by Jason Bodner

December 20, 2022

A signalman operates train signal systems, serving an important role in the railway industry. In South Africa in the 1880s, “Signalman Jack” worked nine years and never made a single mistake on the job. This may seem unremarkable, but Signalman Jack was a baboon. His owner lost his legs and needed help getting to work. He trained his baboon to eventually do his job. This freed him up to pursue hobbies.

Instead of firing him or the baboon, the railway made the monkey an official employee. His official salary was 20 cents per week and a bottle of beer.

Jack the Baboon

If a baboon could successfully traffic people and cargo on a busy railway, perhaps we shouldn’t over- complicate the stock market. After all, it really isn’t that complex. The daily gyrations of stock prices are just an expression of all the human emotions wrapped up in buying and selling decisions, including fear and greed on any given day. Last week, there was a little of one (greed) and plenty of the other (fear).

In the news feed last week, things just seemed to get worse, and sentiment suffered an ugly dent. But that’s my emotional side speaking. I see the red price action of sinking stocks. I hear the cold, harsh words of the Fed Chair. I sense the negativity in other people’s attitudes towards our economic future.

All these things nudge me to succumb to the notion that maybe stocks won’t do that well in December after all. But then I remove my emotions and look at the task at hand. Maybe that’s why our baboon was so good at his job. He wasn’t worried about other people’s feelings, their fears, or their anxieties over what might or might not happen. He simply had a job to do, and he did it – flawlessly for nine years!

So, let’s be more like Signalman Jack. Let’s ditch our feelings and check out what the data tell us.

Starting from the top, the Big Money Index (BMI) is surging towards overbought territory. This simply means that big buyers are in control and there has been significantly more unusual buying than unusual selling in recent weeks. We can see the BMI is at its second highest level of the year, above 70%:

Big Money Index Chart

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

Looking at the three-month charts, we see a strong surge in the BMI accompanied by a steady rise in buying. The daily buys and sells of both stocks and ETFs are both solid and steady. Notice that the peaks and valleys of the SPY since mid-October line up nicely with stock buying waxing and waning.

Big Money Index & BS Chart

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

The same can be seen for ETFs, only when ETF buying gets wildly intense, like late November, it historically signals near-term tops. This time was no exception. That’s nothing to fear; it just often notes that a pause in a market’s rise usually follows.

Big Money ETF BS Chart

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

We can get a better sense of what takes place under the surface by looking at sectors, although one thing needs to be said before we get to that. If you’ve been following me, you know that since August, I have forecasted a sloppy September, a weak start to October followed by a lift in stocks through the end of the year. I also said that history suggested a stronger-than-average fourth quarter due to mid-term elections.

This has played out to a “T” so far, but not due to any gut instinct or guess work. I looked at over 30 years of data and historical averages to guide my thinking.

One final note on that… concerning mid-term election years: 10 of 10 mid-term years since 1980 saw a market rise from November 1 to the next April 30th with an average +12.6% gain on the S&P 500 during that six-month time period. We shall see if the streak continues, but history is on our side.

Next up, the sector rankings are tabulated below. Not much drastic change is happening. Energy still ranks #1 despite some pressure on the price of oil lately. Tech and discretionary remain near the bottom:

Sector Table

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

When digging deeper, what I see below is meaningful buying in nearly every sector. You can see it by looking at the blue bars on the right side of each chart.

XLE vs XLU Charts

XLI vs XLP Charts

XLB vs XLV Charts

XLF vs XLY Charts

XLK vs XLRE Charts

XLC Chart

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

As I write this (on Friday, December 16), we haven’t seen the kind of tremendous selling that one might associate with ugly market performances like Thursday, December 15. In fact, thus far, for the week, we have seen more buying than selling, and the buying continues to be focused in small and mid-cap stocks:

Big Money Market Cap Chart

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

The Fed’s tone was hawkish enough to spook investors on Thursday, but was it hawkish enough to change the near-term trend? Only time will tell, but more importantly, the data will tell.

We need to wait to see what the data suggest in the next few days, but recent data make me less pessimistic. Down days for stocks have been below average on volume while up days have been above average volume. Even Thursday’s ugly sell-off was around the 3-month average volume by my metrics.

Powell’s job isn’t easy, but it is straightforward: Monitor the data and react accordingly in the Federal Reserve Board’s best collective judgment. Maybe that is easy, but I certainly wouldn’t want that job.

Maybe Signalman Jack would do better. I’m not suggesting a baboon could do Powell’s job. But it points out the inherent pressure of investors trying to be one step ahead of the game. The media makes us believe that we should already know what should happen tomorrow, and what the value of an entire stock market should be a couple of weeks from now. But if we were to take a Signalman Jack approach, we would just do our job as investors, day to day. Then, we follow a simple plan of pushing the right levers.

That brings us to the recipe that I follow, which is to identify stocks with superior fundamentals that are getting bought in an unusual way by the largest investors on planet earth, and invest in those over time.

In the words of Confucius: “Life is really simple, but we insist on making it complicated.”

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:

Jason Bodner is a co-founder and co-owner of Mapsignals. Mr. Bodner is an independent contractor who is occasionally hired by Navellier & Associates to write an article and or provide opinions for possible use in articles that appear in Navellier & Associates weekly Market Mail. Mr. Bodner is not employed or affiliated with Louis Navellier, Navellier & Associates, Inc., or any other Navellier owned entity. The opinions and statements made here are those of Mr. Bodner and not necessarily those of any other persons or entities. This is not an endorsement, or solicitation or testimonial or investment advice regarding the BMI Index or any statements or recommendations or analysis in the article or the BMI Index or Mapsignals or its products or strategies.

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.