It’s time to go shopping. Got your list ready?
And no, I don’t mean holiday gifts — I’m talking stocks.
We’re entering one of the most seasonally bullish stretches of the entire year, at the same time the market is working through a 10-week correction.
That combination — bullish seasonality plus a market that’s already absorbed a ton of selling — is exactly where the best opportunities tend to show up.
This correction started bubbling underneath the surface months ago and officially kicked off when, back on September 11, both the percentage of NYSE stocks in uptrends and the NYSE Advance-Decline Line peaked.
We never know exactly how long a correction will run, but we do know what the end of one looks like — and what it looks like if things get worse.
Remember, every major correction begins as a small one. But not every small correction becomes something bigger.
And when you know the difference, you can start positioning into strength as it emerges.
So what do we do now?
We go shopping.
During Wednesday’s episode of The Divergence LIVE, we walked through our entire watchlist — the setups, the outliers, the names showing real relative strength. Those are the stocks I’m stalking today.
It’s hunting season, and I’m looking for entries.
Did You Make a List?
One of the most valuable things you can do as a trader is make lists.
- These are the stocks you want.
- These are the stocks you wish you had.
- These are the stocks you thought you’d never get another chance to buy.
I keep these lists updated constantly — and I encourage you to do the same.
Because when traders are pessimistic and everyone suddenly thinks the sky is falling, that’s exactly when the best opportunities show up.
Just look at individual investors right now. Coming into this week’s AAII poll, the S&P 500 had exactly one down week in the past month and sits just a few percentage points off all-time highs.
And yet, for the second week in a row, more respondents are bearish than bullish:
We’ve got more individual investors expecting stocks to fall over the next six months than rise… in a bull market. Possibly Year 1 of a new bull market. Let that sink in.
Meanwhile, more than 70% of individual investors now say that the “current level of market concentration in mega-cap tech stocks” is concerning or a major risk:
But as we walked through yesterday — is it actually a problem that the biggest companies make up a large share of the index?
Or is that just… normal?
Because if you look at literally any other country’s stock market, this is exactly how weightings work.
So yes, sentiment is a mess. Concentration fears are exaggerated. Pessimism is everywhere.
That’s the backdrop.
What Do We Do Now?
The real problems start when you don’t have a plan. I’ve been there. It’s chaos. And it’s no way to live — or trade.
Because the moment money is on the line, humans stop thinking clearly. Even the most disciplined, self-aware investors struggle when stress kicks in and prices start whipping around.
So the solution is simple: Remove the human from the decision-making.
Lay out the trade in advance.
Define where you’re taking profits.
Define what would invalidate your thesis.
And then follow the script.
Emotional, spur-of-the-moment decisions in fast markets are the fastest way to blow yourself up.
And if there’s one lesson this business has beaten into me over the years, it’s this:
Don’t do stupid things.
Because that’s dumb.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs