by Jason Bodner

October 13, 2020

A Mouse with a helmut on attempting to rob a trap

Being timely is one thing but being clever is better. Take Aberdeen Seagulls for example. They don’t need punctuality in the rainy northeastern Scottish city of Aberdeen. These bright birds mimic rain by tapping their feet on the ground. It makes vibrations similar to those caused by rain. Unsuspecting worms come up to the surface believing that it is raining. Presto: Effortless snacks are delivered to your table.

How might all this relate to stock market investing?

I won’t sugarcoat it: It’s tough to make a market call right now. On the one hand, we have dread-filled (dreadful) headlines; sadly, that’s nothing new, but an uncertain election looms like a fast-approaching angry cloud as my young son used to say. I’ve already documented well-established Big Money patterns during election years. We already saw that pattern self-fulfill in September, with sellers in firm control.

On the other hand, we have the only thing I have come to trust in analyzing markets and stocks: ongoing big money data. Currently, the two are in a bit of a conflict, making looking forward a little tougher. But in the end, I have to go with cold, emotionless hard data. And that data says that the buyers are back. That may not fit the expected game plan of a post-election bump, but … the early bird catches the worm.

Every election year since our data began in 1990 has exhibited a clear pattern: The Big Money sells ahead of uncertain elections, and then buys thereafter. This year looked to be setting up the same way, but recent buying has suddenly appeared. And it’s shifting the tides:

BMI Line Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

But there’s buying, and there’s buying. By that, I mean: We can see big money plowing into previously unloved stocks as a safe haven. They might run and buy Utilities, Staples, Communications, or high dividend stocks – namely, safety plays. Money managers that earn fees on capital deployed and not sitting in cash will chase the safest investable corners ahead of uncertainty, but that’s not what I’m seeing here. I see real juice. First, let’s look at which sectors are attracting recent capital (hint: It’s almost all of them.)

S&P 1400

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Big Money buying is noticeably in Tech, Discretionary, Financials, Materials, Industrials, and Healthcare, while “defensive” sectors like Staples, Real Estate, and Communications saw noticeably less buying. Utilities were an interesting anomaly with significant buying last week, but don’t forget: That universe is small. I look at how many stocks can be easily traded by big institutions without impacting the prices significantly. Utilities comprise the second smallest universe at 43 stocks, behind only Communications.

The last interesting thing to note is that Energy, while not seeing huge buy signals, is not seeing huge sell signals. The absence of sell signals on the most hated sector of the past few months is in itself bullish.

Next, I’d like to go into which stocks are floating to the top of the rankings. Mapsignals ranks all 5,500 stocks in terms of strongest to weakest. It factors fundamentals like sales and earnings growth, profit margins, and debt levels while also looking at the technical strength of how stocks are recently trading. Once all stocks are graded, it looks for Big Money buying, which reduces the pool to about 100 per day. By looking at the top-ranked stocks being bought, we can see leadership emerging at market pivot points.

The seismic shift in buying is clear in the last week or so, and it’s not defensive stuff. The juicier names are catching the attention of Big Money. That is a very bullish sign. The top 20 stocks of Big Money buying are often where we find tomorrow’s winners. Here is an analysis of my 20 top-ranked stocks Big Money bought last week out of a pool of 318 (removing duplicates from 561 stocks):

Sector Percentages Stock Genre

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

What’s fascinating is that the top 20 stocks boasted some stellar average metrics:

  • 1-year sales growth of +35%
  • 3-year sales growth rate of +38%
  • 1-year earnings growth rate of +71%
  • 3-year earnings growth rate of +37%
  • Profit margin of 16%

The picture that is emerging is this:

  1. Buyers are back and they are buying top quality stocks.
  2. This is an offensive move, not defensive action.
  3. Election uncertainty is becoming less of a hurdle for Big Money.
  4. The earning season shopping spree shows us that earnings are working, and Big Money expects them to continue to work.

Sometimes great stocks can report great numbers and guidance and still get sold if the trend is not expected to continue, but that’s not what we’re seeing here. Although past performance is not necessarily indicative of future results for earnings season, the same can also be said for Big Money election data. In the past several election years, buying occurred just after the election. This year some buying seems to be coming early – at least for now. Tomorrow may bring different data, but the trend is reversing higher.

SPY Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

This means that small caps are catching a bid and we see it with relative out performance recently. This is another bullish item to add to our list. In a big bull market, you want big volume up days and light volume down days. That’s just another something to keep your eye on.

There’s good stuff going on data-wise, so watch and wait. It’s better to be the second mouse than the first.

All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.

Please see important disclosures below.

About The Author

Jason Bodner

Jason Bodner writes Sector Spotlight in the weekly Marketmail publication and has authored several white papers for the company. He is also Co-Founder of Macro Analytics for Professionals which produces proprietary equity accumulation/distribution research for its clients. Previously, Mr. Bodner served as Director of European Equity Derivatives for Cantor Fitzgerald Europe in London, then moved to the role of Head of Equity Derivatives North America for the same company in New York. He also served as S.V.P. Equity Derivatives for Jefferies, LLC. He received a B.S. in business administration in 1996, with honors, from Skidmore College as a member of the Periclean Honors Society. All content of “Sector Spotlight” represents the opinion of Jason Bodner

Important Disclosures:

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.

ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:

  • ETF shares may trade above or below their net asset value;
  • An active trading market for an ETF’s shares may not develop or be maintained;
  • The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
  • The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
  • Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.

Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.

Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.

This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at or by requesting a copy by emailing All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades.  Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.

FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.