If you look at the headlines, then you probably think the world is going to hell in a handbasket right now.
And I can’t blame you.
There’s a raging pandemic… civil unrest across the country… a global economic meltdown… and growing tensions between China and the U.S.
The outlook seems gloomy. Yet, the market continues to charge higher. In fact, it’s up 39% since the March bottoms.
What gives?
Many of my colleagues in the newsletter industry believe there’s a huge disconnect between Wall Street and Main Street. And they’re looking for a “why” behind the numbers.
But as I’ve told you before, the “why” really doesn’t matter.
When it comes to the markets, the only thing that matters is the data. And that means looking at the big money’s movements…
You see, I’ve been following the big money for nearly two decades. It includes some of the smartest people on the planet.
And when they plunk down billions of dollars, they’re not betting on what’s happening “now.” They’re betting on what they believe will happen six to 12 months from now.
Currently, they’re betting on a big economic turnaround once the pandemic, unrest, and political uncertainty recede.
I know it sounds contrarian. It’s so easy to look at all the negative headlines and feel like the country is going in the wrong direction.
I get it… I’m worried about the same things, too. But even during the darkest times, things always have a way of getting better.
So when it comes to investing, I take my emotions out of the equation. I look at the hard data instead.
And despite the chaos we see unfolding in front of us, the numbers point to better days ahead…
This Indicator Is Signaling More Buying
Remember, I created an “unbeatable” stock-picking system that scans nearly 5,500 stocks each day. It uses algorithms to rank each one for strength.
And to make sure it’s highly accurate, comprehensive, and effective, I used my experience from nearly two decades at prestigious Wall Street firms – regularly trading more than $1 billion worth of stock for major clients.
But my system does more than just look at individual stocks. It also looks at the big-money buying and selling in the broad market.
Now, on May 11, I told you its data signaled the market was in overbought territory, but the rebound would likely still last a while. And true to those words, we’re seeing no signs of this rally slowing down…
Take a look at the chart below. It shows big-money buying in exchange-traded funds (ETFs).
As you can see, this ETF activity is a strong proxy for the market. When the big money is selling ETFs, the market is usually headed lower and bottoming. And when it’s piling into them, the market normally keeps heading higher towards a peak.
Most recently, the big boys have been loading up on ETFs again, after the broad market sell-off in March. This means we’re likely nearing a peak. But big ETF buying can last weeks – especially with the sudden surge in volume we’re seeing.
In fact, over the last 30 years, my data shows overbought periods like this last an average of a month, but as long as over three months…
Since the market went overbought on May 6, we’ve almost hit that month-long average mark. So we could see a pullback tomorrow or two more months from now.
But the exact date doesn’t really matter – as long as we have the data to guide us…
This Is When the Rally Will End
Look, I’m not dismissing the serious problems we’re facing in this country.
People are sick of isolation and lockdowns. In some cases, the protests and riots are exacerbating the economic damage caused by the COVID-19 shutdowns. And unemployment rates are still through the roof.
The economic pain is real.
But the market is about the numbers – not emotions. And if the pandemic and civil unrest we’re seeing were long-term threats, I believe they’d be reflected in the market’s price action.
Yet, here we are today, and global stocks continue to surge.
Remember, my data is so accurate, it was only one trading day off in predicting the March 23 bottom. My system’s market timing indicator – the Big-Money Index – called for the trough to be on March 20.
It also forecasted eight other market moves during this pandemic-related sell-off… including the market rebound.
And when we see the big money selling again, we’ll see a short-term pullback end this massive rally.
But in the meantime, we’ll continue to follow our win-win game plan.
We still have time to ride this latest wave of buying higher until the market crests. And when it does, we’ll take profits, raise cash, and be ready to add more winners on sale.
Whether the market continues its overbought rise – or falls after a pause to catch its breath – we’ll be prepared with the data as our guide.
Patience and process!
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Jason Bodner
Editor, Palm Beach Insider
P.S. My system follows the big money’s lead in all market conditions. And it’ll continue to take the emotions out of investing – and identify huge winners that lead you to profits – no matter where stocks are headed next.
It can help you target the best stocks out there, so you can add them to your shopping list for the coming pullback. And I’ve put together this special presentation to show you all the details of how it works.
So be sure to learn how you can access my system’s data right here.