Stocks Can Rally in 2022
2021 is over.
It’s time to look forward and get bullish.
Today I’ll show you why stocks can rally in 2022.
Continual market rotations left many investors scratching their heads. Buying dips worked in a big way.
I’m going to keep it short and sweet today. The stage is setting up for a rally in 2022. And coming to this conclusion isn’t based on Omicron headlines, inflation jitters, or Fed tapering worries.
It’s based on data. Watching the flow of money in the stock market tells me all I need to know:
- Big Money Index is rising
- Stock selling is slowing
- Those together = stocks can rally in 2022
If you’re looking for doom and gloom, turn away now. If you’re looking for juice, follow along ????. I’ll show you why I’m bullish heading into the New Year…and why January tends to uncover monster winning stocks.
Let’s do this.
Big Money Index Rips to 2-Week High
If you’re new to MAPsignals, we begin with a 30,000-foot view of the market. It’s important to get a gauge on the overall health of stocks.
The easiest way to see that is to look at the Big Money Index: It measures big buying and selling in stocks. The direction of the BMI is what’s important. When it heads higher from a trough, markets tend to rip.
That’s what’s happening now. It suggests that stocks can rally in 2022:
I’ve circled what’s important: the BMI is at a 2-week high. This is because selling in small-caps has vanished. That’s been the pain point for the market recently.
Twists and turns have plagued sectors for most of the year, keeping us out of overbought territory for months. Notice how the BMI hasn’t triggered overbought (red line above) for 10+ months.
To me, that means there’s ample runway for names to ramp from here…stocks can rally in 2022.
Now, let’s keep working our way down. Just a few short weeks ago the Big Money Index was nosediving. That’s not the case today.
Stock pain ultimately turns to gain. That’s right, selling slows and buying grows. It’s supply and demand 101. Below you can see what I mean.
Here are the daily buys and sells in stocks. Notice how selling has dried up substantially.
Measuring big buying and selling on thousands of stocks each day reveals patterns. It’s similar to flowing waves in the ocean.
Here are the flowing phases of Big Money:
- Huge buying and little selling
- Buying slows and selling grows
- Buying is gone, sellers are in control
- Selling slows, and buying grows
Below is a diagram. I see markets as exiting phase 4. Strap in. Stocks can rally in 2022:
I love this diagram because it’s forward looking.
Speaking of looking forward – let’s now go over why I’m really excited for January.
Stocks Can Rally In 2022
Alright now it’s time for me to show off the power of the MAPsignals process. We love data. Ranking thousands of stocks is how you find mega winners.
And some of our biggest winning stocks ever show up in January. That’s likely due to portfolio managers gunning for alpha at the beginning of the year.
Either way, following the best stocks seeing Big Money is what we excel at! Our weekly Top 20 report showcases our top ranked stocks each week. This is where we find outliers.
It found Lululemon Athletica (LULU) in January 2015:
Disclosure: Luke holds long positions in LULU in personal and managed accounts.
That’s a 535% rally since being top ranked on January 13th, 2015. But look how it kept appearing 52 times! That’s mega juice!
In January 2016, our process found a little stock named Arista Networks (ANET). Since January 5th, 2016 it’s rallied 644%:
And as you can see it kept reappearing…48 times since.
But what about 2017 you ask? Check out NVIDIA Corp (NVDA) profiled on January 3rd, 2017. This may be the GOAT stock:
It’s gained 1091% since then and held a top ranked spot a mind-numbing 50Xs since.
2018 uncovered Intuit, Inc. (INTU):
Disclosure: Luke holds long positions in INTU in managed accounts.
Let’s do one more for good measure. 2019 found Keysight Technologies (KEYS). It’s tripped since being profiled January 2019:
That’s a highlight reel for ya! January tends to find all-star stocks. Let me say it again, stocks can rally in 2022.
If you’re looking to take your investing to the next level, consider joining MAPsignals. Start the New Year by following the Big Money with us!
Let’s wrap this up.
Here’s the bottom line: The data suggests liftoff is around the corner. The Big Money Index is gaining and stock selling has evaporated.
If history is any guide, outlier stocks get a boost in January…and that’s exciting.
Don’t listen to the bears. Just smile knowing that stocks can rally in 2022. I am ????
***ALSO, I will be presenting virtually with Wealth365 the week of January 17-22nd: Finding the Biggest Winning Stocks.
It’s totally free, so click the image below and reserve your spot!
Finally, we just released an awesome video: Best ETFs for 2022. Jason is the data master, so check it out!
There’s a free giveaway, too. But you have to watch to find out!
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