Both Sides of the Coin Say It’s Time to Buy These Stocks Being a data fanatic (and yes, a data nerd), I spent part of my Thanksgiving weekend looking at my Quantum Edge system data from a slightly different perspective. I started thinking about it after the strong November, which was the best month of the year for the Dow and the S&P 500. Both indexes ended the month at all-time closing highs on Friday, and the S&P 500 and NASDAQ Composite hit new intraday highs today. Investors clearly have an appetite for stocks, especially since the election. The chart below shows the Big Money buy signals from the past year, and you can see the huge green bars since the election. 
Source: MAPsignals.com The bars faded last week in low-volume holiday trading, but the trend remains in place. My proprietary Big Money Index finished November at 65, which means that 65% of all unusual activity signals were buys. That’s basically two buy signals for every sell signal, which is strong. But the more data and analysis the better, so I decided to take it a little further by analyzing selling by itself. Buying is critical, but so, too, is selling relative to all signals in our data. It helps us spot any destruction going on under the surface. I calculated the 25-day moving average of sell signals currently, and then I went back to determine the historical average. I found the 34-year average (going back to the beginning of my data in 1990) is 39%. That’s consistent with my own observations through the years. The current 25-day average is 32%, and it’s falling. That historically good for stocks. Here’s a visual representation of the last five years of selling data. The line is the 25-day average of sells, and the closer it gets to zero, the higher stocks go. (The shaded area is the SPY tracking ETF. 
This gives us the other side of the coin. We saw earlier that money is flowing into stocks, and this tells us that money is not flowing out. Higher-than-average buying accompanied by lower-than-average selling is undeniably bullish. This is just another analysis to go along with other data pointing to a strong finish to 2024. We are right in the middle of the seasonally strongest time of the year from October through April. Stocks typically bounce after elections. When any uncertainty of the outcome is alleviated, Big Money tends to get back to work investing. And perhaps most important of all, interest rates continue falling while economic data remains encouraging. Despite plenty of talking heads muddying the waters with speculation about what could happen, we should be focused on what is happening. And right now, the setup looks great for stocks. Smaller companies remain in prime position to benefit. In fact, the Russell 2000 Index of small-cap stocks gained a blistering 10.8% in November. Those are the stocks we focus on in Quantum Edge Pro, and they kept pace with a 10.2% average gain of their own. Six of our stocks (nearly a quarter of the portfolio) gained more than 20% in November, and the average three Big Money buy signals in the month. More good news: Recent market strength has vaulted more stocks into the optimum buy zone with Quantum Scores between 70 and 85. Some that weren’t making the cut before now post scores that give us the high probability of profits that we look for. I’m analyzing potential new opportunities that I expect to recommend soon. As you spend money shopping for the holidays, consider putting some of your money into stocks as well. You may end up paying for some of those purchases in the coming months, but over time the rewards stand to be much bigger and more impactful. As always, the primo opportunities are stocks with superior fundamentals, strong technicals, and Big Money flowing in. For a little extra potential juice, consider smaller companies that meet those same criteria. Talk soon,  Jason Bodner
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