“Houston, this is ground control.
We’re ready to launch.”
Mission planning before a rocket launch is extensive. Astronaut training is extremely in depth. Years of preparation by astronauts, engineers, and everyone else involved is a given.
The goal is to get all parties involved in sync. Not only do they prepare for perfection, but also for as many unforeseen events as they can.
Before the all-systems-go signal is finally triggered, a launch status check must be performed. Systems must be tested before the OK is given for spaceflight. Flight controllers give the signal when a rocket is ready to launch.
And the same goes for stocks, too. Settings need to be just right before they are ready to launch.
Preparing for spaceflight isn’t based on gut or emotion. It’s based on science and data.
For MAPsignals, data is our ground control, and we see many positives under the surface of the market. Right now, we see an imminent liftoff for beaten down growth stocks…the high-quality kind.
Ground control says high-quality growth stocks are ready to launch.
3… Big Money Index Ready to Launch
Let’s start the countdown from the top. The Big Money Index is quiet.
You can see how it’s been rangebound for weeks:
This is a critical step for mission control. The BMI gauges weather conditions for stocks. Clear skies are ideal for launches… and the BMI says the clouds are starting to part.
Fears of rising rates have hampered growth stocks specifically for weeks. As the 10Y treasury yield climbs, NASDAQ stocks feel the pressure.
The logic goes like this: Higher rates mean higher costs to fund growth, which impacts the bottom lines of capital-intensive growth companies.
That headwind on the NASDAQ has caused the BMI to fall out of overbought.
That’s not a bad thing. Pullbacks are opportunities to buy great stocks on sale. That’s what we’ve been doing at our firm. How better to prep for a growth launch, than stocking up on supplies?
Now, let’s look over our breadth gauge.
2… Selling In Stocks Slows
Momentum factors into any moving body whether it be a rocket or a stock. It also works the other way too, when it drags on underperforming sectors.
Groups like Technology, Healthcare, Utilities, & Staples have been under pressure recently. But, that’s suddenly changing. Below is our Big Money Stock Buys & Sells chart.
Green bars are buyers. Red sticks are sellers. The bottom line is this: Selling in stocks has abruptly vanished:
1… Selling In ETFs Slows
Before stocks can launch, selling needs to slow. We are now seeing that theme happening with ETFs, too.
Below is our Big Money ETF Buys & Sells chart. Our radar is signaling clear skies in the coming weeks:
It may come as a surprise, but our 3-tiered juice-meter indicates blastoff is likely ahead.
That’s right. Like we said last week in our post Feel The Fear, through the lens of our data- finding a bearish narrative is hard. When that’s the case and great stocks pull back, we go shopping for outliers.
Those are the best of the best.
Look, there’s fluff in the system, no doubt about it. That’s why focusing on quality is paramount.
If you are a platinum subscriber, keep an eye out for a video update soon. We’ll go over our recent Top 20 names and what we are focusing on.
Here’s the bottom line: We believe high-quality growth stocks are ready to launch. These are focus names found in our research…
Rising rates can only hold back amazing companies for so long. Eventually the momentum of smart investors takes them where they’re meant to be: higher.
The Trade Desk, Inc. (TTD) is a great example of Big Money momentum. Since 2017, you can see the green stairway to heaven.
That’s every time The Trade Desk appeared on our Top 20 list:
That’s the type of outlier performance we play for.
The three most powerful human emotions are love, greed, and fear. Love unfortunately has no place in investing. Falling in love with a stock can be more costly than a divorce.
That leaves greed and fear which power stock markets around the globe. Greed of course can lead to excess and overconfidence. We’ve all heard the story of Icarus brazenly flying too close to the sun. It melted his wings and down he went…
Evolution says fear kept us safe as early humans. But in modern-day investing it can be costly too… opportunity cost. The crowd always needs something to fear… China trade, Presidential elections, interest rates, taxes, viruses, trigger-happy dictators… and on and on.
But from the ashes of fear, history says outliers rise like phoenixes.
So, while growth fears swirl, just know that high-quality juice stocks won’t be kept down for long.
And while TTD will forever be in the MAPsignals juice-rocket museum, the next crop of outlier stocks are ready to launch.
Look, narratives and headlines change fast. It’s hard to keep up. That’s why we use data as our framework. It doesn’t lie or manipulate. It just is.
Our data is signaling a slowdown in selling. It says: start planning now.
Eventually it’ll be go time.
Ready to launch.
3…
2..
1.
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.
Feel The Fear
My take is that big money is pilling up in financials and shorting various flavors of interest rate sensitive instruments.
It appears that the Punchbowl has been temporarily shelved. Houston, we may have a problem with continued rising rates.
As they say, “in the long run we are all dead” but “hope springs eternal!”
Nice thoughts, Joe.
It’s a big ole rotation. They happen from time to time.
Wow! Selling certainly down. However, the Shiller (CAPE) ratio is second highest on record. With the secondary 10 year treasury screaming higher, corporate bonds moving opposite to any potential stock increase, while prescious metals lower, gasoline/diesil higher; there’s enough confusion in markets to suggest money being stored in cash.
Add political uncertainty and me thinks safety is waiting for another shoe to drop. It can go either way on stocks short term. I’m still in the safety cash net. April has been pretty volitile last few years…