Big Money Is On the Move as this One-Two Punch Cleared Stocks for Liftoff It’s been one heck of a week with a presidential election and an interest rate cut – two market-moving events within days of each other. And move the market did, especially after the election. Quite honestly, I really dislike politics. I try not to get involved. But I must when it comes to understanding the impact on our investments. Over the last few months, I’ve written about how stocks were primed to rise into the end of the year no matter which candidate won. The only real questions were timing and where Big Money would flow. The timing question was answered almost immediately after the election. We knew by early Wednesday morning that Donald Trump had won both the popular vote and the electoral college. Any uncertainty about a drawn-out vote count, a contested election, or questions of fraud vanished. The S&P 500 and NASDAQ soared, up 4.1% and 2.7%, respectively. The small-cap heavy Russell 2000 index blasted even more – 5.8% higher, a monstrous move. I’ve been forecasting it all along, but I see a lot more where that came from. This rally could have both speed and endurance, making it a prime opportunity to grow your wealth. Multiple Factors Signal Higher Prices Again, I’m not political, but it’s important to note that one party controlling Congress and the White House is bullish. In particular, Republicans controlling the presidency, Senate, and House is particularly good for stocks going all the way back to the 1930s. In those prior “red sweeps,” stocks flew higher one, three, six, 12, and 24 months later. In addition, interest rates will continue to fall. The Federal Reserve cut another quarter-point today, making it three-quarters of a point in total since September. Politics again aside, whether you love or loathe Trump, he is good for stocks because he generally favors lower taxes, is pro small business, pro real estate, and wants less regulation. He will also urge the Fed to keep lowering rates – perhaps even faster than currently. Lower rates will fuel a growing economy and encourage discretionary spending as well as corporate and consumer borrowing. Through it all, we need to follow the Big Money – the money that accounts for 70% to 90% of daily trading volume. This is the money that moves stocks. Invest with it and ride the wave. Invest against and get rolled over. That’s one of the Power Factors in my Quantum Edge system. I have a proprietary Big Money Index (BMI), which is the best gauge I know for tracking where the largest investors on Earth are putting their money. The BMI fell from Oct. 21 through Nov. 4, the day before the election. Stocks weakened as Big Money got a little cautious ahead of what everyone thought would be an extremely close election. Understandable. Then, I saw more Big Money buy signals (unusually large money flows) on Election Day itself – before results were known, which is interesting – and then yesterday with the most buy signals in nearly a year. Here’s what it looks like in my system: Source: MAPsignals.com My system’s Big Money buy signals – those important “green lights” above – outnumbered sell signals (the red bars) 491 to 99, which is nearly 5 buys for every 1 sell. That’s huge, and it tells me Big Money will continue charging into stocks. With the election settled and rates continuing to fall, market seasonality can now take over. And that’s great because November is the strongest and most predictable month of the year. Stocks are higher in November 73.5% of the time since 1990, with the S&P 500 averaging roughly 2.5% gains. I expect we’ll get a lift through that continues through December – the second strongest month of the year – and into 2025. Invest Alongside Big Money Everyone thinks stocks go up and down based on earnings, events, or other headlines. Those are important, yes. But what really matters is where the Big money is flowing. That ability to see where the money is flowing gives you a huge edge – the Quantum Edge. It’s like having an x-ray or MRI machine for money flows. For example, Big Money was especially hot on smaller stocks in yesterday’s shot higher. Nearly 85% of the buy signals in my system were in stocks valued at $50 billion or less. Source: MAPsignals.com Smaller stocks also benefit the most from lower interest rates, so they have a couple of strong tailwinds right now with rates falling down and a business friendly incoming president. I’m ecstatic about what’s ahead of us. This convergence of factors presents a rare opportunity you don’t want to miss. I am actively researching stocks now to recommend to my readers and to buy for myself. I don’t want to miss it either. Stocks in general are set to rise in the coming months, but stocks with the three most important Power Factors – superior fundamentals, strong technicals, and Big Money inflows – will lead the way and outperform. More than 30 years of data in my quantitative analysis system clearly shows this. That’s how it has beaten the S&P 500 7-to-1 and produced a roughly 70-% win rate. These are the stocks you want to own to make the most of the opportunity opening up before our very eyes. It’s a proven formula for making money, and it should outperform even more in a potentially big and long run for stocks. The cream always rises to the top. Talk soon, Jason Bodner Editor, Jason Bodner's Power Trends |
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