My mom’s biggest lesson for me when I was learning to drive was: “Never mess with a truck or a bus!” In other words, if you’re driving a car, you don’t want to fight the big guys.
And the same rings true for the market. To make profits, you can’t fight the big money. You have to follow it instead.
Now, most people have no clue what the big boys are doing until it shows up on CNBC. But by then, it’s too late. The major moves have already been made.
For example, as I told you earlier this month, Warren Buffett’s announcement that Berkshire Hathaway had exited all its airline stock holdings in late April had airline stocks tanking the next trading day.
So wouldn’t it be nice to get a heads-up on these big-money movements before they actually happen?
Consider this… We all know what to do on the roads when we see a traffic light. If it’s green, we go. If it’s yellow, we slow down. And if it’s red, we stop.
Well, what if the market had its own “traffic light” signaling the big money’s actions?
The good news is, it does. But it’s not easy to see. That’s why I’ve dedicated my life to helping you spot it.
So today, I’ll reveal what it’s signaling today – and what it means for our game plan…
Our Stock Market Traffic Light
Remember, I spent nearly a decade and hundreds of thousands of dollars developing an “unbeatable” stock-picking system that follows the big money’s movements.
And 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 – to make sure it’s highly accurate, comprehensive, and effective.
It scans nearly 5,500 stocks each day, using algorithms to rank each one for strength. But it does more than just look at individual stocks. It also looks at the big-money buying and selling in the broad market.
This is the data powering my system’s Big Money Index (BMI). And the BMI is so accurate that it’s forecasted nine market moves during this pandemic-related sell-off (including the market’s bottom almost to the day, and its rebound).
Now, today, I want you to visualize the BMI a little differently than usual. I want you to think of it as our market traffic light. And right now, it’s flashing red…
As you know, when the index dips to 25% or lower, sellers have taken the reins, leading the markets into oversold territory. And when it hits 80% or more, it means buyers are in control and markets are overbought.
It’s simple… Green means buy. Yellow means to be patient when buying. And red means we stop buying.
So at 90.5%, we’re very overbought. But if you recall, it also means the BMI level has finally started falling. (When I wrote to you on Wednesday, it was at just over 91%.)
And as I’ve written lately, that means we’ll likely see another short-term pullback soon.
The bottom line is: This red light is telling us to stop buying stocks for right now and stay patient. And we don’t want to go against it…
Don’t Go Against the Big Money
Even though these overbought conditions could last a while, it doesn’t mean opportunity isn’t out there.
The markets are ripe for a pullback. Headlines are still negative, and the data indicates we could hit the 2,600–2,700 level for the S&P 500.
But I don’t expect stocks to retest March’s lows. And this pullback isn’t necessarily a bad thing…
You see, outliers exist in all market conditions. As long as you target these “tennis-ball” stocks – the ones that’ll rally even higher than the broad market during this volatility – the wait for profits will be worth it.
In the meantime, we’ll continue to follow our big-money “traffic light” and patiently look for prices we like when adding stocks.
We’ll be able to ride our winners, while we keep cash on hand to pick up high-quality stocks on sale.
So no matter what, we’ll execute our game plan…
Patience and process!
Editor, Palm Beach Insider
P.S. To know where the market’s headed, you have to follow the big money. It’ll show you the way to profits, even through volatile conditions.
It pinpoints the best tennis-ball stocks that’ll rocket higher. In fact, it’s already identified several winners for my Palm Beach Trader subscribers. They’re up about 25–60% in just a few months, despite the pandemic-related crash.
So don’t miss out on the next wave of big-money gains. You can join us right here.