Big Money Index is Breaking Out

Big Money Index is Breaking Out

Focus on the bad news and you’ll find it.

Focus on the good news and you’ll see opportunity. The Big Money Index is breaking out.

Big Money Index is Breaking Out

There’s a lot of bad news out there. Literally every time I open social media, I’m bombarded with messages about how stocks are doomed. Yes, inflation is high and interest rates are climbing fast. I get it.

But, I’m an optimist. I choose to search for positive narratives. And as I’ll show you, there’s reason for hope.

You see, I’ve always found it to be more proactive following data rather than news, especially when it tells a different story than the headlines du jour.

Today, you’ll see a narrative of positivity. There’s a lot of buying going on. And hopefully, you’ll note the opportunity that I’m seeing.

Big Money Index is Breaking Out

Monster selloffs are often a fertile hunting ground for stock buyers. Just a few short weeks ago everything looked grim. The stock market selloff was off the charts.

My message then was to hang in there and not give up. Today we can see the Big Money Index not only took out it’s 2022 high, it’s at levels not seen since November:

Highest BMI since November | Big Money Index

It just pierced 65% – a level last seen on November 22nd. And you may be curious what’s causing this huge ramp in the BMI. Well, take a look at how the immense selling has slowed.

big money stock buys and sells SPY

Selling effectively stopped. My educated guess is that forced selling and de-risking came to a halt. That of course, planted the seeds for stocks to bounce.

And what’s really cool about data, is you can witness shifts taking place in real time. For months, the buying that was pushing the BMI higher was cyclical in nature: Energy, Commodity, and Machinery stocks.

But this week is revealing a broadening of the rally. And this next chart surprised me when I opened the portal on Wednesday morning. Real Estate stocks saw 25% of their universe bought.

That’s massive:

real estate vs XLRE | Big Money Signals

Out of nowhere, 32 Real Estate stocks saw wicked buying. In a high inflationary environment, Real Estate can be a great allocation due to appreciation of real assets. High yields are also attractive.

But there’s fresh buying happening in healthcare stocks as well.

health care vs XLV | Big Money Signals

Big non-cyclical Pharma stocks are seeing the juice! This further shows a broadening out of buying in the market. That’s a welcome change if you ask me.

These fresh green signals are why the Big Money Index is breaking out. Get happy! Now, let’s look at 2 other positive signs in our data.

First, Technology as a sector is gaining ground. At the March 7th low, the Technology group was ranked 10th in terms of overall MAP Score. Today it’s moved to 8th:

That jump was single handedly due to positive technical action. Again, positives are there for stocks if you want to see them.

And finally, there’s one other major datapoint that’s jumping out at me: outlier stocks are beginning to bounce.

That’s right, some of the best stocks in our data are getting love again. A great way to see that is from our monthly MAP 50 report. These are the 50 most frequent stocks found on our weekly Top 20 report. Look how March’s 50 stocks absolutely trounced the S&P 500 (SPY ETF):

MAP 50 March | Map Portfolio vs SPY

Many of these 50 stocks are technology names. After months of relentless selling in growth and tech, this is a welcome change. And it further explains why the Big Money Index is breaking out.

Let’s wrap up:

Here’s the bottom line: There are positive developments in the stock market. New groups are seeing fresh buying. Big Money data helps bring that information to you.

I see the beginnings of opportunity. What about you?

***As a reminder, Jason is giving a presentation on Tuesday, The Bear Market Guide to Picking Stocks. If you want to learn more about how we use MAPsignals data in a challenging market, tune in. It’s free!

And lastly, my latest video is out: Best Oversold Stocks To Buy for April 2022. I use our data to help find long-term opportunities.

Always remember that the process is more important than the picks.

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