I’ve been telling anyone who wants to hear it that despite all the headlines and the scary short-term broad market charts, the market is not crashing.
Don’t panic!
Or, as I said yesterday during my Pre-Market Prep, “You can sit there and cry in your Cheerios all day long, or you can look for the opportunity because it’s always out there.”
The reality is that I’m seeing more day trade setups than ever before…
On another positive note, I commented yesterday morning during that same session that I’ve been seeing more and more buyouts lately.
That’s an optimistic sign of things to come, despite all the negative economic news the media is spewing at us.
In fact, increased buyout activity is one of the strongest bullish signals you can get.
Here’s why…
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Big Money Moves First, And They’re Buying
Institutional investors, hedge funds, and corporate executives aren’t dumb.
These are the people with the deepest pockets, the best research, and the clearest insights into the economy’s future.
And if they’re buying other companies, it means that big money isn’t worried about the future because they see opportunity.
And if they’re bullish, why shouldn’t we be?
Buyouts Create a Ripple Effect
One buyout doesn’t just affect the company being acquired…it can lift entire sectors.
First though, the acquired company’s shareholders get a big payday.
Take a look at the chart for 2seventy bio Inc. (NASDAQ: TSVT). This is the penny stock that announced yesterday being bought out by pharma giant, Bristol Myers Squibb (NYSE: BMY).
5-Day, 10-Minute Candles Chart; SteadyTrade
TVST’s price went from around $2.90 per share to $5.06 within minutes.
So what else tends to happen after an announcement like this?
Other stocks in the same industry rally because investors start speculating on the next potential buyout.
Venture capital and institutional money flows in as confidence grows in the sector.
It’s a domino effect—one major acquisition fuels optimism, leading to more investment, more deals, and more momentum.
Companies Don’t Spend Billions Unless They See a Future
When an acquisition happens, the buyer is making a long-term bet on growth.
They’re not thinking about short-term volatility or next month’s headlines…
They’re planning for years down the road.
When CEOs and CFOs, well-paid people whose careers depend on wise financial decisions, are confident enough to put their cash on the table, it’s a bet we should believe in.
It’s a huge sign the market isn’t as shaky as the media wants you to believe.
The Market Loves Certainty, And Buyouts Provide It
One of the biggest challenges in any market is uncertainty.
Heck, we’ve definitely seen how true that is over the last week and half.
You know what isn’t uncertain? A buyout at a premium.
When a company gets acquired, it’s a locked-in deal. Money is exchanged, shareholders are getting paid, and new opportunities are created.
This creates confidence, and when confidence returns to the market, we see:
- More institutional buying
- More bullish sentiment
- Higher valuations across multiple sectors
My Final Thoughts…
You can either listen to the doom-and-gloom headlines…
Or you can follow what’s actually happening in the market.
When buyouts are increasing, we know that the smart money expects valuations to go higher in the future.
That erases uncertainty, which is exactly what the market is craving right now.
The bottom line is this: The future is a lot brighter than the media would have you believe.
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Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade