by Jason Bodner
November 11, 2025
Before the current TSA backlog, during any normal business day there are 12,000 to 14,000-commercial planes in the sky at any given moment, and more than 20,000-flights, if you include military, private, and cargo-planes, carrying a combined 3.2-million people. Despite that seemingly crowded sky above us, the global all-accident rate for commercial aviation in 2024 was just 1.13-accidents per-million flights – or about one-accident for every 880,000-flights. In other words, 99.99+% of all flights are accident-free.
But not all flights are smooth. If I were the captain of a flight, I’d say: “Please remain seated and keep your seat-belt fastened. We’re likely to hit turbulence at any time, as we usually suffer bumpy-patches.”
Investing is like any other journey: The route from point A to point B is rarely a straight-line. Twists and turns make life interesting, but they also make some investors impatient and anxious. Right now, despite expecting clear skies for a historically strong seasonal month, early November is encountering turbulence.
Under the surface, there is wicked volatility going on. Proof? Let’s begin with the Big Money Index (BMI), the MoneyFlows.com indicator of unusually large money flows. This is a 25-day moving average of all heavy inflows and outflows. Dipping below 54%, it is sinking – and has been since mid-September.
Most indexes hit new highs recently, but I don’t think that surge will continue, short-term. If I were a doom-and-gloom pessimist, I could scare you by saying the most obvious analog to today’s situation was in January of 2020, when the same divergence pattern led to an historic drop – CoVID-induced, of course.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
But I’m no Debbie-Downer and this isn’t 2020. Conditions today are far healthier. Early in this BMI slide, inflows decelerated; only in the last few sessions did outflows start to accelerate.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Will that shift spread into a broader market correction? Possibly. There are several factors to consider:
First, when corrections deepen and ultimately reach peak intensity, outflows are everywhere.
ETFs are a great measure for monitoring when the herd starts rushing for the exits. Look at the ETF flows chart, and you’ll clearly see April saw immense and unsustainable outflows from ETFs. By comparison, the recent air-pocket has yielded only a slight-elevation in outflows:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
It is important to qualify the distribution of flows for ETFs. Below, we can see inflows on the left, and outflows on the right. Money is rushing out of credit and crypto-currency. Inflows are moving into more defensive areas like Investment Grade, Communications, and diversified Total Market.
That said, don’t put too much weight on inflows, because they have been scarce in the last week.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Next, we’ll look at ETVs (Elevated Trading Volumes). Think of these yellow-bars as unusually large trades. The past six-sessions have seen higher-than-average trading activity. Historically, this type of above-average volume is associated with pressure in the equity market.
The good news is that, when it subsides, it is usually associated with a bounce.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
If this continues, the historical playbook (sampled below) makes the turbulence bearable:
- Step 1: Huge volumes trigger sell-off.
- Step 2: Capitulation marks the bottom.
- Step 3: A huge rally follows.
Here is a diagnostic table of how that playbook has repeated itself, just since 2020:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Looking at how equity flows are distributed helps us contextualize history versus today. Since outflows started picking up just before Halloween, small-cap and mid-cap stocks have borne the brunt of selling. That is notable because they have been the biggest beneficiaries, by far, since Trump delayed tariffs on May 12.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Turning our attention to sector-flows, we again must not put too much weight on inflows as they have been lower (in number) compared to outflows. Again, flows into Technology and Industrials are encouraging – those are growth-heavy sectors. The outflows are more disconcerting. Discretionary, Technology, Industrials, and Financials have led the market higher since the spring. Over the last week, they are feeling the burn.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
This sudden shift is naturally affecting sector ranks. Utilities are pulling away from the pack as investors rotate into safety. Note that Discretionary remains near the bottom of the ranks. We like to see strong Discretionary stocks indicating a healthy consumer and positive sentiment. We aren’t seeing that now.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Setting our sights on individual sector activity, there is some strange stuff happening. XLU – the Utilities sector ETF – is falling while registering net inflows. That’s odd, but Utilities and Technology have been parabolic, so a pullback was expected. Both pulled back, although Technology saw outflow signals. Industrials, despite trading near-highs, are seeing net outflows. Health Care has slight net inflows and is trading at 6-month highs. Financials (XLF) are sagging, with only minor net outflows. Materials and Staples exhibit behavior you’d expect – outflows driving down the sector. Discretionary is concerning because XLY is at 6-month highs yet seeing hefty outflows. Real Estate has had sharp swings as it dropped from its high suddenly.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
This is what you’d expect to see when clear-air turns suddenly rough.
After reviewing the data, here is what I think will happen: Markets rise long-term, but not uninterrupted. Healthy corrections are good. Long, unchecked bull-runs can create conditions for major volatility spikes. Negative news weighs-heavy on stocks. Elections might shift the sentiment. The shut-down drags on to record-lengths. The FAA may ground 10% of flights ahead of Thanksgiving week. The downside is the stalemate intensifies, but when issues regularly affect every day Americans, we get closer to resolution.
A pullback is good and healthy. It helps keep markets regular, and it offers a buying opportunity.
Let’s not forget these macro tailwinds:
- Rates must fall and they will – a boost to bottom lines for borrower.
- Taxes are lowering – also a boost to bottom lines.
- Earnings are great. As of November 7th for Q3 2025 (with 91% of S&P 500 companies reporting), 82% beat earnings expectations and 77% beat sales expectations.
Markets get moody sometimes, and that’s where we are, but systemically there is nothing wrong. Sentimentally, there is. Try not fretting about what will be. History shows us that we will be fine.
“True happiness is… to enjoy the present, without anxious dependence upon the future.” – Seneca
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Is This the Start of a “Roaring ‘20s” Market and Economy?
Income Mail by Bryan Perry
Musings from a Mixed-Up Early November Market
Growth Mail by Gary Alexander
Veterans Day Market (and Military) Milestones
Global Mail by Ivan Martchev
The Pullback is Over, If….
Sector Spotlight by Jason Bodner
Turbulence Strikes During Most Flights…and in Most Market Months
View Full Archive
Read Past Issues Here
Jason Bodner
MARKETMAIL EDITOR FOR SECTOR SPOTLIGHT
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 and 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
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