• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

MAPsignals

We map big money.

  • Latest Insights
  • Power of MAP
    • MAP Products
    • MAP System
    • White Papers
    • Videos & Interviews
    • Big Money Podcast
  • Profit with MAP
  • About
    • About MAP
    • MAP Team
    • MAP System
    • MAP Products
    • Big Money Index
  • Members
    • Get Started With MAP
    • My MAP
    • MAP View
    • MAP Options
    • MAP Top 20 Weekly
    • MAP 50
    • Member Updates
    • Platinum Updates
    • Members Only Posts
  • Latest Insights
  • Power of MAP
    • MAP Products
    • MAP System
    • White Papers
    • Videos & Interviews
    • Big Money Podcast
  • Profit with MAP
  • About
    • About MAP
    • MAP Team
    • MAP System
    • MAP Products
    • Big Money Index
  • Members
    • Get Started With MAP
    • My MAP
    • MAP View
    • MAP Options
    • MAP Top 20 Weekly
    • MAP 50
    • Member Updates
    • Platinum Updates
    • Members Only Posts

Animal Spirits

September 3, 2020 //  by MAPsignals Staff//  12 Comments

“Wait until they get the animal spirits!”

That’s what my father-in-law told me a few years ago. We were in a bull market then, but nothing quite like this.

He was right. I’m glad I held and waited.

animal spirits

“Animal spirits” is a term that John Maynard Keynes discussed. He likened the saying to the instincts that drive human behavior.

Extreme behaviors, like now, are part of the game. Big payoffs can come when exuberance is high. In fact, growth investors like us pray for markets like this. We know it won’t last forever, but it sure is a heck of a lot of fun for those who hold outlier stocks.

And signs are pointing to froth in stocks.

Our recipe in times like these are to:

  • Stay long outlier stocks
  • Follow the Big Money

And outliers are where to be… because by now you should know our mantra: They all go up…TAGU.

But, a pullback should be on the horizon.

Big Money Sees Animal Spirits

We are now clocking 84 trading days of an overbought market. Animal spirits will do that.

And while we’ve never seen such powerful consecutive buying before, we are beginning to see some signs of exuberance under the surface.

Where Big Money goes the market follows.

So naturally with all of this Big Money inflow for so long, our readers want to know when it’s going to change. We’ve had people reach out, “make sure to let me know once the market magician exits the stage!” Of course, we will!

To drive home the exuberance we see now, let’s rewind back to June. Back then we saw record breaking buying. Below, you can see the big green buying circled to the right:

Big Money exuberance

That big circle indicated unsustainable buying in stocks. We got cautious. A week later, the market had a 6% pullback… in a day. The record buying in stocks and ETFs set then, still stands. The animal spirits were howling loud and clear.

Since then, we haven’t logged any monster days of buying.

But, that all changed this morning. Check out the big green stick from yesterday – clearly someone was buying stocks:

frothy buying in stocks

And that’s not all the green we saw. Check out the ETF buys:

big ETF buying

This is new data folks. Buying like this tends to point to near-term peaks. You can see that via the red arrows. Usually the big green prefaces a cool-down.

Now, let’s look at the Big Money Index. Obviously, it is in a slow-moving downtrend. While market indexes power higher, the BMI sputters. We pointed this out last week. And even with the big market rally, it’s still muted:

big money index animal spirits

So here we have it – signs of extremes are beginning to show up. A falling BMI and unsustainable buying are points of concern.

Data is appearing to shift.

And while 2020 has been a year of supply and demand 101, that’s what makes MAPsignals so special. You don’t need a narrative other than to follow the Big Money.

What drives markets down 40% in weeks? Animal spirits.

What rips markets +50% months later? Animal spirits.

But, outlier stocks shine year after year.

Outlier Stocks Shine

For years we’ve believed that the secret to beating the market revolved around a handful of stocks. It’s actually been proven. And what we are witnessing now is a relentless thrust of Big Money into stocks.

And while animal spirits can lift all stocks, the outliers are where you want to put your focus. Those are going to be the ones that will hang around year after year.

Many of these stocks are household names for people…like Apple Inc. and Amazon.com Inc. They are also the kind of stocks found on the MAP 20 list each week.

This is our own personal dedicated pond to fish in.

It’s the list that found stocks like NVIDIA Corp. (NVDA) back in 2015 and SolarEdge Technologies, Inc. (SEDG) in 2017…and countless others.

Each of these green bars are the times that SEDG was a Top 20 stock. Let’s just say that it’s got somewhere to be…UP:

solaredge is an outlier
MAPsignals, End of day data sourced from Tiingo.com

When it’s time to get cautious – the Big Money will howl with huge unsustainable buying. It always does.

It looks like the animal spirits have come.

Listen to what they are saying: a pullback is near, but nonetheless outliers will forever guide you on your path forward.

Spread the word!

Category: All, Big Money Insights Weekly, Special Reports

Previous Post: «make 'em take 'em Make ’em Take ’em
Next Post: Summer’s Over summer's over»

Reader Interactions

Comments

  1. Mark

    September 3, 2020 at 11:41 am

    So is today the beginning of THE pullback or just a head fake?

    Reply
    • MAPsignals Staff

      September 3, 2020 at 11:51 am

      Great question. Signs point to a much needed pullback.

      The next few days of data will be telling. This is when it gets fun.

      Reply
      • Terrence

        September 3, 2020 at 12:05 pm

        If the market has been overbought for 84 days won’t it take a while for the market to pull back.

        Reply
        • MAPsignals Staff

          September 3, 2020 at 12:28 pm

          It may take a while – it may not.

          The important thing is to take in all of the clues and make a scientific estimate.

          The pullback in June lasted literally a day. As more data comes in, the near-term picture should become clearer.

          Reply
          • Janice

            September 3, 2020 at 2:07 pm

            A healthy pullback or reality bites? Can a one day make trend? Buy, sell, stay confused?

          • MAPsignals Staff

            September 3, 2020 at 3:02 pm

            One day doesn’t make a trend.

            But, looking back at prior instances similar is helpful.

            Markets need a pullback. The cash on the sidelines has been ice cold for months.

          • Janice

            September 3, 2020 at 3:16 pm

            Looks like bears growling. Vix and volume on the upside. Punch bowl has turned sour. Out and away is the call. Run!

  2. Amit

    September 4, 2020 at 2:15 am

    Why are all the comments moderated?

    Reply
    • MAPsignals Staff

      September 4, 2020 at 8:00 am

      There are 2 reasons:

      The first is privacy. The 2nd is spam control.

      Reply
  3. Vincent

    September 4, 2020 at 10:18 am

    Blood bath continues. It’s a bubble market but we are in the denying phase. Tape doesn’t lie. Lighten up!

    Reply
  4. yesbeetheind

    September 11, 2020 at 9:39 pm

    Could you please define ‘buy’ and ‘sell’ as used in this article?
    (every buy has a corresponding sell, doesnt it. So what do you mean by buy/sell).

    Reply
    • MAPsignals Staff

      September 12, 2020 at 7:00 am

      When we look for buy and sell signals, the goal is to find “natural” buyers and sellers.

      Natural means it is a real order. Obviously this is our scientific guess.

      Here is a hypothetical example: If Fidelity has an order to buy 7,000,000 XYZ shares over the day and the stock typically trades 10,000,000 shares per day, which way do you think XYZ is gonna go? All things being equal, shares will increase in value because of the demand.

      Now, market-makers will be selling shares against those buy orders. But, the market maker is not a natural seller, thus the short position created still needs to be covered (bought back). So, even though there is a seller for each transaction, if it isn’t a “real” seller – then they ultimately become buyers in the end.

      We hope this helps because we’ve heard this question asked before.

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Get Big Money Insights for FREE

Want to know where the Big Money is headed?

Just enter your email address below. You'll get our FREE NEWSLETTER sent directly to your inbox. 

 We call it Big Money Insights... It’s your weekly sneak peek at the powerful market-moving forces that are hidden from 99% of investors.

Categories

  • All
  • Big Money Insights Weekly
  • Big Money Series
  • MAP 50
  • MAP In The Media
  • Members Only
  • Performance
  • Podcast
  • Special Reports
  • Stocks
  • Videos & Interviews
  • White Papers

Archives

  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018

Footer

© 2020 Mapsignals.com

  • Home
  • Contact & Disclaimer
  • Privacy Policy
  • Terms & Conditions
  • Cookie Policy (US)
  • FAQ

Copyright © 2021 · Mai Law Pro on Genesis Framework · WordPress · Log in