The Best of the Best

CNBC put out an interesting article this weekend, commenting that we need better economic data before US indices can get back to all-time highs:But do we really need to wait for the big indices to regain their 2018 highs before it's safe to invest? Some argue that we seem to be in a period of market behavior where it may be more prudent to be in individual stocks rather than a broad market index or other types of indexed ETFs.

As John Hopkins of EarningsBeats.com points out, while the indices themselves are still well below their all-time highs (in fact, the S&P is pretty much at the same level it was back in October of last year), there are a plethora of stocks that are trading at their own respective highs. John says that this is proof that "traders remain attracted to the 'best of the best.'"

Two names that John brings to our attention are The Trade Desk ($TTD) and Stryker ($SYK):Steve Strazza, a fellow contributor to The Chart Report, also pointed out earlier this week that there are two sectors that have already reached fresh highs, Utilities ($XLU) and Real Estate ($XLRE). While both of these are considered "defensive" sectors and some market observers will read into this as a negative for the market, it is not a negative at all. In fact, as Steve mentions, "uptrends in Utilities are consistent with uptrends in the S&P.”Taking this a step further, there are also sub-industries that are at or near their respective highs as well. A few that come to mind are: Software ($PSJ). Medical Devices ($IHI), Cybersecurity ($CIBR), Semiconductors ($XSD), and Water Resources ($PHO).

A mindset that technician JC Parets continuously harps on is that "if you trades the averages, you get average returns." Why it's very important to pay attention to what is going on in major indices like the S&P 500, Nasdaq, Russell 2000, etc., there are many opportunities underneath the surface that we can be capitalizing on. If you're waiting for the S&P 500 to get back above 2920, you've already missed a large chunk of potential profits. If you are truly looking for the "best of the best" when it comes to your investing/trading, then these types of charts need to be on your radar.