New York Stock Exchange

3 Sectors See Outsized Selling

And today we’ll take a look at where markets sit. Under the surface, there’s a lot more going on than meets the eye. So, let’s take it from the top.

While major indexes like the S&P 500, DJIA, and NASDAQ are at or near all-time highs, many stocks aren’t keeping up. And a great way to see that is by looking at the MAPsignals Big Money Index. It tracks unusual trading in stocks, mapping Big Money buys and sells.

If the index is lifting, stocks are getting bought. If it’s falling, like now, that means man stocks are getting sold. Have a look:

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Clearly something is going on if the index is falling hard. Looking at last week, 3 sectors saw outsized selling: Technology, Staples, & Healthcare.

A great way to visualize this is to look at the sector table below. This is last week’s buying and selling data mapped by sector. Shaded in yellow off to the right is what’s important. If a sector saw more than 25% of its universe get bought or sold, it’s flagged.

Have a look at August 9th – 13th’s data:

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And on the flipside, you can see that Materials saw buy activity.

So, you may be asking yourself why am I telling you this? Well, I’ve learned that it’s important to get a whole picture of the market. What the major indexes do is only part of the story.

Taking a deeper dive can help investors pinpoint opportunity. Right now, signs point to volatility rising for stocks as the Big Money Index flashes a warning. And as you can see above, certain sectors are under pressure more than others.

I think a lot of this mixed action is due to low liquidity often found in summer. I’m waiting for the BMI to start rising…that will suggest that many of these pain points are firming.

But that isn’t today.

Here’s the bottom line: Under the surface of the market is a clear picture. Many stocks are pulling back. That can signal weakness ahead for markets. Technology, Staples, and Healthcare stocks saw outsized selling last week.

Keep those areas on your radar. Eventually the buyers will step back in…but, for now, signs point to near-term weakness ahead.

For long-term investors, look for buying opportunities in the weeks ahead.

Disclosure: the author holds no position in SPY, QQQ, DIA, or IWM at the time of publication.

Learn more about the MAPsignals process here: