Healthcare is emerging as a major market leader.
AI could fuel healthcare’s next big growth cycle.
Biotech is leading the charge as money rotates into healthcare.
Most people have absolutely no idea what they’re doing when they talk about the next big winners in the market.
Ask anyone and they’ll tell you what’s going to go 100x next.
Memory stocks. Semiconductor companies. Neoclouds. You name it and they probably own it and are praying they continue to go up.
The problem is that markets are cyclical. And even though many of these trades worked incredibly well in the past.. they might not be the best trade to have on right now.
And that’s what I care about. What do I need to own right now in order to make as much money as I can.
Luckily.. you’re reading this. Because Wall Street is already telling us what the next big AI winner is going to be.
Healthcare.
And it has been for a while.
Since July, healthcare stocks have outperformed the broader market.
I’m not talking about simply holding up better than everything else. I mean actually leading the market higher.
I don’t know anyone talking about this. And that’s fantastic.
The less eyes on it, the better. Because by the time this hits everyones radar, the easy money will be already made.
And if you know anything about how I trade, you know why this matters to me.
I’m here to make the most amount of money I can. Not pick the hardest trades.
So when I see the largest financial institutions buying healthcare stocks.. I simply follow the money.
You Just Gotta Follow The Money
I’m not interested in trying to guess which sector is going to outperform next.
I know I’d probably sell a lot more subscriptions if I lied and said I did.. but after nearly 18 years of trading, I know about 2 people who can confidently tell the future: Stanley Druckenmiller and liars.
Druckenmiller is conveniently long healthcare stocks so I guess there’s a vote of confidence right there.
My process is rooted in watching where capital is flowing from the biggest guys at the top into individual stocks that are emerging as market leaders.
They’re the ones who dictate the next biggest winners. Not me. Not you. The Wall Street giants and professional money managers who have to park trillions of dollars collectively into the market.
And right now the healthcare sector is leaving an incredible Capital Footprint.
But here’s where things get super interesting for me.
Earlier today Randy Dunham pointed out during our coaching call that healthcare is also breaking out against the S&P 500 over the long term.
To put this into perspective.. the healthcare sector is classically a defensive sector. When money is rotating into this part of the market, most investors and traders assume the market is going to crash.
The exact opposite is happening right now.
If this is the beginning of a new leadership cycle, we could be looking at something much bigger than anyone can imagine.
We’re potentially witnessing a Power Shift.
A major trend change in the way the markets move.. entirely controlled by the flow of capital from the largest institutions in the world.
And this isn’t just a handful of mega cap healthcare companies either.
Equal weight healthcare (RSPH) is also outperforming the equal weight S&P 500 (RSP).
In other words.. the strength I’m seeing is spreading out across the entire sector. And that’s exactly what I want to see when evaluating whether a change in leadership turns into the next decade of huge winners.
Big Money Is Making BIG BETS On Biotechnology Stocks
There are a number of great looking industries within the healthcare sector.
We went through four of them today during our coaching call with our members.
But one in particular stands out..
Biotechnology.
Some of the best biotech stocks right now were among the first stocks within healthcare to break out to new all time highs.
Here’s the IBB chart trading into all-time highs:
And now we’re seeing strength develop all across the healthcare sector.
By the way.. that’s an important sequence. I hope you remember it.
The leaders always move first. Then I look for evidence that the rest of the sector is following.
And rather than simply buying healthcare through an ETF, my goal is to find the individual stocks that offer the best trading opportunities to make a bunch of money.
Today’s coaching call was all about narrowing down the list of healthcare stocks we want to buy right now.
Here’s a look at our Group-Confirmed Leaders scanner using the TTI Trade Desk:
This scan looks for the strongest stocks within the strongest industries.. ranked using our TTI Score from 100 to 0.
Seven out of the top eight stocks are healthcare. Knock, knock!
I’m on a mission to find the best trades within the best industries within the best sectors.. backed by Wall Streets money. And share them inside of TTI.
What I’m Watching
For now, I want to see healthcare continue outperforming the broader market. That’s the most important part of all of this for me.
A sustained breakdown in relative strength would force me to reconsider this thesis.. although I don’t think it’s going to happen.
And I’ll be paying particularly close attention to the biotech stocks that started breaking out before the rest of the sector.
My goal goal isn’t to chase healthcare once it starts showing up on FinTwit or Substack lol. As a matter of fact, I hope the rest of the newsletter writers stay far, far away from this area for a long time.
My goal is to recognize where the money is going before the normies catches on.
That’s why I follow the money.
Hamilton
Founder, The Trading Initiative
PS. Of the top 8 stocks on the Group-Confirmed Leader scanner.. which one has the best chance to double from here? Let me know in the comments.