by Jason Bodner
March 17, 2026
Astronomers just observed something extraordinary – two-planets collided, roughly 11,000-light years away. The impact sent debris and energy rippling across the surrounding solar-system.
When massive objects suddenly shift, the shock-waves can travel far beyond the point of impact.
Sound familiar? In markets, capital rarely sits still. When money switches direction, effects move quickly.
Last week, institutional flows revealed where pressure was building and where capital was rushing out.
The question in this market maelstrom is: Are you watching the smoke (the effect), or the fire (the cause)?
The smoke is the price of oil and the war in Iran, while the fire is the financials. By Wednesday’s close, our data showed 153-outflow signals in the financials against just six inflows, a 96% outflow rate.
Oil is the loud narrative. Private credit is the quiet one. Markets often hide their real stress in quiet places.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
This was not the result of regional banks or a narrow credit story. Stocks being sold read like a directory of the alternative asset management industry: Blackstone, KKR, Apollo, Ares, Carlyle, TPG, Brookfield, and Hamilton Lane. The private credit complex was being systematically liquidated without much noise.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Blackstone and Ares both saw outflows on multiple consecutive days. That kind of synchronized deterioration rarely occurs without a catalyst somewhere in the system.
Morgan Stanley quietly halted withdrawals from a private credit fund. That didn’t dominate headlines, since oil prices and the Strait of Hormuz captured the single-track mind of most media.
The smoke is the oil story. Brent crude crossed $100 per-barrel last Wednesday, an 82% surge in three-months, from $55 in mid-December. The Money Flows suggest some investors saw it coming:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The geopolitical risk in the Strait of Hormuz is real, and the price action reflects it. But history shows the relationship between oil-spikes and equity markets is rarely as simple as the headlines suggest. In our 35-year dataset, there have been only eight-prior instances when oil crossed $100 while the S&P 500 was above its 200-day moving average. All eight ultimately resolved positively for equities a year-later.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The Energy sector is the only sector seeing zero outflows all week. We recorded 56-inflow signals and not a single-outflow. The major oil companies all saw steady institutional buying. ETF flows echoed the story, as crude oil vehicles saw repeated inflows, along with commodity funds. Even a defense ETF and a managed futures strategy showed up – positioning which looks more like hedging than narrative chasing.
A more interesting signal appeared beneath the surface. Wednesday didn’t resemble a typical rotation. Rotations move money from one asset to another. What we saw looked more like liquidation.
ETF outflows on March 12 reached 119, the largest single-day reading since the tariff shocks hit the market in April 2025. The composition tells the real story.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Equity ETFs saw heavy selling across large-cap funds with 27-outflow signals, total market funds with 31, and financial sector ETFs with 22-signals, including repeated activity in KBE, KRE, and XLF.
What was more unusual was what happened simultaneously in fixed income: 70-fixed income ETF outflow signals happened in the same session. Investment grade alone accounted for 46-signals including LQD, VCIT, and JPST. High yield saw nine-signals and broad credit funds registered fifteen.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
When institutions sell both stocks and bonds simultaneously, they are not rotating; they are raising cash.
Mid-cap companies (between $5-billion and $50-billion) experienced the highest pressure, with an 82% outflow rate. These companies often rely more on credit markets than mega-caps with fortress balance sheets. If private credit conditions tighten, mid-cap borrowers usually feel it first.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
With this new data in hand, where does market history place us?
The Big Money Index (BMI) closed Wednesday at 54.9%, down 16.6-points in just 22-trading days, one of the sharpest declines in our 35-year dataset history. Meanwhile, the S&P 500 sits in what we consider the danger zone, below the 140-day moving average but still above the 200-day average at 6,600.
To understand what typically follows a move like this, we looked at historical analogs matching today’s conditions: a BMI between 48% and 65%, a 20-day drop of more than seven-points, the one-day ratio below 35%, the VIX above 20, and the S&P still holding its 200-day moving average.
There were 80-historical cases matching this setup.
Across those episodes, the median S&P 500 return was positive at every horizon out to two-years. The edge builds with time: +1.5% after one-week, +4.2% after one-month, +8.5% after six-months, and +16.4% after one-year, with 86% of one-year outcomes positive.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
There is another important detail. When the S&P holds above its 200-day moving average while the BMI falls this quickly, in all 15-prior instances, the market was higher one-year later.
But what happens in instance #16?
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
This signal predicts where we may be in a year — but not what happens next Tuesday, frustrating short-term traders. The short-term picture is noisy. A week later is essentially a coin-flip, up or down c. 3%.
The real bear risk lives in a much thinner tail of history.
Nearly all negative one-year outcomes cluster around the 2007 pre-financial crisis period, then the big decline came in 2008, and late-2021. Both environments shared one critical feature today’s setup lacks: the S&P had already broken below its 200-day moving average before those signals triggered.
That makes one level more important than all the others: 6,600 on the S&P 500.
As long as the S&P remains above its 200-day moving average, history suggests patience has been rewarded 86% of the time, with a median gain of more than 16% within a year.
The problem is … we’re getting close. Short-term signals confirm the stress visible in flows. The one-day ratio fell to 17% on Wednesday, placing it in the bottom 11% of readings since 1990. We have now seen five-consecutive days below 30%, a sequence signals genuine institutional capitulation.
So, what matters most from here?
Three lines-in-the-sand deserve our attention.
- The S&P 500’s 200-day moving average at 6,600. Losing it could change the technical framework.
- The second is the Big Money Index at 50%, where bullish historical analogs begin to weaken.
- The third is private credit, specifically whether the Morgan Stanley situation is isolated or evolves into something larger. Right now, the data shows fear, but fear and danger is not the same thing.
For now, all three-lines are holding: The 200-day still holds. The Big Money Index still holds, and the fire in the financials may just be the smoke from the oil price squeeze. That’s what my brain and gut tells me.
“In the stock market, the most important organ is the stomach, not the brain.”- Peter Lynch
Navellier & Associates; do not own Blackstone, KKR, Apollo, Ares, Carlyle, TPG, Brookfield, and Hamilton Lane in Managed accounts. Jason Bodner does not personally own Blackstone, KKR, Apollo, Ares, Carlyle, TPG, Brookfield, and Hamilton Lane.
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Will Oil Prices Reach the Stratosphere – or Retreat Soon (or Both)?
Income Mail by Bryan Perry
A New Golden Buying Opportunity?
Growth Mail by Gary Alexander
Ireland is Europe’s Strongest Economy – Happy Saint Patrick’s Day!
Global Mail by Ivan Martchev
The Longer the War, the Worse the Economic Impact
Sector Spotlight by Jason Bodner
Where There’s Market Smoke, There’s Fire – But Where’s the Fire?
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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