021... The S&P was doing incredibly well that year, too. It rose 14% in the first six months. By summer, more stocks were falling than rising. While it wasn't a major drop in breadth, you could clearly see the divergence. Now, the S&P 500 didn't fall right away. It rose another 5.6% through early September before falling 5% in a month. That drop wasn't big enough to mark a true correction. But it was a month straight of falling prices. If history is a good indication – and we think it is – don't be surprised to see a pullback in stocks in the months ahead. The Stansberry's Investment Advisory team's Complacency Indicator, which has an excellent track record of predicting 10% drawdowns within the following 12 months, was also triggered earlier this year. Again, I can't tell you precisely when a pullback will happen or what the trigger might be, but the mega-cap stocks carrying the S&P 500 aren't likely to keep "winning" every single day from now until forever. And the odds of a pullback grow every day more individual stocks decline rather than gain. That said... Chris' system remains in "buy mode" for U.S. stocks overall. And all the major U.S. indexes remain in longer-term uptrends, well above their 200-day moving averages. All the indexes have been trading above these moving averages since late 2023, even the lagging Russell 2000. Summing up... We're not saying it's time to go "all in" or "all out" of stocks right now... far from it. Owning shares of high-quality businesses is a critical part of growing and protecting your wealth in this period of still-high inflation (no matter what the powers that be say). But don't panic if you see some negative performance from the indexes soon. We'll also keep an eye out to see if longer-term bullish trends are getting close to a danger zone for the market overall. But we're not seeing that right now... It's the opposite, with several straight days of new all-time highs. Make sure you have an investing plan... As long as you own shares of the "right" businesses, they'll keep rewarding you. So what are the right businesses? They're ones that generate a ton of free cash flow, are growing their margins, and consistently reward shareholders with dividends and buybacks no matter the economic environment. These businesses can keep rewarding you longer than you might think... As Stansberry's Investment Advisory lead editor Whitney Tilson, a former Wall Street hedge-fund manager, told me and Dan on this week's Stansberry Investor Hour, one of the biggest regrets of his career is not holding on to more shares of his high-quality "winners" like Netflix (NFLX) in its relatively early days.  As Whitney said, it's wise to "be greedy" by holding on to your "long-term compounders," like Warren Buffett's Berkshire Hathaway (BRK-B)... Over the years, I owned Apple, Amazon, Netflix, Home Depot, McDonald's, a litany of stocks. That's where I made all my money. Everything else was sort of a distraction... The mistake I made in every single one of them is I sold them too early. From a value investor's perspective, Whitney said you shouldn't hold on to a low-quality business or buy shares just because the stock "looks cheap." But some great businesses may become cheap – and good buys – in a drawdown. That's what happened with Meta Platforms (META) back at the end of 2022. Whitney was pounding the table to buy shares of the stock at its lows, down 76% from September 2021 to October 2022, because he thought it was still a high-quality business whose short-term concerns (like Apple changing up its privacy controls for iPhone apps and "metaverse" intentions) were overblown... Be patient and look for once-great businesses that are facing some short-term headwinds. The key is you need to figure out, "Are these short-term headwinds or is this business permanently impaired?" But Whitney also said it's appropriate and wise to sell stocks that aren't generating profits like they used to and where your original investment thesis has changed materially. He used Valeant Pharmaceuticals (now Bausch Health) as an example. Several years ago, it had taken on too much debt and saw its growth strategy of acquiring competitors and raising the prices of their drugs run its course as political pressure against pharmaceutical companies intensified ahead of the 2016 presidential election. As a result, its acquisition targets dried up. As Whitney said... You had to see that [its] business model and growth was driven by a couple of key pillars [and] that those pillars had just been blown out. What you were now left with is Wile E. Coyote had gone off the cliff, and the legs were spinning wildly and [it] was about to plunge, and worse yet there was a lot of debt. So the stock went down by 97% peak to trough. As an investor you need to have the judgment to be able to look at Valeant down 75% and Facebook/Meta down 75% and be able to figure out one of those is an insanely great company, that they're fixing short-term things, and it's going to recover... and the market is just panicking on short-term factors versus Valeant, which after it went down by 75% went down by another 85%. Now, that's a value trap, and you've got to be able to distinguish between those two. You can hear all of Whitney's investing thoughts (including his anecdote about Netflix) in our full interview. You can watch or listen for free here or catch the full podcast on your audio platform of choice by searching "Stansberry Investor Hour." Try our flagship Stansberry's Investment Advisory research... If you're interested in learning more from Whitney and our team, be sure to check out this offer to subscribe to our flagship Stansberry's Investment Advisory newsletter. In a brand-new presentation, you'll hear directly from Whitney and Stansberry Research senior analyst Brett Eversole, who recently sat down on camera together to talk about their market outlook, the prospect of a "Melt Up" ahead, and much more. They even share the name of one stock they believe is positioned to grow by five times for free... And you'll hear all the details about how you can get started with a subscription to Stansberry's Investment Advisory today at a steep discount to the normal $199 rate. You'll get access to the entire Investment Advisory model portfolio, archive of past issues, and special reports... including a brand-new one with five recommendations. You'll also start receiving new picks and portfolio updates from Whitney and our team each month. What's even better, you can try a subscription risk-free with a 30-day trial. You'll have 30 days to review everything and decide if it's right for you. If not, we'll issue a full refund and part as friends. Click here to learn more. Existing Stansberry's Investment Advisory subscribers and Stansberry Alliance members can access the research we're talking about here, including a pair of brand-new, Melt Up-related special reports here and here. New 52-week highs (as of 7/9/24): Apple (AAPL), Applied Materials (AMAT), Alpha Architect 1-3 Month Box Fund (BOXX), Costco Wholesale (COST), iShares MSCI Emerging Markets ex China Fund (EMXC), Intercontinental Exchange (ICE), KraneShares MSCI Emerging Markets ex China Index Fund (KEMX), Kinross Gold (KGC), Eli Lilly (LLY), Motorola Solutions (MSI), ProShares Ultra QQQ (QLD), S&P Global (SPGI), ProShares Ultra S&P 500 (SSO), Torex Gold Resources (TORXF), The Trade Desk (TTD), Vanguard S&P 500 Fund (VOO), Verisk Analytics (VRSK), and the short positions in Cracker Barrel (CBRL) and Teladoc Health (TDOC). In today's mailbag, feedback on yesterday's edition, where we reintroduced the concept of a market "Melt Up" that can push asset prices to unimaginable heights... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Dave Portnoy is a great guy, a little goofy, but a great guy, and very wealthy!!!! Don't be [besmirching] him." – Subscriber Dennis M. Corey McLaughlin comment: Thanks for the note, Dennis. I wasn't intending to besmirch Dave Portnoy, but to point out that if or when he and his daily trading exploits and comments like, "Stocks only go up!" start appearing in the mainstream financial news and become immensely popular again, it will be a good signal that the market is in "Melt Up" territory. In other words, the level of his popularity is an anecdotal indicator. All the best, Corey McLaughlin
Baltimore, Maryland
July 10, 2024
Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios | Investment | Buy Date | Return | Publication | Analyst | MSFT
Microsoft | 02/10/12 | 1,465.4% | Stansberry's Investment Advisory | Porter | MSFT
Microsoft | 11/11/10 | 1,447.0% | Retirement Millionaire | Doc | ADP
Automatic Data Processing | 10/09/08 | 860.4% | Extreme Value | Ferris | WRB
W.R. Berkley | 03/16/12 | 723.5% | Stansberry's Investment Advisory | Porter | BRK.B
Berkshire Hathaway | 04/01/09 | 627.9% | Retirement Millionaire | Doc | HSY
Hershey | 12/07/07 | 451.8% | Stansberry's Investment Advisory | Porter | TT
Trane Technologies | 04/12/18 | 434.0% | Retirement Millionaire | Doc | AFG
American Financial | 10/12/12 | 429.3% | Stansberry's Investment Advisory | Porter | NVO
Novo Nordisk | 12/05/19 | 406.7% | Stansberry's Investment Advisory | Gula | TTD
The Trade Desk | 10/17/19 | 384.1% | Stansberry Innovations Report | Engel | Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals | | 5 | Stansberry's Investment Advisory | Porter/Gula | | 3 | Retirement Millionaire | Doc | | 1 | Extreme Value | Ferris | | 1 | Stansberry Innovations Report | Engel |
Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio | Investment | Buy Date | Return | Publication | Analyst | wstETH
Wrapped Staked Ethereum | 12/07/18 | 2,291.8% | Crypto Capital | Wade | BTC/USD
Bitcoin | 11/27/18 | 1,442.9% | Crypto Capital | Wade | ONE/USD
Harmony | 12/16/19 | 1,141.8% | Crypto Capital | Wade | MATIC/USD
Polygon | 02/25/21 | 753.9% | Crypto Capital | Wade | AGI/USD
Delysium AI | 01/16/24 | 311.1% | Crypto Capital | Wade | Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio.
Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios | Investment | Symbol | Duration | Gain | Publication | Analyst | | Nvidia^* | NVDA | 5.96 years | 1,466% | Venture Tech. | Lashmet | | Microsoft^ | MSFT | 12.74 years | 1,185% | Retirement Millionaire | Doc | | Inovio Pharma.^ | INO | 1.01 years | 1,139% | Venture Tech. | Lashmet | | Seabridge Gold^ | SA | 4.20 years | 995% | Sjug Conf. | Sjuggerud | | Nvidia^* | NVDA | 4.12 years | 777% | Venture Tech. | Lashmet | | Intellia Therapeutics | NTLA | 1.95 years | 775% | Amer. Moonshots | Root | | Rite Aid 8.5% bond | | 4.97 years | 773% | True Income | Williams | | PNC Warrants | PNC-WS | 6.16 years | 706% | True Wealth Systems | Sjuggerud | | Maxar Technologies^ | MAXR | 1.90 years | 691% | Venture Tech. | Lashmet | | Silvergate Capital | SI | 1.95 years | 681% | Amer. Moonshots | Root | ^ These gains occurred with a partial position in the respective stocks.
* The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%.
Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio | Investment | Symbol | Duration | Gain | Publication | Analyst | | Band Protocol | BAND/USD | 0.31 years | 1,169% | Crypto Capital | Wade | | Terra | LUNA/USD | 0.41 years | 1,166% | Crypto Capital | Wade | | Polymesh | POLYX/USD | 3.84 years | 1,157% | Crypto Capital | Wade | | Frontier | FRONT/USD | 0.09 years | 979% | Crypto Capital | Wade | | Binance Coin | BNB/USD | 1.78 years | 963% | Crypto Capital | Wade | | 
