An indicator I’ve helped make famous is sending another strong signal.
The epic squeeze that started last week – including the worst-performing sector, large-cap tech, rising 8%?
It’s likely to take stock prices much higher from here.
How do I know?
I’ve got an exclusive set of data…
My Magazine Covers
Take a look at this series of magazine covers from The Economist. These are all from April…
The Economist is already counting down the days until President Trump’s term ends. They’re talking about a “dollar crisis” that started in December.
It’s all “chaos” and “ruination” to them. Like the United States of America is just going to up and disappear…
And all this pessimism tells me the epic squeeze that started this month is likely to take stock prices much higher from here.
We have a recent example of the exact opposite phenomenon.
Let’s take it all the way back to the fourth quarter of last year.
Six months ago – in October 2024 – the brilliant folks at The Economist were talking about the U.S. and its economy as the “Envy of the World”…
You know what happened during the first quarter…
The U.S. Dollar got destroyed. U.S. stocks underperformed the rest of the world by one of the widest margins in American history.
And we were all over it. We sounded the alarm about a U.S. Dollar collapse in December.
We pounded the table about why you should buy Chinese stocks.
We highlighted other assets likely to benefit from a falling U.S. Dollar and an underperforming American stock market.
The setup right now is about more than just The Economist and its magazine covers, though.
We’re seeing extremes across the board in our sentiment indicators.
Take the most recent survey from the Conference Board, which found that almost half of consumers expect stock prices to fall.
The University of Michigan Consumer Sentiment Index just hit its fourth-lowest level on record. This data goes back to the 1950s.
Consumer expectations fell to 47.3 in April from 52.6 in March and are down 32% since January.
This is the steepest three-month percentage decline seen since the 1990 recession.
When the journalists and the surveys are all this sad…
As a trader and an investor, it makes me really, really happy.
Why Things Are Already Bullish
I get a lot of credit for the “Magazine Cover Indicator” these days.
The curriculum for the Chartered Market Technician designation course includes some of my work in the section on it.
That’s probably because I have one of the greatest collections of contrarian magazine covers of anyone I know of.
BusinessWeek… Forbes… Fortune… Time… The New Yorker… The Economist… so many issues of The Economist…
But, I promise you, investors and traders have been analyzing magazine covers since well before I was even born.
So, what is the “Magazine Cover Indicator”?
More importantly, what is it telling us about how to profit in the stock market today?
Journalists are great at a lot of things.
Where they bring the most value is by aggregating consumer sentiment.
They do a decent job aggregating investor and trader sentiment, too.
But think about it like this.
First, a journalist (who is probably not educated or trained to analyze or understand financial markets) has to figure out what everybody is thinking.
They have to write an article and submit it for editing and proofing.
There’s also art and design to consider. Then the creative team has to get approval from the publishers.
By the time the magazine cover is ready to sit on shelves at airport bookstores, weeks – even months – have passed.
And it’s probably too late…
In fact, I know it’s too late.
That doesn’t mean it can’t be of value to us.
Right now, the “Magazine Cover Indicator” is extremely bearish.
But that’s a strongly bullish signal for us.
Are you in?
Stay sharp,
JC Parets, CMT
Founder, TrendLabs