by Jason Bodner

July 7, 2021

When I was younger and desperate to “figure out the stock market,” I’d ask everyone everything I could, looking for the answers. Having worked in the industry, I thought that was the best way to learn. But I ended up constantly frustrated at the conflicting information I would get. Nothing would irk me more than hearing how the market came down to feelings. That’s probably because I had no feel for the market. Or worse yet, my feel was constantly wrong. I knew in my bones that feel was not the way for me to go. I needed an analytical framework to guide my decision making. Feel was fraught with “issues” for me.

To demonstrate that, I came across this fascinating fact: A study found that people scored higher in a mental agility test while wearing a lab coat that they believed was a doctor’s coat. Interestingly, the effect was not there when they believed that the same white coat was a painter’s coat.

Internal belief about the environment, irrespective of the facts about the actual environment, can impact one’s literal smartness. If you believe you’re wearing a doctor’s jacket, you’re smarter. But you may believe you’re wearing a stock market doctor’s coat, when you’re really wearing a painter’s jacket.

I tried using gut instinct and it almost broke me financially. Now I look at the data. And the data is telling me that the markets are headed higher. The first fact I look at is the Big Money Index (BMI). It measures unusual buying of all stocks on a 25-day moving average. If the blue line trends higher, that means more money is moving into the market than out. That usually means higher prices ahead. You can see after a few choppy months that the BMI is trending higher – so much so that it is nearly overbought:

Big Money Index

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

Before that term scares you into selling, remember that the data shows historically that markets can stay overbought for a long while. Last year, after the COVID crash, the market was overbought for nearly four months. What we need to be on the lookout for is when that blue line starts to fall. That would indicate more money is coming out than going in, which usually foreshadows lower prices. Seeing as we are not overbought yet – and we may stay overbought for a while once we get there – there’s nothing to fear.

Another area I like to check is ETF buying. ETFs are just baskets of stocks. They are great ways for investors to get overall exposure in a sector or theme, so when there’s sustained buying in ETFs (more so than selling), that also signals more money moving into stocks than out of stocks. Look here: ETF BUYS and SELLS

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

Notice that recently there is more buying than selling. I pay special attention when I see extreme buying in ETFs. The big blue spike usually coincides with a local peak in the market. When greed is high and peaks, markets usually pull back afterwards. You can see that ETF buying is sustained, but not extreme.

The next level to check in on is sector activity. Is there more buying than selling in various sectors? Since the end of May we have seen significantly more single stock buying than selling. And we’ve seen buying in prior growth areas too, like tech, discretionary, and health care. Here’s what we see now: MAPSignals Sector Rankings

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

Last week saw 222 buys versus 89 sells. That has been the trend for a few weeks now, but what interests me is where that buying is happening. As we can see, Big Money was piling into Industrials, Health Care, Discretionary, and Technology. This is a healthy pattern of buying as growth lives in these sectors.

To go a little deeper, I look at the stocks getting bought. Health Care saw buying in oncology, neurology, and infectious disease companies. Discretionary saw buying in consumer goods, retail, vehicles, and hospitality stocks. Tech saw buying focused heavily in software companies which were out of favor from February to May. And Industrials saw buying in manufacturing stocks.

I wanted to dig even deeper and look at all stocks but focus only on those with positive three-year sales and earnings growth, and positive profit margins. Out of more than 6,000 stocks that I scan every day, I found 1,330 with positive growth metrics. Seeing as my own portfolios full of growth stocks saw a very strong month of June, I wanted to see how growth strength in general fared in June.

Financials had the most growth stocks in the sector, but the performance on average was negative for the last month. The big winners here were Health Care, Tech, and Industrials. As you can see below, the average 1-month performance of growth stocks in those sectors was solid.

Growth Stocks

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

It’s also interesting to note that both the SPY and the QQQs had strong years to date. Most of that came in the last three months. Consider that the QQQs are +6.57% YTD, but 98% (+6.43%) came in the second quarter. SPY was up +12.71% YTD (+10.79% in the last 3 months), according to YahooFinance.

This all points to one thing for me: I believe the rotation out of growth into value is over. Big Money is scooping up growth stocks and propelling great sectors higher – sectors like Tech, Health Care, and Industrials. Most of the power of the general market, and sector strength is coming in the last 3 months. And the last month in particular was very strong for growth. All this buying is also happening on a reasonable pace: The BMI is not yet overbought and there is smooth but not extreme buying in ETFS.

It’s not all good news (it never is): Late summer is a notoriously volatile time for stocks, but overall the trend looks strong for continued reasons to cheer.

If I were wearing a painter’s coat and told you all this, you may be less inclined to believe me, so pretend I’m wearing a doctor’s coat, since I am basing my diagnoses on lab data, which rarely steers me wrong.

As for “trading with feeling,” I’ll give emotions their due by quoting what CEO Andy Dunn says: “Passion provides purpose, but data drives decisions.”

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
How Much Will 2nd Quarter GDP Grow?

Income Mail by Bryan Perry
What The Bond Market Is Saying About Inflation

Growth Mail by Gary Alexander
Is The Market Getting Ahead of Itself?

Global Mail by Ivan Martchev
The Dollar Looks Like It Wants to Run

Sector Spotlight by Jason Bodner
In This Age of Feelings, Facts are Still Safer!

View Full Archive
Read Past Issues Here

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.