Inflation, rising interest rates, or a new President has been some recent scary headlines I can remember. Many thought surely that markets would fall hard, but they didn’t.
They even said Software stocks would get crushed. But what did stocks do?
The market shrugged off the fears like it usually does. But, the above chart is only recent history. Let’s take a look at the last 10 years of spooky headlines I can remember.
There is pattern if you look closely: The stock market goes up and to the right most of the time.
I want less stress in my life. Turning off the headlines can help! Now, let’s take a look at what stocks did last week by sector.
Stocks Are Getting Scooped Up
Each week at my research firm, MAPsignals, we isolate the prior week’s buying and selling by sector. Anything that’s meaningful, we highlight in yellow. It marks that the sector saw 25%+ of its universe saw outsized buying or selling.
As you can see, lots of sectors had chunky buyers. I’ve been harping on this for many weeks. Look how most sectors saw big buying:
This just points to increasing momentum across the board. Also notice how sellers are no where to be found. That’s a recipe for a rally!
When buying in stocks gets wild, our most popular index ramps: The Big Money Index. It’s a smooth moving average of all of those buy and sell signals.
It’s been jumping:
If the BMI is heading up, chances are that stocks will follow…and vice versa.
But most of you know I look at the quality of stocks. I’m a growth stock guy. Last showed 25% of all buy signals had incredible sales and earnings growth.
The average 3-year sales growth of those 141 stocks was +28% and the 3-year average earning growth was +531%!
Source: MAPsignals, FactSet
Interestingly, 72% of the Technology stocks that saw green were Software stocks. That’s bullish, folks.
The bottom line is this: Buying has been lifting markets for weeks. If you’re a growth investor, smile. Odds suggest new highs for stocks soon. I focus less on headlines and follow the Big Money. Right now it says keep those rally hats on.
Disclosure: the author holds no position in SPY or the S&P 500 at the time of publication.
Learn more about the MAPsignals process here: www.mapsignals.com
For a look at all of today’s economic events, check out our economic calendar.