In Friday's newsletter we pointed out the S&P 500 was wiggling its way into the tip of a converging wedge pattern. This trading pattern was solidified today, with a lull back to the mid-point of what's become a very narrow trading range. I'm exactly 0% surprised it's happening as we make our way to what's possibly the most pivotal interest rate decision any of us have seen in years. We'll dissect the action as much as we can, as usual. But, there's not a lot to poke around. In any case, with the market effectively on hold until Thursday, I want to take some time today to pass along an object lesson that's been brewing in my head for a while. The best way for me to make the key point is with a quick (and completely mental, on your end) poll. Would You Buy.....? Alright, the premise is simple here. I'm going to describe four different companies here - without naming them - and you're going to determine if they're buy-worthy or not based on the metrics I pass along to you. I'll go ahead and concede right now these are cherry-picked stocks (for a reason), but the numbers are real, and the quick "color" assessments are based on unbiased observations. Just after each one, decide whether or not you'd buy it based on the information you have. This company is a monster in terms of size, and it does use its muscle to push competition around. Yet, despite being in business for about two decades, it's not reliable on the earnings front. It looks like this could change in 2016, with a projected 200% increase in net income. But, even then, the stock's trading at more than 100 times next year's projected profits, which many say are the company's maximum profit levels given the size of its business. Would you buy it? This company is a category leader by far. Though it's been around for a little while, it didn't hit its full stride until 2015. Competitors are starting to creep in, but given the power of the brand name of this particular organization, it's unlikely those newcomers pose a real threat. Best of all, the bulk of the potential market has yet to be anywhere near fully tapped, even if there's a likely cap on the category's market size. Would you buy it? This company is well known, and well-liked, mainly because it sells a household product most of us use. But, the bigger it gets and the more profits it sees, the more competition becomes willing to go after the same target market. The killer is the valuation. This stock trades at more than 300 times its projected 2016 earnings, and though the CEO vaguely talks about wider profit margins in the future, it never seems to get there, and probably won't. That may be because the company's got long-term liabilities that are four times greater than its typical annual gross profits, and 30 times its typical annual net income. It can now only compete by cutting prices, but it's already committed billions based on product prices that are neither sustainable nor elastic. Would you buy it? This company is on pace to pump up its top line by 20% this year, and by 16% next year. And, income is expected to grow 17% this year and 13% next year, only slowing down (like sales) because it's keeping a steady whole-dollar growth pace. It's also reliably profitable, in addition to boasting a well-voiced value argument. The stock trades at a palatable forward-looking P/E of 13.1, which passes the rule-of-thumb test that says a P/E ratio shouldn't exceed a company's earnings growth rate. Would you buy it? And just for the record, it's not as if any of the above numbers or data just recently, suddenly popped up. The market was well aware of these situations a long while back. Those companies are, in order of appearance... Amazon.com (AMZN). Yep, any other stock wouldn't survive the results Amazon has posted for twenty years now, but paper-thin margins and no real hope for any real profits - ever - haven't prevented AMZN shares from gaining 68% this year. GoPro (GPRO). There will come a point in time when the world will own all the sports/action cameras it needs, but we're nowhere near that point. And yet, GPRO has lost 65% of its value since October's peak. Netflix (NFLX). In case you've not figured it out yet, Netflix is a near-carbon-copy of Amazon, developing the habit of sacrificing current and future profits in the name of revenue growth. It's a bad habit to get into, however, as Amazon knows. There's always some other competitor out there willing to sell the same product for just a little bit less, or give away a little more. That's not prevented NFLX from gaining 94% year-to-date, though. SunPower (SPWR). It's a fact that's been largely obscured by the implosion of oil, but the beat of solar power's growth march is still sounding strong. It hasn't helped SPWR shares one bit over the past twelve months, however. The stock's 40% lower in that timeframe. The moral of the story is - and this is an idea tough for some investors to digest - when it comes to stocks, we see what we want to see. We'll dismiss details we don't like if they don't jibe with our point of view regarding that company, yet, our point of view regarding most companies is driven by the media's ever-swaying stance on a stock. Here's the thing.... I'm not saying it's a bad thing or a good thing. I'm just saying, it's a reality we have to accept in our modern era of trading. Fundamentals matter less and less, and stories matter more and more. Some of you realize this, while others may not. And, many of you may have realized it without even realizing you knew it. Whatever the case, if you needed a second opinion as to whether that's the way the modern market really worked or not, consider this that second opinion...and consider this permission to go ahead and officially make this part of your trading repertoire. To be clear, fundamentals still matter! In the end, the media and the market will always figure out a way to make sure a stock reflects the company's underlying performance. It's the "in the meantime" where the opportunities lie, however, and that's where the stories and rhetoric come into play. On that note... I can't tell you which one, but the Elite Opportunity actually made a trade on one of these four stocks today for the same reason we just described - there was a mismatch between the way things really are for the company and the way things have been for the stock. We talk about the premise from time to time, but today, John Monroe found one of those "in the meantime" situations that can develop when things don't quite make sense. Honestly, I think playing the reversal for any of those four stocks would be a decent trade, but I've got a feeling John found the most potent setup for EO members. And to answer the next question, yes, it really was a coincidence one of the four examples of a mismatch we explored above was one of the Elite Opportunity picks for today. On the other hand, I'm not entirely surprised. Opportunities are opportunities, and I've learned a lot from John about timing entries just by being an EO subscriber - the time to get in is when it seems the least obvious. If you'd like to become a better-equipped, savvy trader - or if you just want John Monroe pick stocks for you - I think a subscription to the Elite Opportunity service could be the best investment you make all year. Here's how, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ Now, about this market... Here Comes the Calm Before the Storm This won't take long, mainly because there's just not much to say. The chart does most of the talking, telling us traders are content to not only let the S&P 500 waffle around inside a trading range, but to let the index's daily high/low ranges contract to basically nothing. Take a look. The VIX is in the same rut, telling us the same story. That is, nobody really wants to commit to a position right now. Again, I suspect they're all waiting to see what Thursday brings. I still contend the market is more likely to make a downside move and break the lower edge of the converging wedge pattern. It doesn't look like the bulls even want to try and test the 20-day moving average line, currently at 1965.5. We better take the hint at face value. If there's nothing that's going to be trade-worthy in the meantime, there's no need to take on a new risk. Whatever's in the cards, buckle up. With all of that being said, although there's not a lot going on for the market between now and Thursday, we're getting some pretty big economic news covered in the newsletter between now and then. We'll be poking and prodding August's retail sales tomorrow, and on Wednesday we'll be dissecting last month's inflation data. It may well hold the key to this week's interest rate decision. We'll hear last month's housing starts and building permits on Thursday, but I've got a feeling we'll have other things on our mind by then.