The Stock Market Is LYING To You... Buy These 3 Stocks NOW

[00:00:00] Speaker 1: The stock market looks like it's been going sideways all summer, when in reality, it's actually been going up. Why the discrepancy? Well, it has to do with how the indexes are structured. Today, I'm going to show you what's really going on beneath the surface. I'm going to show you what I believe is the strongest area in the market right now, and I'm even going to identify a couple of stocks I believe are buyable today. No wasting time today, let's just go ahead and dive right in. So, this is SPYs, the ETF that tracks the S&P 500 index. And when you look at it, as I said, it looks like we've gone essentially nowhere since May, just chopping around, going pretty flat. But here's the thing, indexes are market cap weighted. What does that mean? It means the S&P 500, which represents the 500 largest stocks in the U.S., each company does not get 1 500th of that index. It is weighted based on the size of the company, which means your NVIDIAs and Microsofts and Teslas and Apples and Amazons are a much larger portion of that index. In fact, 10 names represent 40% of an index. This is supposed to represent 500 stocks. And when you weight it equally, you take all 500 stocks, each of them get 1 5th of 1% of that index, you get the RSP. This is the ticker for the S&P 500, equal weight ETF. And when you equally weight stocks, you see that we've actually been going higher. And this can create some big opportunities if you know where to look, if you know which areas of the market are actually rising. One of the strongest areas right now is cybersecurity. Ticker CIBR is the ETF. This is the whole basket of stocks. So when an entire group rises 50% in a month and a half, that's telling you where the money is flowing. And the argument here is pretty simple. As AI continues to get more advanced, as quantum computing comes around, these big Fortune 500 companies sitting on millions of credit card numbers and social security numbers and trade secrets and all kinds of data don't want to be hacked. And the level of security they need to prevent that continues to escalate as AI advances. They need this agentic AI level defense from the big companies. And you look beneath the surface of the market, and I'm going to show you a couple of stocks and your perfect buy points right now. But look what we're seeing. The number of net new highs here in green continues to paint positive. So it would be impossible for the stock market to stay flat for three months if every single day more stocks are making new 52-week highs and 52-week lows. It is clearly strong. The index is just hiding it. When we look here at the bottom in white is the percentage of stocks above their 200-day moving average. So U.S. composite on top, percentage on the bottom. It is not deteriorated. We are not seeing stocks roll over, which we would be if the market were flat for three months. And one of the biggest tells of all is here the advance decline line. This is a rolling average of how many stocks ticked up or down each day. And it is one of the best precursors to both markets about to break out and markets about to roll over. And when you see the advance decline line making highs while the market is flat, it is telling you there is great strength beneath the surface, which is likely to soon be reflected in the overall indexes. So this is a time, despite what everyone would tell you, despite the grand fears and conspiracy theories, despite the high valuations, we're still risk-on. I'm still looking to buy stocks. Let me show you a couple of them I like in here in the cybersecurity space. One of them is Rapid7, ticker RPD. Now, this stock had a tough couple of years, okay? We're from 60 to 6. That is nasty. But when stocks get very cheap like this, if they turn around, the upside can be huge. Because going from 60 to 6 is a 90% drop. Going from 6 to 60 is a 900% gain. I'm not saying it's going to go all the way there, but you see the analogy, right? So huge, huge strength off the low here in June and July. And look, this is normal. We don't want it to go straight up. When a stock goes up 114% in a couple of weeks, it needs to take a breath. So our job is not to chase these. It's to wait until the stock pulls back, puts in some consolidation, meaning a couple of days where we see that buyers are beginning to step in, and then resumes its uptrend. So I like this trade because we can risk less than $1 a share on RPD and have a free look at $5, $10, $15 potentially dollar per share profit. So I think RPD is viable here at the pullback. I'm just testing this is a short-term low. So I mean, you could run a stop down here around $9 a share. So give it a little bit of room. Give it 7%, 8%, 9%. But this is a leading stock and a leading group in a deceptively strong market that you're getting to buy on a nice 40% pullback. Another one in the same space, and we looked at this one the other week in our live training session on Monday, is Checkpoint Software. So like a lot of the other cybersecurity stocks, they had big runs up in 23. They got clobbered in 25 and early 26 as software sold off. But then they are putting in these perfect consolidation bottoms here where the stock sells off. It continues to sell off until buyers step in. It starts to shallow and tighten. We see supply getting absorbed. Excuse me. And nice strong day up 4% today. So looking for a breakout higher. And the last place of any significant supply in this stock is probably up here in this kind of $190, $200 area. So could be a fairly quick run up here, which is going to be, what is that? I don't know, 40 plus percent to the upside. So like the other, again, don't risk the farm on it, but the structure is perfect. It's showing a lot of strength. Moving averages are turning up. The stock's having some decent little updates here on volume. I think you could buy CHKP, risk 10%, have a nice look. Very high reward to risk trade. Okay. And then one other, the market leader, let's say being CrowdStrike. And CrowdStrike, you know, like a lot of the other big, big run up in here. But this is a perfect technical buy point in a leading stock. Okay. And I'll give you a little rule to take home with you here. Anytime you buy a breakout, not in a little $2 stock, right? But like in these big institutional grade, you know, mega cap, hedge fund caliber stocks, it's an absolutely perfect breakout right in here. Okay. So it runs from 120 to 200. You always buy, always buy the first touch of the 50-day moving average. And that's right here at 178. So pull back to the 50-day. I think you got a perfect buy on CrowdStrike. Nice little add-in. It's also right here at the previous little shallowing breakout area. So you can trade this one really tight if you want. You could buy it here. I mean, you could low of day this stop at about 173, which is 5%. I'd probably give it more like 9 or 10. A little bit of breathing room given this market. But got a good stock, good average daily range, perfect little pullback buy point, leading group, strong market, everything lining up. So that's the three stocks in the cybersecurity area. Why I like them in this market. Now, if you want to learn more, you need to join my Black Ops trading service. It is $5 for the whole year. We do sessions like what I just showed you in five minutes. We do for an hour every single Monday. You'll get it for a whole year for just $5. Along with some indicators that show you the leading groups. You're going to get my weekly newsletter, tons of stuff, just five bucks. So click that link, scan the QR code over here in the corner, or just go to tradewithross.com to get signed up. Don't forget to subscribe to the channel, and I will see you in the next video.