When stock markets were correcting, back in February of this year, and the vast majority of investors and financial media were panicking, InvestingHaven’s research team came out with this forecast: Amazing but True: ‘Risk On&’ Indicator Turning Bullish, Good For Stocks. Now, almost 3 months later, the question is whether we still believe stock markets will do good in the coming months.
The short answer: yes.
The long answer: yes but one of our leading indicators should respect its current levels. We are talking about high beta stocks represented by the SPHB ETF. High beta stocks are the ultimate winners if investors are in a ‘risk on’ cycle.
The SPHB chart looks amazing. Not only are there clear rising channels visible, but also is the lower trendline being tested for the 6th time since last summer (green annotated circles).
Why is this important news? Because this trendline should hold strong to get a confirmation that ‘risk on’ continues. If SPHB goes lower from here, the rising channel is broken to the downside, in which case we have to look for another dominating pattern.
Needless to say, this is major news, and investors will certainly not read this on financial media. As always, InvestingHaven’s research team does everything to bring the real news that truly matters. We watch SPHB closely in the coming days and weeks, and we know for sure that smart investors do so as well.