by Jason Bodner

June 16, 2020

Parallax is a cool word. It describes the situation when the apparent position of an object looks different when viewed along two different lines of sight. Here’s the easiest way to show you. Hold your right index finger like a #1 at arm’s length positioned between your two eyes. Now look at it by closing only your left eye. Now switch the eyes, closing only your right eye. Notice how the finger jumps in position a little?

That’s the parallax effect. Now imagine that same effect at stellar distances. That’s what NASA talked about in their latest press release:  New Horizons Conducts the First Interstellar Parallax Experiment.

Long story short, the New Horizons space craft took an image of Proxima Centauri. That’s the closest star to earth (hence “Proxima”) at 4.2 light years (24.7 trillion miles) away. The light we see from that star left it 4.2 years ago. New Horizons was over four billion miles from Earth when it snapped the pics.

Check this out, particularly the position of the two stars under the circled star.

Proxima Centauri Views from New Horizons Spacecraft and Earth Image

Do you notice the discernable difference between our vantage point from Earth and four billion miles away (well past Pluto and the Kuiper Belt? It took over six hours for the images to reach Earth.)

Perhaps the coolest part of the project is that these images were produced by New Horizons scientists and Brian May. According to Wikipedia, “Brian Harold May, CBE ARCS, is an English musician, singer, songwriter, record producer, and astrophysicist. He is the lead guitarist of the rock band Queen.”

Don’t ever let anyone tell you, “Don’t quit your day-job.”

A change of perspective can change everything! Four billion miles away is the galactic equivalent of an inch or so relative to the size of the United States. So, if things look different from such small relative distances, imagine what the constellations look like just a few light years away… totally different.

I did a presentation for the Money Show last Friday. In it, I explained that I see the world of stocks a little differently than most. I have a different perspective. I believe there is an underlying sea of influence over the market. It is invisible to everyday investors, financial media, and the masses at large.

Much like our earth’s crust floating on a monstrous sea of magma – which most of us don’t know is there; we’re only reminded every now and then when a volcano spews out lava – there is an invisible sea under stocks. We see charts and financial pundits, but this sea explains the near-term future for market prices.

Let’s start with the trusty Big Money Index (BMI). Think of the S&P 500 as the Earth’s crust. We build, breathe, live, and love on it. Investors are glued to intraday and end-of-day prices that it displays. But as you can see with the BMI, many are oblivious to the fact that the S&P 500 floats on top of the Big Money.

If you were to peel back the S&P 500 from this chart, you would see the Big Money often tells us where the market is headed in advance. It happened weeks before in January. And it’s happening again now.

Big Money Leads Chart

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

Imagine surfing on the BMI blind to the market at large. You ignore the earth’s crust and become a magma surfer. After all, the solid crust above just floats on the hot liquid sea.

With the BMI ocean serving as a leading indicator, we can see these waves. That’s exactly what you’ll see in the next few charts: waves of big money ebbing and flowing in and out of stocks and ETFs.

The left chart shows all Big Money stock trading. Think of it like unusually big volume. There was a massive surge in volume as money gushed out of stocks in March. But notice how, just before that, there was a drop-off, like when the sea draws backwards before the next wave comes in.

The right chart shows Big Money buying and selling. You can see the fluid waves of money underneath the market. As Big Money moves in and out of markets, we need to pay attention to the troughs and crests. When selling hits extremes, bottoms are near. When buying hits extremes (like now), tops are near.

Big Money Stock Signals, Buys and Sells Charts

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

I told you last week that when ETF buying goes nutso, you need to watch out. Once again, the underlying wave troughed and crested in advance of the market’s bottom and top.

That point is worth putting in bold type. The magma sea foretells of the direction of the crust.

Big Money ETF Signals, Buys and Sells Charts

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

Wayne Gretzky said, “Focus on where the puck is going, not where it has been.” In markets, you can’t stop the wave, but you can learn how to surf it. It’s important to surf the right waves. That’s why we focus on the invisible waves. We try to illuminate those, because that’s where the big money is headed.

Those who focused on the right big money waves were the best-informed investors, because just like that, risk was repriced. Thursday’s swoon in stocks felt like a storm, but I told you it was coming.

Remember, this correction was not unexpected. For two weeks I have been talking about extreme market exuberance and Fear of Missing Out (FOMO). On Monday, there were still buyers stepping in. Then the water suddenly sucked out and buying dropped off by 90%. The five-day average buying was 350.

But Tuesday saw only 33 buys. Thursday and Friday were even lower.

Big Money Stock Signals Dropoff Chart

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

Remember last week, I showed you crazy buying in all sectors. It happened again last week, but almost entirely on Monday. Then the buying vacuum suddenly appeared. Almost all the yellow (the buying of more than 25% the stocks in the sector we track for big trading) happened Monday:

MapSignals Sector Rankings Table

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

Humans are tricked into believing we see all of what’s there. But we really only see an estimated .0035% of the electromagnetic spectrum. There’s literally more than 99.99% of the whole field that we don’t see.

Electromagnetic Spectrum Image

That’s how I see the market – as invisible waves. That different perspective offers a whole new world of sight. An astral Parallax effect was recorded by a rock n’ roll guitarist, Brian May, who knows well about adding different perspectives. He said, “Astronomy’s much more fun when you’re not an astronomer.”

Brian May Quote Image

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

Please see important disclosures below.

Also In This Issue

A Look Ahead by Louis Navellier
The Fed Launches an Epic Battle Against Deflation

Income Mail by Bryan Perry
Risk Assets Are Proving Resilient

Growth Mail by Gary Alexander
Both Gold and Stocks Belong in a Balanced Portfolio

Global Mail by Ivan Martchev
“We Print it Digitally” – Fed Chairman Powell

Sector Spotlight by Jason Bodner
Seeing the Stock Market “A Little Differently”

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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

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