by Jason Bodner
April 7, 2026
Astronomers recently witnessed something extraordinary. Roughly 130-million light-years away from us, two neutron stars spiraled toward each other in a slow, inevitable collision. What made it remarkable was not just the explosion, but how it was detected. Scientists did not see it. They heard it. Yes, HEARD it.
Instruments from Cal-Tech’s LIGO picked up faint gravitational waves as the system tightened. The LIGO equipment allowed the team to hear two-black holes growing as they merged into one.
The signal built gradually. Frequency increased. The orbit shrank. Long before telescopes captured the flash, the outcome was already in motion. By the time the light reached Earth, it was all over.
Markets move the same way. The visible move is usually the final stage of something developing beneath the surface. Right now, the surface looks “mixed,” but underneath, the message is far more consistent.
The market hasn’t been broken, but it has been under steady distribution pressure since the start of the year. Anyone focused only on major index levels would miss it. The internal data tell a different story.
Let’s start, as usual, with the Big Money Index (BMI), which has fallen 11-straight sessions, dropping from above 70-percent in early February to 41.4 (on Friday) in under two-months. This is significant because the move pushed it below its long-term median into the lower third of all readings since 1990. The smoothed trend is still declining, which points to sustained pressure rather than a short-lived shock.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The BMI is approaching a range which matters. Readings near 35 have often aligned with oversold conditions, with deeper extremes near 25. We are not there yet, but we are getting close enough.
Next, we know the flow data reinforces the shift. Outflows have exceeded inflows in nine of the last 11-sessions. The change from earlier this year is clear. Control has moved from buyers to sellers, quickly.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The action on March 12 stands out. Outflows surged while inflows lagged, pushing the daily ratio into the bottom decile of historical readings, which tend to appear when the flow is forced, not gradually adjusted.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Volatility has moved higher alongside this shift. The CBOE Volatility Index is sitting in the high 20s. Elevated, but not extreme. The market is adjusting, not unraveling.
Looking at sectors, the story becomes more precise.
Energy is still attracting steady, persistent inflows. This is not a short burst of interest just due to the Iran War. It has been consistent and one-directional for months now:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
As of last week, 18 of the top 20-liquid ETFs are energy-related, which confirms the breadth of the move:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Financials show the opposite behavior. Financials have seen sustained outflows, with several stretches in which selling overwhelmed buying by wide margins. The names being exited include several global banks and large asset managers, which suggest this is not isolated. It is broad.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
One of the more surprising developments is in consumer staples. In a typical defensive rotation, this group would see inflows. Instead, we’ve seen selling, reflecting reallocation rather than a move to safety.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
There was also a key moment in which selling became widespread. On March 20, outflows were very heavy. For context, the 337-outflows registered on March 20 lie within the top 1.1 percentile. In other words, of 9,103-trading days, 8,998-days had fewer outflows. Selling surged across nearly every sector. Industrials, health care, materials, discretionary. Everything was hit at once. These types of broad events often coincide with short-term exhaustion, where a large amount of supply is cleared quickly.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
In the following sessions, outflows dwindled. Health care provides a clear example. After being one of the most heavily sold sectors earlier in the month, it has recently seen renewed inflows.
And now, biotech and some large-cap names are beginning to attract capital again.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Taken together, this market is being reshaped, rather than moving uniformly higher or lower. The BMI is trending toward levels which have historically drawn buyers. Outflows dominate, but not at crisis levels. Volatility is elevated but contained. A broad flush has already taken place, and capital is rotating.
An Unusual Alignment to Notice…
Within this context, one amazing development stands out. An ultra-rare signal has just been triggered. The setup requires a sharp one-day move in the NASDAQ Composite, elevated institutional activity, and a depressed BMI below 50. All three conditions have now aligned.
Since 2009, this combination has appeared just 11-times out of more than 4,000-trading days. The short-term aftermath has not always been smooth. Markets can stall or move unevenly in the days ahead.
Over longer periods, the pattern becomes more consistent. Forward returns have been strongly positive, with meaningful median gains. A year later, markets were higher in 100% of such instances:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The latest instance checks every box.
- A sharp index surge.
- Heavy institutional participation.
- A BMI reading which reflects weak positioning.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
For investors, the takeaway is straightforward. Broad exposure through the Invesco QQQ Trust has historically captured much of the upside following similar setups. At the same time, the underlying flow suggest leadership will be concentrated. Capital is not moving evenly. It is targeting specific sectors.
This is where the opportunity tends to emerge first. The challenge is not identifying the setup. The data is clear. The challenge is acting while conditions still feel unsettled.
Periods like this rarely come with confirmation. They tend to feel incomplete, with mixed signals and uneven performance. Uncertainty is part of the process.
The shift is underway. Headlines scream war, but positioning change is visible beneath the surface.
The indices may not show it, but the bigger risk now might be to the upside, not downside.
As William Gibson observed: “The future is already here, but it is not evenly distributed.”
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
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China’s Coming Sinking Spell Implies Rising U.S. Growth
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Investors Hope for the Best, but are they Prepared for the Worst?
Sector Spotlight by Jason Bodner
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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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