• 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

Weakness is a Buying Opportunity

September 8, 2022 //  by Lucas Downey//  Leave a Comment

The roller coaster ride for stocks continues.

Companies bob and weave as volatility remains elevated. Under the surface of the market though, signs suggest weakness is a buying opportunity.

Weakness is a Buying Opportunity

It seems everyone is bearish. Headlines are awful with high inflation, energy worries, and rising rates. The mood is sour, which is typical of September downdrafts. But I say investors should cheer up.

The latest pullback has been swift and ugly to say the least. However, there are positive signs emerging. Stay with me.

Let’s begin with the last few months of stock returns.

Stocks made lows on June 16th, then staged an epic 2-month rally. The S&P 500 gained 17.68% from the low to the recent peak on August 16th.  Talk about a rally! Interestingly, that local peak lines up exactly with our first overbought signal in well over a year, firing on August 17th.

Since then, stocks have plummeted. From August 17th through yesterday’s close, the market fell 7.44%. September’s seasonal weakness came right on time, which I referenced in our midterm election playbook.

But here’s the deal. Recent action under the surface of the market suggests that better times could be ahead in the coming weeks.

Let’s turn to the data.

Weakness is a Buying Opportunity

Over the past few months, our Big Money Index has helped guide us through a tough market terrain. Since mid-July, we’ve waded through 2 extremes: an oversold and overbought market.

From July 14th to August 17th, the wave of buying was intense. We didn’t stay in the red zone for long. Those inflows reversed in epic fashion as sellers took the helm. Below you’ll see how lockstep the BMI has been with market pivot points:

BMI ramps from oversold to overbought in a month | Big Money Index

And when you dive a bit deeper, you can see the cause of the recent pullback has been the vanishing of buyers.

Our Big Money Stock Buys and Sells chart shows this clearly. The yellow block below references the period since the BMI triggered overbought. Sellers quickly took control. When red bars increase, supply overwhelms demand and stocks fall:

Recent selloff - Big Money stock buys and sells

There’s something else about this chart that I want to draw your attention to. Tuesday’s closing low of ~$390 on the SPY (S&P 500 tracking ETF) has been visited twice before on the downside this year. Let’s compare our data now to those periods.

Below is the same chart as above except I’ve circled 3 dates. Off to the right is Tuesday’s pullback to the $390 level on SPY. The 2 other circles reference May 11th and June 10th – periods when SPY fell to nearly $390.

All things being equal, you’d expect the data to appear similar. But today’s selloff is quite different. Notice how much deeper the red bars are for May and June’s pullback.

May 11th saw 438 stocks get sold while June 10th saw 162. Tuesday only saw 99 stocks pressed hard on the downside. That points to less appetite on the sell-side, which can make way for buyers in the coming weeks.

My bet is, at these levels, weakness is a buying opportunity:

near-term relief rally | Big Money stock buys and sells

And this narrative supports my view that weakness in September, will lead to a stronger Q4.

As a reminder, in the midterm election year study, there’s a strong seasonal pattern where big investors dump stocks in September, only to bid them up in October and November.

Going back to 1990, midterm years see stocks fall -.3% on average in September but boast 2.5% gains in October and 2.4% gains in November. You can reference the study here.

Let me be clear, this recent data isn’t the all-clear signal. It simply hints at better days in the coming weeks.

Let’s wrap up.

Here’s the bottom line: September is always a time to be cautious. But keep in mind the doldrums eventually fade.

Markets have fallen hard recently, however our data is pointing to less aggressive selling now compared to prior similar pullbacks.

Use moments like now to add to high-quality stocks, with strong cashflows. Those are the ones that are going to bounce the highest once the real buyers step in. Weakness is a buying opportunity.

MAPsignals is all about finding the best stocks and we automate our top ranked stocks list every day, here, for Platinum subscribers. There are leaders out there and the Big Money process spots them.

If you’re wanting access to which stocks rank the best by sector, get started with a subscription today!

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

Previous Post: «Best Defensive Stocks to Buy for September Best Defensive Stocks to Buy for September
Next Post: When Will Growth Stocks Bottom When Will Growth Stocks Bottom»

Reader Interactions

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 1,437 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 ·
2h 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}