Our Big Money Index

The Big Money Index (BMI) is one of the most powerful features of our MAPsignals stock-picking system… and it almost wasn’t discovered.

When we created the MAPsignals system, we built it to uncover Big Money buying and selling of individual stocks. But as we watched the system identify winning trade after winning trade, we noticed something else…

While the Big Money tended to buy high-quality stocks and sell low-quality ones, there would be unusual periods when Big Money buying would also include bad stocks. Similarly, there would be periods when Big Money selling would also include good stocks.

So we kept studying the data, and we discovered something amazing…

By looking at Big Money activity across the entire market, we saw that periods of aggressive buying of good and bad stocks alike tended to last for about three to four weeks before ending in a broad market pullback. Likewise, periods of heavy selling of both good and bad stocks usually lasted for one to two weeks before kicking off a market rally.

Without even realizing it, we’d stumbled on the most reliable market timer we’d ever seen.

And now it’s right at your fingertips…

How To Use The Big Money Index

To make the Big Money Index as easy to use as possible, we boiled all our sophisticated analysis down to one number… the BMI ratio.

When the BMI is between 0% and 25% (the green area), selling has gotten overheated, leading the markets into oversold territory. These periods tend to last for about one or two weeks before a broad market rally kicks off.

At the other extreme, a BMI reading above 80% (the red area) means we’ve entered a period of runaway buying and markets are overbought. Periods like this tend to last a little longer, typically stretching about four weeks before leading to a broad market pullback.

We also created a simple visual representation to help our MAPsignals subscribers quickly understand what that ratio means to them as investors…