The Dirty Little Secret the Market's Hiding from 95% of Investors

The stock market is lying to you — again.

It’s showing you one thing on the surface, but another thing altogether underneath, invisible to 95% of investors. But today we’re going to duck beneath the waves to get the truth about what’s really driving the market right now.

And once you see the answer, you’ll know why we have such a lucrative trade on our hands…

Listen, I’ve said it before and I’ll say it again: The surface Dow and S&P 500 numbers aren’t always going to tell you the whole story. Just because the overall market’s up doesn’t mean every stock will be up—and not every stock will be down when the market’s down.

Remember, it’s a market of stocks—not a stock market. And you have to be selective.

Right now, the S&P is a couple of weeks and a little more than 2% removed from its all-time highs. If I showed you a chart it would look like a perfectly normal bull market. But that chart wouldn’t show you one key metric: participation. That is, the number stocks in the S&P 500 that are actually rising with the overall index.

Consider this: fewer than half the stocks on the S&P 500 are trading above their 50-day moving averages. That means the majority of stocks in the index are trending lower. You can see the precise point when these stocks diverted from the index in early April. Take a look for yourself:

That’s right. The S&P just keeps on chugging along—even though the majority of names have fallen off the back of the boat.

How’s that possible? Because a handful of market-beating stocks and industries are pulling the major averages higher…

They’re doing all the heavy lifting, while the majority of stocks are sitting on their butts, slacking off, just going along for the ride.

One of these groups of outperformers is a name you’ll recognize. I’m talking about health care. Yes, health care and red-hot biotech names are still among the top performers in 2015, taking all the freeloaders higher. These are the stocks propping the markets up right now.

The health care sector is up nearly 9% year-to-date. The S&P? Up just a little more than 1% as of yesterday afternoon. There’s your outperformance…

And you want to stick with the leaders if you want to make money under these deceptive market conditions. You can’t just throw a dart at the S&P and expect to hit a winner. Not in this market…


Greg Guenthner
for The Daily Reckoning

P.S. Buy health care stocks. Doctor’s orders! If you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, for FREE, right here. Stop missing out. Click here now to sign up for FREE

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