This simple indicator removes the “technical” from technical trading
The market has been ugly this week, and financial stocks are taking the worst of it. Tariffs officially went into effect Tuesday morning, and Wall Street hates uncertainty. That’s exactly what we’re getting.
JPMorgan (JPM) took a 4.5% hit Tuesday, and other major financial names weren’t far behind. Historically, tariffs are just another form of inflation — pushing prices higher and cutting into corporate margins.
That’s why the Financials sector (XLF) has been getting hammered.
Stocks have been in free fall, with the S&P 500 dipping below key levels, and investors are scrambling for cover. But not all corners of the market are suffering equally. If you want to know where investors are hiding while financials sink, look no further than insurance stocks.
Why Insurance Stocks Are Holding Up
Unlike banks, insurance companies don’t live and die by interest rates or economic growth. Their business model is built on steady, recurring revenue. No matter what the economy does, people keep paying their home and auto insurance.
That’s why Progressive (PGR) and Arthur J. Gallagher (AJG) have been two of my top holdings. Even with financial stocks getting hammered this week, these names are holding their ground.
PGR has been a rock-solid performer for me. It’s been chugging along just like I expected, and the stock is sitting near all-time highs. AJG has been another great play. It’s been trending higher even as the market falls apart.
Insurance stocks are often considered recession-proof.
People might cut back on discretionary spending, but they don’t stop paying for coverage. That’s why we’re seeing a flight to safety in this sector. As financial stocks sink, investors are shifting their focus to stability, and insurance companies are benefiting.
The Smart Money Move in This Market
As I said, investors are rotating into defensive sectors. That’s why Consumer Staples (XLP) and Health Care (XLV) have been rising while Financials (XLF) struggle. But if you’re looking for stability with some upside potential, insurance stocks are worth a serious look.
The trend has been clear this week.
While JPMorgan, Bank of America (BAC), and other major financial stocks have suffered from tariff-driven selling, PGR and AJG have remained strong. That tells you where the money is flowing.
This shift to defensive names isn’t new. It happens every time uncertainty spikes. The market hates surprises, and tariffs bring just that. But once the dust settles, the strongest sectors usually emerge with renewed momentum.
Right now, that means insurance.
And let’s not forget what’s coming next. The Federal Reserve’s rate decisions, inflation data, and even more political uncertainty are all on the horizon. Financial stocks could stay under pressure for a while. That makes solid, steady insurance stocks an even more attractive place to be.
When fear spikes, speculative money runs for cover. That’s exactly what we’ve seen since tariffs went into effect Tuesday. Financials have been crushed, but Progressive and Arthur J. Gallagher are standing strong.
And in a market like this, that’s no small feat.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. This Simple Indicator Removes the ‘Technical’ From Technical Trading
Please take a moment to watch this…
I’ve coded an indicator that isolates the precise dates to buy in and out of the stock market. According to the creator, it allows me to ride all the market highs while sidestepping the lows.
As you’ll see in today’s free trading session, you simply buy when the candles turn green, and sell when they turn red.
I’ll also teach you how to use and install the indicator on your trading platform…
It only takes about 2 minutes, and it’s made a huge impact on how hundreds of people buy and sell stocks.
The performances displayed here are historical examples based on Newton’s signals for the time period shown. They are not indicative of future results, and you may lose money. Based on our backtesting, Newton’s signals posted a positive outcome 80% of the time.
