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This Rare Anomaly Says Stocks Can Jump 15% in Three Months

By Brett Eversole
Monday, July 31, 2017

The "Melt Up" is here, my friend.
You can either get on board... or let the market pass you by. And right now could be the beginning of the next leg higher for the Melt Up.
You see, the tech-heavy Nasdaq Composite Index – the leader during the last Melt Up – just saw a rare anomaly.
This rare event hasn't happened since February 2015. (Before that, it hadn't happened since 2009.)
History says it'll likely lead to big returns... Gains of 15% in just the next three months are possible. It's the next leg higher in the Melt Up.
Let me explain...
We're in the late innings of a historic bull market. But the boom isn't over yet.
As my colleague Steve Sjuggerud has explained... the biggest gains come in the last few innings... when the market "Melts Up" before suffering a major "Melt Down."
We're smack in the middle of the current bull market's Melt Up. But history says it's not over yet.
One reason is a rare anomaly that happened in the Nasdaq. The index recently moved higher for 10 straight trading days.
That's a rare feat. As I mentioned, it has only occurred two other times during the current bull market.
You can see the recent run in the chart below...

The Nasdaq moved higher every single trading day from July 7 to July 20. The current market uptrend is strong.
Of course, even during a strong bull market, stocks usually have plenty of down days. The recent run is a rare anomaly... And one we should pay attention to.
In short, stocks tend to keep going up after these rare strings of consecutive up days. The table below shows what similar extremes have meant for the Nasdaq since 1971. Take a look at the returns...
After extreme
All periods

Again, this is a rare anomaly. It's happened less than 1% of the time since 1971. But it's also occurred before big gains in the Nasdaq.
Specifically, buying after the Nasdaq jumps 10 days in a row has led to a 2.3% gain in one month and a staggering 14.6% gain in three months.
A gain of 15% in three months seems like a crazy prediction... But the Melt Up is in full effect... and history points to big gains after this rare anomaly.
Now isn't the time to be timid and sit on the sidelines. It's time to be bold and buy.
Get out there and do it.
Good investing,
Brett Eversole

Further Reading:

Stocks aren't the only market booming today. Last week, Steve showed DailyWealth readers a "one click" way to profit off another bull market. Read more here.
As the market marches higher, volatility remains at historic lows. But earlier this month, Brett pointed out one sector experiencing higher-than-average volatility... and explained why it could lead to big gains. Get the full story here: Volatility in This Sector Just Hit a 15-Year High.

Market Notes

Coca-Cola (KO)... soft-drink titan
Microsoft (MSFT)... Windows, Office, Xbox
Amazon (AMZN)... "FANG" stock
Facebook (FB)... "FANG" stock
HSBC (HSBC)... financial services
Morgan Stanley (MS)... financial services
Mastercard (MA)... credit cards
Visa (V)... credit cards
Priceline (PCLN)... online travel
Sotheby's (BID)... auctions
Live Nation Entertainment (LYV)... concerts
Madison Square Garden (MSG)... sports and entertainment
Activision Blizzard (ATVI)... video games
Electronic Arts (EA)... video games
Weight Watchers (WTW)... Oprah's latest winning venture
Exelon (EXC)... utilities
Aetna (AET)... health insurance
Dow Chemical (DOW)... global leader in chemicals
Becton Dickinson (BDX)... needles and syringes
Century Aluminum (CENX)... aluminum
Southern Copper (SCCO)... copper
Waste Management (WM)... "recession-proof business"

IBM (IBM)... 21 straight quarters of declining revenue
Snap (SNAP)... overhyped social-media IPO
Regal Entertainment (RGC)... movie theaters
Public Storage (PSA)... self-storage
Bed Bath & Beyond (BBBY)... "another victim of Amazon"
Buffalo Wild Wings (BWLD)... restaurant chain
Cheesecake Factory (CAKE)... restaurant chain

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