ESP Tuesday: Market Consolidates as Horde of Fed Speakers is on Tap. Bullish Underpinnings Suggest the Pause will Refresh.

Consolidations often Hide the True Trend. Plus, two new under the radar picks with excellent potential.

The major indexes are consolidating but inside the market there is plenty of bullish action in individual companies; two of which I’m adding to the ESP portfolio today. One of the companies is poised to profit from the steady demand for data center infrastructure, while the other is a stealth winner from the most recent tariff related developments.

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Indeed, when looking at indexes, you often miss the true action that is brewing underneath the veneer created by the big stocks, which is why my first indicator is the New York Stock Exchange Advance Decline line (NYAD). That’s because this single line tells me more about the odds of picking winners in any market than any other indicator.

It’s quite simple actually. When NYAD rises it tells us that more stocks are appreciating in price than those that are falling. That means that the potential for a fertile profit harvest is in our favor. There is no distortion from market weightings of large stocks, which means that even if Microsoft (MSFT) is having a bad day, you can still be confident in buying stocks with favorable characteristics.

Market Update

This morning, the NYAD is in a constructive pattern as it remains above its recent breakout point. Thus, the odds of picking winners are favorable. For full details consider a subscription to the Smart Money Passport.