One question has perplexed investors since the beginning of markets.
Will stocks go back up? If history is any guide, the answer is yes. If data is any guide, the near-term answer is also yes.
Look, stocks have been twisting and turning for the better part of the year. Rotations seem to never stop. It’s been frustrating to say the least.
What goes up one week goes down the next and vice versa.
But guess what? I bring good news.
As I’ll show you, money is beginning to flow back into stocks. And typically, when that happens, they crank higher in a big way.
At MAPsignals, we use data to guide us: specifically Big Money data. We learned long ago that getting on the right side of that flow, puts you in the driver’s seat. You’ll be in a better position to guess the market’s next move.
It’s one thing to ask when will stocks go back up…it’s another to be informed by data.
People ask questions. Data reveals answers.
Will stocks go back up? They will. Now let’s look at data pointing to more upside for stocks.
Big Money Index Shows Positive Trend
Bears will tell you the market’s in a bad spot. They’ll point to Technology weakness, high inflation, Fed tapering…and the list goes on and on.
But, our data paints a different picture. The Big Money Index actually shows strength under the surface of the market. Below you’ll see that trend. The BMI is picking up as Big Money flows into stocks:
I’ve circled the latest climb and in October. Will stocks go back up? The BMI is pointing to yes. Let’s keep going because there’s more data-driven evidence.
Under the hood of the BMI are daily buys and sells of stocks. When buying increases and selling decreases, get bullish! That’s what’s happening now.
I’ve drawn an arrow when this previously happened. Look close and you’ll see that JUICE flowed soon after:
So, will stocks go back up? The buys and sells of stocks point to yes. But let’s go one step deeper. I’m going to show you which areas are powering the market higher…and more importantly which area is set to ramp.
Energy and Financial stocks are seeing the most buying. These are the leaders right now. Just looking at the sector buys and sells charts below makes it clear as day.
But I want you to understand something about supply and demand. Overly extreme buying tends to lead to a pullback. And extreme selling tends to lead to a rally. So while Energy and Financials are beaming with buys, the best time to buy them was weeks ago.
Up first is Energy:
Notice how there’s big buying right now. But also notice how the group pulls back once the buying slows. More importantly look at the green circles. That’s when the big bad bears sell stocks. It’s often a great time to buy…demand for stocks eventually pushes them higher.
The same patterns emerge like clockwork.
So, now that we know where the money has been flowing, let’s drill down where the biggest opportunity is.
Will Stocks Go Back Up
Many know that Technology stocks have suffered mightily recently. The selling in the market has mostly been concentrated there. Year-to-date, the technology sector is down 2.95% (XLK ETF). But could that be opportunity?
If we use the same framework as above, good news begins to emerge. Take a look:
Looking at this chart there’s a clear pattern. After big chunky sell days (red bars), buyers tend to slowly emerge. The green circles are where the juice starts…and it looks like selling is drying up recently.
So I have to ask that silly question again: Will stocks go back up? History says yes!
Don’t get bogged down with headlines that change from day to day. Look to data for clues. As I’ve said many times before, don’t follow the news, follow the big money. The next moves the market are often plotted in the footprints of institutional investors. Our goal is to track it, follow it, and profit from it!
Now, it’s time to put the power of our data in your hands.
Finding The Biggest Winning Stocks
Knowing the overall picture of the market is great. But, my passion lies in finding outlier stocks. Those are the ones that defy gravity and make most of the gains in the market.
Inside of all that data I showed above are actual stocks. The best ones keep getting bought month after month.
Here’s an example of a winner in Financials, Charles Schwab (SCHW):
Look how buys tend to lead to more buys. That’s our signal showing the demand for SCHW the past year. We’ve learned to not fight that trend!
So, while some areas of the market show weakness, just know there’s plenty of green right now, too. You just may need a map to help you find them!
Will stocks go back up? Nothing in finance is certain…but the data points to a resounding yes!
Let’s wrap this up.
Here’s the bottom line: Many are asking the same question every time the market comes under pressure: Will stocks go back up?
History says yes. But, looking above, it’s probably coming soon.
Now, as a final reminder. Next Tuesday at 11ET, I’ll be presenting the MAPsignals process virtually: Finding the Biggest Winning Stocks.
Not only will I be going over where I see the most opportunity for investors, but I’ll also be showing off new functionality coming soon for our portal.
Click below to sign up and I’ll see you there!
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