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

Construction Zone

July 2, 2020 //  by Lucas Downey//  9 Comments

We’ve all seen “SLOW – CONSTRUCTION ZONE” signs while we’re cruising along the highway.

They tell us to slow down and watch out for workers.

It’s the right thing to do to be safe for both the drivers and the road crew. But there’s also a stiff penalty if you don’t. There are plenty of reminders of maybe a $200 fine for speeding in a work zone.

Of course, we need plenty of warning, because slowing down from 70 mph to 15 isn’t safe to do instantly either. Signs appear well in advance of the actual road work. That cool down period gives you time to adjust, adapt, and react to the new surroundings.

Financial markets aren’t just numbers on a screen. At heart, they are expressions of the individuals behind the buttons placing buy and sell orders. Even if machines do much of the trading these days, machines were programmed by people.

So, it’s logical that markets face congestion zones too. It’s part of the game.

Unfortunately, no one is holding up a sign in your brokerage account saying “SLOW DOWN! CONGESTION UP AHEAD.” Lacking warnings like this can inflict nasty fines on your portfolio.

Yet, at Mapsignals, we get alerts well in advance of “construction zone” signs. We see the market brake lights up ahead…so, we adjust. We are devoted to sniffing out big money, and when they act. It’s usually well in advance of moves up ahead. It stands to reason: big money needs to invest with an edge over the little guys. But they don’t keep that edge by telegraphing it to the world.

You need a systematic way to identify their silent movements anticipating market bends in the road. That’s where we come in.

Mapsignals’ data has been warning investors who listen: “Slow down, congestion ahead. Penalties are increased for speeding in a construction zone.” Let’s look at what they really say…

construction zone

Big Money Index Hits Market Construction Zone

It should come as no surprise that the Big Money Index is falling. For nearly a month, we’ve highlighted mega-extremes in our data. On June 4th, Record Breakers spoke of massive buying across the board in stocks and ETFs.

We said “buying like that rarely lasts”- and we were right.

Since that post the S&P 500 (SPY ETF) returned -.09% including a deeper pullback and subsequent recovery. Compare that to the prior ~2 months’ return:

  • 5/4 – 6/4 SPY returned +9.8%
  • 4/4 – 5/4 SPY returned +7.06%

June 4th is essentially when we started seeing the construction cones ahead. But since that Record Breakers post, our data has changed significantly.

Look how the Big Money Index has been falling recently:

big money index is falling

As a reminder, the BMI falls for 2 reasons:

  1. Buying in stocks slows down
  2. Selling in stocks picks up

This is important because it sets the stage for what comes next – the market construction zone.

We look at our data each day. And for the past 4 weeks it has caused us to slow down and rubberneck.

Big Money traffic has clearly been slowing down.

Sector Buying In Stocks Hits A Speed Bump

Three weeks ago we published, Initial Descent. At the time, our data waved a caution flag. It was nearly impossible for us to be bullish interpreting our data.

Let’s replay what the market did right after that post. The S&P 500 (SPY ETF) had 3 ugly selloffs:

  • June 11th, SPY fell -5.76%
  • June 23rd, SPY fell -2.55%
  • June 25th, SPY -2.38%

That is what a market construction zone looks like: 5 lanes of traffic merged into one.

Another place to look is at the velocity of stock buying. We showed you extremes on June 11th for some sectors. Pay attention to how buying suddenly bottle-necked.

Below we monitor buying velocity in 3 sectors: Technology, Materials, & Discretionary.

When the green line increases, the 25-day moving average of buys is increasing. The past few weeks show deceleration:

Look- this clearly shows big buying is slowing down. But keep in mind that indexes can and often do continue to power higher.

This is especially true for indices that are market-cap weighted, like the S&P 500 and NASDAQ 100. This means that a handful of stocks are responsible for nearly all of the gains.

Due to all of this data, we at Mapsignals slowed down. We warned of buying at these levels, and suggested taking profits and readying cash for an imminent pullback. It may take a while, but until our data signals a change, we believe we’re still in the market construction zone.

But, remember: we also believe that outlier stocks go up over time regardless of market fluctuations.

So what about outliers?

Funny you should ask!

Outlier Stocks – TAGU

We have a little mantra at Mapsignals. It describes the best stocks out there. We realized a decade and a half ago, while sitting on trading desks, that regardless of what markets do, great stocks have one thing in common. They all go up. (Historically speaking at least.)

The backdrop could be a terrorist attack. It could be a housing crisis, political scandal, trade uncertainty, insolvent countries, or whatever other doom scenarios the headlines cook up. I mean, bring on a pandemic that stops the world in its tracks, and you’ll still have stocks that knock it out of the park.

The mantra is “TAGU” which is an acronym for:“They all go up.” (let us know if you’re interested in a TAGU tee-shirt. With enough interest we’ll get some made.)

They means outliers. Regardless of crashes, doom-and-gloom headlines, fear, or euphoria – the bottom line is this: the best stocks make you rich over the long-term because TAGU.

We started our firm 6 years ago to find those stocks. It was born out of nearly 15 years of research prior. While not all stocks go up, obviously there are a small number of them that keep rising over the years.

It’s a nice story to make you feel good, but hey- we’re all about data here at Mapsignals. Nothing speaks louder than black and white numbers…

So, how did Mapsignals perform with our stock picks for the first 6 months of 2020?

We’ll let you be the judge…

As of the 6/30 closing prices, here are the returns for all weekly picks from the MAP View:

*hypothetical performance that may or may not be possible to achieve

If you’re dying to know the actual stocks we picked, those are for our members only. Members get those stocks each week at all levels of subscription. You can learn more about that cool report and membership here.

We’re not your usual stock research people. We love this stuff and find it immensely fun- not stuffy. So performance like that is what we call juice… when our stock picks more than double the market- that’s juice!

It’s so juicy in fact, we are thinking of renaming our boring BLOG to JUICE BAR. Why? Because that’s where you get the juice! (We’re half serious…feedback welcomed…)

OK, taking a breath…, let’s take it a step further.

Those were all the stock picks for the first six months. But what about our best stocks?

Now, check out how that basket of stocks did the first half of 2020:

*hypothetical performance that may or may not be possible to achieve

Our 6-month strategy basket clocked +8.52% vs -3.18% for SPX. Guys and gals- that’s outperforming the market by 3.7 times…

Mic drop.

Here’s the bottom line: those desperate to time the market should pay attention to big money signals. Slowdown when there’s construction up ahead.

But if you’re in the best stocks, you really don’t need to worry long term. Why? Because TAGU- that’s why.

“They all go up.” Outliers tend to keep making new highs year after year. It’s what they do.

We think we’ll be right years from now when we say TAGU.

In fact, we’re betting on it.

Maybe you will too… in your faded TAGU tee shirt. And when someone asks you what it means, you can just wink and smile, and say…

“They All Go Up.”

Lucas Downey
Lucas Downey

Lucas is co-founder of MAPsignals. His full bio can be found here.
Prior to MAP, he was Head of ETF Sales at Cantor Fitzgerald & SVP of Derivatives at Jefferies, LLC.

Spread the word!

Category: All, Big Money Insights Weekly, Performance, Special Reports

Previous Post: « Most Frequent Top 20 First Half 2020
Next Post: Winner Take All »

Reader Interactions

Comments

  1. Jason

    July 2, 2020 at 12:28 pm

    Put me down for some shirts!

    Reply
  2. zarir

    July 2, 2020 at 1:15 pm

    You mention and show that MAP had a 11.84% returns as of 6/30. IS this number a weekly Return. Meaning on avg. you are getting a 11.84% weekly return? Please let me know.

    Reply
    • Mapsignals Staff

      July 2, 2020 at 1:21 pm

      Hey Zarir –

      The returns are calculated as of the date of the report and hypothetically held until 6/30 close.

      So, it is not a weekly return – it’s the average performance of all weekly picks in the 1st half.

      Reply
    • Chris

      July 2, 2020 at 6:51 pm

      Would love a TAGU T- shirt if you can spare one.
      Many thanks
      Chris

      Reply
  3. Ari

    July 2, 2020 at 1:35 pm

    So has the “construction” finished despite all the overbought indicators you guys have? Are we most likely not going to get any pullback years from now? Are we suddenly turn from risk off to risk on mode just like that?

    Reply
    • Mapsignals Staff

      July 2, 2020 at 1:46 pm

      That’s for you to ultimately decide.

      BUT, if you are asking our thoughts on a couple years out, I’ll give it to you.

      Odds heavily favor a good pullback or 2 in the years ahead. Likely much sooner than years 🙂

      Reply
  4. MM

    July 3, 2020 at 2:17 am

    So assume this current construction phase, does it means we are currently on the phase 3 out of 4? based on the 1-2-3-4 wave in the market? (refer to the previous article wrote on Master of Misdirection)
    Currently bit confused on where the direction this market is heading… seems sideways and choppy and pushing back up… Correct me if I am wrong.

    Reply
    • Mapsignals Staff

      July 3, 2020 at 7:46 am

      Phase 2 is when we are near peaks and buying slows. That is where we are. Markets have been sideways and choppy the last month.

      When selling starts to grow from here we begin phase 3. We can stay in a phase for a while. Phase 1 lasted for a few months.

      Selling has certainly picked up as we’ve highlighted. So, it’s a slow grind at phase 2 as we approach phase 3.

      Reply
  5. NN

    August 9, 2020 at 1:02 am

    Had a few questions. What is your e-mail address.

    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.

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Categories

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

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • 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

Follow us on Twitter

MAPsignals Follow 1,434 1,061

MAPsignals is a data platform that tracks institutional money flows in stocks and ETFs. Sign up for free insights here: https://t.co/SaAVHjKC9J

mapsignals
mapsignals avatar; MAPsignals @mapsignals ·
57m 1621476848990359552

Pendulum has swung

Helene Meisler @hmeisler

Highest volume for the QQQs since 12/13

Reply on Twitter 1621476848990359552 Retweet on Twitter 1621476848990359552 0 Like on Twitter 1621476848990359552 0 Twitter 1621476848990359552
Load More...

Footer

© 2021 Mapsignals.com

  • Home
  • Contact & Disclaimer
  • Privacy Policy
  • Terms & Conditions
  • Opt-out preferences
  • FAQ

Copyright © 2023 · Mai Law Pro on Genesis Framework · WordPress · Log in

✕
What Happened to Risk Assets White Paper is Here

Get your copy here and take a journey through our thoughts on margin and leverage.

Enter your email address below and 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.

MAPsignals
Manage Cookie Consent
We use cookies to optimize our website and our service.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}