The recent move in energy … how Jeff Clark views trading opportunities in Trump’s first 100 days … business optimism is jumping … Louis Navellier on the possible “peace dividend” on the way
Energy has been heading higher in recent days, and if you acted based on Jeff Clark’s analysis, you’re likely sitting in a profitable trade with more gains appearing to be on the way.
In our Digest one week ago today, we highlighted a budding trading opportunity from Jeff, who’s our newest expert analyst. For newer Digest readers, Jeff is a 40+ year trading veteran with more than 1,000 winning trades under his belt.
Last week, he flagged a potential bullish mean reversion move in XLE, the Energy Select Sector Fund. The indicator that tipped him off was the Bullish Percent Index for the Energy Sector (BPENER).
From Jeff, from last week:
The (BPENER) is on the verge of generating a buy signal. And, if this signal plays out similarly to previous buy signals, then oil stocks could play a big game of “catch up.”
Jeff explained that when the BPENER falls below “30,” it signifies oversold conditions which often leads to a bullish mean reversion rally. So, when he sees an oversold stock U-turn and rally back above 30, he considers initiating a trade.
Last Thursday, the BPENER clocked in at the oversold level of 28.57. But when oil stocks popped the very next day, the indicator shot above 30.
Here’s how the BPENER looked on Monday.
XLE has climbed more than 5% between last Wednesday and Thursday as I write (the market was closed last Thursday when we first profiled Jeff’s analysis).
But energy is just one of the sectors Jeff sees rewarding investors during Trump 2.0
Regular Digest readers know that all our analysts are bullish on investment opportunities arising as the business and investment worlds adjust to Trump’s second term.
Jeff is part of that group. But as a trader, his excitement centers on the surge of volatility he expects, especially during the first 100 days of the new administration.
From Jeff:
When Donald Trump’s second term gets underway, we’re going to enter a period of massive change and volatility.
Love him or hate him, I can’t tell you how excited I am about the profit opportunities this is going to give traders.
Think about it… Trump’s leadership is characterized by bold, decisive, and aggressive action… which creates huge ripple effects across industries. Last time, Trump moved markets with just a few words posted on X (then Twitter).
And this time, he’s got four forces defining his agenda…
Technology, Taxes, Takeovers, and Trade.
Jeff calls them “the Four Ts.” And he believes they’re going to drive massive market opportunities for smart traders. But again, not just in energy. We’re likely to see Trump-related volatility and profit opportunities in a variety of sectors.
Back to Jeff:
Trump’s first moves are going to include massive deregulation, especially in the technology markets. With tech billionaire Elon Musk by his side, this is all but inevitable.
Think about the profit potential that will come with cutting red tape on emerging tech like AI… crypto… and autonomous vehicles.
Trump has already come out in full support of building a strategic bitcoin reserve, which helped drive bitcoin to unprecedented levels… and gave my own readers a 42% gain on one of my favorite ways to play bitcoin… in just two trading days.
What’s more, think about how loosening restrictions on AI companies could accelerate the development of AGI (artificial general intelligence) and spark an “arms race” in tech innovation.
This will have wide-reaching implications… volatility… and, of course, profits for traders.
2025 will not be a buy-and-hold environment.
We’ll bring you more of Jeff’s analysis over the next several days. It’s part of a runup to next Wednesday, January 22 at 1:00 ET, when Jeff is holding a trading event called The Most Profitable 100 Days of Your Life. This is a hat-tip to the first 100 days of Trump’s second term. You can sign up to join Jeff right here.
More on this to come…
Meanwhile, sticking with our “Trump” theme, the business community is energized by Trump’s second term
The latest example came yesterday from Goldman Sachs CEO David Solomon.
From CNBC:
The bank executive said on a conference call Wednesday that other CEOs are feeling better about the direction of the economy and their businesses since the presidential election, even though Trump has yet to take office.
“There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election,” Solomon said…
“Additionally, there is a significant backlog from sponsors and an overall increased appetite for dealmaking supported by an improving regulatory backdrop,” he continued.
Solomon’s comments echo survey data from the latest Chicago Fed Survey of Economic Conditions, which showed an improved outlook for the next 12 months.
Meanwhile, on Tuesday, the latest NFIB Small Business Optimism Index jumped to its highest level since October 2018. Here’s NFIB Chief Economist Bill Dunkelberg explaining why:
Optimism on Main Street continues to grow with the improved economic outlook following the election.
Small business owners feel more certain and hopeful about the economic agenda of the new administration.
Expectations for economic growth, lower inflation, and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year.
In the Digest, we’ve been writing about how expensive stocks are on a relative basis. Generally, we’re in an overbought market environment.
But that’s not to say we’re looking for an immediate downturn. Two things can be true at once.
One, the broad stock market and many stocks can be overvalued today. However, at the same time, economic optimism and bullish investment sentiment can drive the market far higher, and for far longer, than many investors expect.
This is why are position remains the same as it’s been for many months at this point…
Create a detailed investment plan that specifies how you’ll handle a meaningful selloff (specifically, flag which stocks you’ll sell at what pre-appointed stop-loss levels); but with that plan in place, stick with this bull market. After all, bullish momentum trumps everything else…until it doesn’t.
Finally, legendary investor Louis Navellier is eyeing a potential “peace dividend” to support the economy and market this year
Yesterday, news broke that Israel and Hamas have agreed to a deal that pauses their fighting in the Gaza Strip and returns hostages to Israel.
As I write Thursday, it appears the deal is in jeopardy as Israel claims that Hamas has created a “last-minute crisis.” We’ll get to that momentarily, but first, there’s how the deal appeared yesterday:
From The Wall Street Journal:
The deal will be implemented in phases, beginning with an exchange of some of the hostages held in Gaza for Palestinian prisoners in Israeli jails and moving on to talks over a broader end to the fighting…
The terms of the agreement aren’t substantially different from those that were available months ago when more Israeli hostages remained alive and before thousands more Palestinians lost their lives. But several factors have pushed the parties closer recently…
[One of which is that] both sides have been galvanized by President-elect Donald Trump’s imminent return to office. The incoming president said a week ago that “all hell will break out in the Middle East” if the hostages aren’t released by the time he is inaugurated on Jan. 20, repeating a threat he had made earlier.
As to the stumbling block between yesterday and today, the details currently are vague. But here’s NBC News with what we know as I write:
Israel has said its Cabinet will not meet to approve the ceasefire and hostage release deal with Hamas, claiming the militant group was creating a “last-minute crisis.” Prime Minister Benjamin Netanyahu’s office did not elaborate on the claimed issue.
Hamas said it was “committed to the ceasefire agreement, which was announced by the mediators.”
Assuming the two sides can find an agreement, the impact of peace in the region would be enormous – most importantly, for the parties impacted in Israel and Gaza, but also for investors here at home.
Here’s Louis explaining the investment significance in his January Monthly Update in Growth Investor:
Another agenda item [for Trump’s second term] is to end the senseless wars in the Middle East and between Russia and Ukraine.
If Trump 2.0 can do this, the world would benefit from a “peace dividend” like the one experienced when Bill Clinton was president. And if there is peace in the world, then 5% annual GDP growth is possible.
Overall, if the U.S. is firing on all cylinders in 2025, then 4% to 5% annual GDP growth is a very real possibility.
Louis recently put together a research video on investing under Trump 2.0. You can check it out here.
Putting it altogether…
We have an energized business community, enthused investors, and a potential peace dividend.
That’s a recipe for profitable trading conditions.
So, mind your stop-losses and position sizes, but with an effective defense in place, stick with this bull market.
Have a good evening,
Jeff Remsburg
