And a gift was given on December 18, when the Federal Reserve said it would slow the pace of rate cuts. The markets fell sharply. Nothing was spared.
Using exchange-traded funds as an index proxy, the iShares Core S&P Small-Cap ETF (IJR) fell more than 4%. The iShares Core S&P Mid-Cap ETF (IJH) fell 3.84%. And the SPDR S&P 500 ETF Trust (SPY) fell 2.95%.
Forced selling is part of being on the market. On December 18, 96.8% of all Big Money signals were sells. Only 11 shares were purchased, while 334 were sold. This is capitulation:
But I’ll soon show you how capitulation is often a harbinger of big profits.
First, though, notice how no sector was spared during the sell-off:
When I look at that chart, I see that all these sales are creating opportunities across industries.
Since 2012, there have been 58 days in which 330 or more shares were sold. But here’s what I mean when I say big gains are ahead – a year later, stocks of all sizes are up more than 20% on average:
These huge capitulation deals are stock sales.
This creates an interesting situation for 2025. As the chart above shows, average returns at the index level are strong.
Still, some individual stocks should perform significantly better. And the best bet is to identify and buy high-quality winners on sale.
Lately there have been some big winners in certain sectors, such as financial, sustainable, industrial and technology.
After the rare capitulation signal of December 18, there are likely to be more fast-rising winners in the future.
It helps to have a MAP to recognize the winners.
One of the winners in the sustainable sector of the past year is Deckers Outdoor Corporation (DECK). Some of the popular clothing manufacturer brands include HOKA and UGG.
As I wrote earlier this month, Big Money is jumping DECK. It’s pretty easy to understand why, with such great sales and profit growth:
Those with a MAP have been on board with DECK for a while. Big Money’s buy signals were visible on the stock, especially those two blue bars above (which mean DECK was a Top 20 buy).
The right research tools can be so valuable – especially after the recent capitulation!
MAPsignals sees what others miss. As 2025 approaches, consider a MAP to guide your investments.
If you’re a serious investor, registered investment advisor (RIA), or money manager looking to research hedge fund quality, get started today with a MAP PRO subscription.
Disclosure: The author does not hold a position within DECK at the time of publication.
This article was originally posted on FX Empire
