2021 was a great year to be a trader. And 2023 is shaping up to be even better!
Back then, I made $1.08 million in trading.
Mariana became my youngest and first female Millionaire Challenge student to hit the $1 million milestone.
Bryce Tuouhey, my most recent Millionaire Challenge student to hit $1 million, went from barely turning a profit to up almost $500,000 that year.
Celebrating his milestone with a victory drink
So, believe me when I say some markets are for earning and some are for learning.
Admittedly, 2022 was a slow year for most traders.
But things began to heat up these last few weeks…like steel-melting hot.
In fact, I’ve started to increase my size, getting more aggressive with my trades.
I know a lot of folks are worried about buying the top because, let’s face it, we’ve been in a bear market for the better part of a year.
However, there are five key reasons why I’m getting more aggressive right now.
Let me lay out my case and see if you don’t agree with me.
Table of Contents
#1 A rising tide lifts all boats
Markets follow the laws of physics like any body of mass.
Once in motion, they tend to stay in motion unless acted upon by an outside force.
When the bears decided to take control in 2022, they made sure to sell every rally.
Technology stocks fared the worst, with some losing more than 90% of their value.
Heck, Carvana (NASDAQ: CVNA) cratered from its $376.83 high to trade below $4.00 by December 2022.
Now, we’ve seen the January effect in full force, with the most beaten-down names jumping 100%, 200%, 300%, or more.
Tesla (NASDAQ: TSLA) has nearly doubled off its lows.
Meta (NASDAQ: META) has doubled off its lows.
These aren’t small companies either. They’re huge and make up significant chunks of the major indexes.
So, when these companies move, it tends to bring in more buying.
That’s why many crypto plays like Marathon Digital Holdings (NASDAQ: MARA) have more than doubled in the past month.
People get FOMO and jump in, not wanting to miss the ride.
#2 Stocks are still well off their highs
Despite all these huge gains, many stocks are well off their highs.
CVNA was up more than 459% off its lows last week. Yet, that still puts it almost 95% off its all-time highs.
TSLA is still down more than 50% from its all-time highs…META is almost 50%.
Don’t get me wrong, the bounces are huge. But there is a ton of headroom above them.
My 7-Step Penny Stock Framework describes EXACTLY what we’re seeing here.
Companies like CVNA or Bed Bath and Beyond (NYSE: BBBY) didn’t suddenly become profitable overnight, nor did bankruptcy concerns disappear.
This is just what happens when buyers and promoters get ahold of beat-down names.
#3 Lots of excitement and new tech
On top of that, we’re hearing a lot about some really cool technology like ChatGPT.
Although these types of bullish reactions almost always fail, they create huge opportunities in the meantime.
I’ve watched day after day when our StocksToTrade Breaking News Team reports on a ChatGPT-related headline. The next thing you know, shares are soaring.
Sure, it will run its course. But there are plenty of opportunities in the interim.
Plus, there’s been a recent hype amongst penny stocks trying to go after ‘illegal short sellers.’
That’s scared a lot of bears and sent names like Genius Group Ltd. (AMEX: GNS) up more than 700% in a matter of days.
Broad themes like these, coupled with heavy promoter activity, is a recipe for bullish behavior.
#4 Great price action on bad news
Last week, the Fed announced another rate hike and said to expect more.
Inflation hasn’t receded all that much, and we’re still looking at a recession.
Yet, the market skyrocketed after the announcement.
I’ve even seen some lousy earnings releases that still send shares higher.
When people start buying news, regardless of how bad it is, you know there’s a bullish sentiment underpinning the market.
And as a trader, we can ride that so long as we manage our risk appropriately.
#5 Multiple intraday runners
Taken together, these influences created favorable conditions for multi-day runners.
One of my favorite stocks last year, Global Tech Industries Group Inc. (OTC: GTII), tripled in the past few weeks.
My watchlist contains nearly twice as many stocks as it did even a month ago.
And most days, those names are green.
This is one of the easiest ways to see how bullish a market truly is.
When there’s momentum and story behind the trade and the market, that’s when the conditions favor higher win-rates and bigger runners.
But do your homework.
Go back through stocks that you watch and see how they’ve performed over the past few weeks. Then compare it to last month.
I’m willing to bet you’ll see a clear difference in the overall trend.
That’s what justifies a little bit more meat in my trading.
–Tim
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