Markets are bouncing back all over the world… but not many like this one.

In the U.S., we’ve seen a fierce move higher – the S&P 500 Index jumped 11% in just two weeks. But we’re still below the all-time highs of earlier this year. The same pattern is playing out in Europe, Japan, and most other major global markets.

But in one market investors often ignore, we’ve already seen new highs.

The pullback in Canadian stocks is officially over. The iShares MSCI Canada Fund (EWC) hit a new 52-week high last month. And that makes it one of the first major markets to shake off the uncertainty that has plagued stocks this year.

This is a big inflection point for Canada’s market. It means that Canadian stocks are in an uptrend. And history tells us the gains are likely to continue.

Let me explain…

Market inflection points act as guideposts for investors. They’re like “mile markers” for where stocks are today – and where they may go next.

Seeing a market hit a new high is an important inflection point. Typically, it’s a bullish sign. That’s because trends persist… New highs often lead to even higher highs in the short term.

That’s why we want to pay attention to Canadian stocks right now. EWC is just coming off a fresh 52-week high from last month… And it was also a new all-time high for the fund. Take a look…

After peaking in November, EWC traded down or sideways for months. Then, Canadian stocks broke out to a new high in March.

We looked at previous 52-week highs to see what has happened after moves like these. History shows that these inflection points have led to outperformance…

Since 1997, buying after similar setups tends to lead to winning trades. And these returns easily beat a typical buy-and-hold strategy. Check it out…

Canada’s broad market hasn’t done great over the past 25 years, returning just 4.4% annually. You can do better today, though…

Similar cases have led to 4% gains in three months, 6% gains in six months, and an 8% gain over the next year. That’s much better than holding and hoping the fund goes up.

Canada is one of the first global markets to climb out of the recent funk. It’s at new highs once again… And it’s likely to outperform over the next year.

We’ll probably see many markets act in a similar way in the weeks ahead. But Canadian stocks are leading the way. And that makes them worth considering today.

Good investing,

— Chris Igou

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Source: Daily Wealth