by Jason Bodner
December 23, 2025
It’s human to jump to premature conclusions. If I say the word “camel,” you probably picture a far-off desert in the Middle East, maybe in Saudi Arabia. You may see Bedouin tents flapping in dry winds and lanterns swaying as camels wait patiently outside. That image feels right. But did you know that Saudi Arabia actually import camels? Since the early 2000s, many of those camels have come from Australia.
Suddenly, the picture in your head no longer fits the new reality. Your brain filled in a familiar story of a desert caravan, even though the data said something else entirely. Markets work in the same way.
We all use mental shortcuts when investing. Early impressions, recent experiences, and emotional states shape how we interpret what we see. After a stressful week, for instance, we might fixate on the losses in our portfolios. When markets are calm and drifting higher, we often gloss over any risk and focus on what is working well. Two investors can look at the same market and come away with totally different conclusions, because their starting biases are different. But a fresh look at the data strips away emotion and narrative. It forces us to look at what is actually happening, not what we feel “should be” happening.
In December, to date, the S&P 500 is down slightly, -0.21% for the month. That alone has sparked plenty of chatter about whether the traditional Santa Claus rally will show up on time this year. Historically, December is a strong month. Since 1990, over 70% of Decembers have ended with positive returns.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
When markets deviate from the norm, it invites doubt… but instead of guessing, let’s turn to the data.
Our first look is at the Big Money Index (BMI). Since its November 20th low, the BMI has been trending higher. It climbed from roughly 45% to about 60% before cooling by a single-point during last week’s choppy action. That pause is not concerning. In fact, it is healthy. What matters is the broader trend, and the underlying metrics remain strong. This is not what a market rolling over typically looks like.
Next, look at Elevated Trading Volume (ETV). The rally off the November lows was accompanied by a surge in unusual volume. That is critical. Price moves backed by volume tend to have durability. Rallies without volume are suspect. Participation is evident this time, and that gives legitimacy to the recovery.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Money Flow data sharpens the picture further. Since November 21st, the day after the market trough, inflows have outweighed outflows by nearly three to one. The cumulative inflow bars have dominated the data, while outflows have remained muted. This is not just true for individual stocks. ETFs show the same pattern of inflows rising and outflows fading. That speaks to broad participation, not narrow speculation.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
What is even more encouraging is that the money is flowing into growth sectors and smaller stocks. Nearly 84% of all inflow signals since the November lows have been concentrated in companies with market capitalization between $500-million and $5-billion, and $5-billion to $50-billion. These are small-cap and mid-cap companies, often the biggest growth engines of the market. Capital does not rotate into this part of the market when investors are fearful. It does so when confidence is returning.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Sector flows reinforce that message. Since the November lows, the strongest inflows have gone to Technology, Health Care, Industrials, Energy, and Discretionary – all growth-oriented sectors. When these sectors are among the leaders, it tells us investors are positioning for expansion, not contraction.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Sector rankings tell a similar story. Technology, Industrials, and Discretionary sit firmly in the top tier:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Financials recently pushed to a six-month high, as did Industrials. Discretionary are doing the same thing, and that is particularly important, as it signals confidence in the consumer and in disposable income flowing through the economy. Meanwhile, the weakest sectors are Utilities, Staples, and Real Estate.
In short, growth is acting like growth, and defense is acting defensive.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
That was not always the case. For a stretch, Utilities sat near the top of the rankings, albeit from a trend toward fervor over AI power. That inversion has now corrected. Utilities have slipped to the middle of the pack, and leadership has rotated back toward cyclical and growth-oriented areas of the market.
Looking deeper, the story is consistent. Since the November lows, Health Care, Financials, Technology, Discretionary, and Industrials have absorbed the majority of inflows. When we break this down further we see roughly half of all inflows have been in pharmaceuticals, banks, insurance, investment firms, hospitality, mining, software, and apparel. These are not hiding places. They reflect some risk appetite.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
I would like to see even more Technology and Discretionary representation here, but the trend is moving in the right direction. The groundwork is being laid. Taken together, the message is clear. Despite short-term noise, the market is behaving in a constructive way. Flows suggest a favorable setup for the final days of the year, with a reasonable chance of turning December positive. More importantly, the positioning sets the stage for momentum to carry into the new year and beyond.
Markets can deceive us, just like our assumptions about camels. What feels obvious is not always correct. That is why data, not narrative, deserves our attention. As investors, our job is not to predict. It is to observe, adapt, and follow where the money is actually going.
“Reality is merely an illusion, albeit a very persistent one.” – Albert Einstein
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
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Gold Has More Room to Rise in 2026
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My Top 10 Books from 2025 (Part 2: Conclusion)
Global Mail by Ivan Martchev
There is Still Time to Get to S&P 7,000 in 2025
Sector Spotlight by Jason Bodner
Seeing Beyond Our Stubborn Biases
View Full Archive
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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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