by Jason Bodner
August 18, 2026
In 1972, the CIA quietly funded a program that sounds like science fiction.
Physicists Hal Puthoff and Russell Targ at Stanford Research Institute studied an artist named Ingo Swann, who claimed he could perceive distant locations given only the geographic coordinates.
In 1973, they asked him to describe Jupiter before NASA’s Pioneer 10 flyby. He described a faint ring around the planet. Six years later, Voyager confirmed it. Another participant, Pat Price, provided descriptions of a Soviet weapons facility later verified by satellite imagery.
The Stargate Program ran for 23 years, cost $20 million, and was declassified in 1995.
Whether you believe in remote viewing is beside the point. Most see what is directly in front of them. But sometimes a trained observer, or a well-calibrated instrument, can see what everyone else is missing.
That’s essentially what accurate money flow data does for markets. It strips away headlines, fear, and narratives about what stocks should be doing and measures what big investors are actually doing.
Last week, the surface looked complicated, but underneath was a different story.
What the Surface Looked Like Last Week
Iran’s Strait of Hormuz remains unresolved, sending oil up 5% last Monday.
Yet by Thursday, the S&P 500 drove to a record high, as back-to-back low inflation readings made a September rate cut less likely, and money markets priced under a 40% chance of a hike.
Meanwhile, the Russell 2000 set a record high on Friday, suggesting the rally is expanding beyond the mega-cap names that dominated earlier this year.
The market absorbed everything thrown at it and kept climbing. Among S&P sectors, technology and healthcare accounted for 52% of all institutional inflows last week (167 of 320 total).
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Healthcare has now posted nine consecutive weeks of net inflows. Technology posted its second straight strong week as AI names continued gapping higher following last month’s liquidation event.
But the most interesting number came from where the money went. Small and mid-cap companies worth between $500 million and $50 billion accounted for 84.6% of all inflows.
Mega-cap (above $300 billion) names attracted just four-inflows, or 1.3% of the total.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
When institutions get nervous, they typically hide in the biggest, safest, most liquid names. Now, they’re doing the opposite. Money is flooding into smaller, higher-growth companies, a clear risk-on signal.
Quality names are being bought. Among the names seeing the strongest recoveries, 139-stocks carried fundamental scores that barely moved through the July sell-off, averaging 66% in both June and August.
Their overall model scores compressed from 68 to 56 under July’s selling pressure. They’re now moving back toward 64 as prices recover. The average bounce from the July low is nearly 10%.
That doesn’t look like an indiscriminate short squeeze. It looks like quality companies squished by forced selling being repriced toward where their fundamentals say they belong.
The Earnings Bonanza Continues
With 88% of S&P 500 companies reporting earnings, 86% beat earnings estimates and 76% beat revenue estimates. The blended earnings growth rate is 50.4%, the highest since Q2 2021. LSEG shows 98% of healthcare, 93% of technology and 88% of financials beating estimates, one of the highest rates on record.
Excluding large one-time gains at two-major technology companies and the blended growth still comes in at 32%, the second-consecutive quarter above 25% and seventh-straight quarter of double-digit growth.
These are two sources coming to the same conclusion: Corporate America is delivering.
Healthcare led all sectors at 75-net inflows, a 9-week streak. It saw 82-inflows against seven-outflows, led by medical devices and specialty pharma rather than biotech names that dominated earlier this summer.
Technology followed closely at 73-net inflows, with 85-inflows against 12-outflows. Buying concentrated in enterprise software, cloud infrastructure, cybersecurity, and data platforms.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Energy returned to the positive at +22, but the downstream refiners led again, not the producers. Big companies profit from the spread between crude costs and refined product prices, not just oil performance itself. That’s a more sophisticated bet than just saying, “Oil is going up, so buy energy.”
Industrials and materials were positive, while Utilities tell the story in reverse. Of 55-stocks in our utility universe, seven saw outflows this week. That’s 12.7% of the admittedly small sector sold in a week.
The fear trade isn’t fading. It’s being reversed.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The rotation is consistent: Growth leads, defensive positions retreat, and quality is rewarded over safety.
August Is Defying the Script…So Far
August is historically the second-weakest month of the year, and that weakness is more pronounced in midterm election years. And yet the S&P 500 is pushing toward records. Small-caps are breaking out.
Flow data shows institutional accumulation rather than retreat. Three independent datasets, the historical snap-back study, seasonal calendar, and midterm election pattern, pointed toward near-term choppiness.
The market is saying something else.
When a market absorbs unresolved geopolitical tension, climbs to records, floods money into small-caps, and produces its best earnings since 2021, something important is happening beneath the surface.
The headlines tell us what to worry about. The money tells us what investors are doing.
That brings me back to Ingo Swann. You don’t have to believe he could see Jupiter’s rings to understand the lesson. Markets are filled with things we can see; oil, wars, the Fed, inflation, earnings and sales.
I care about what’s harder to see: Where is money going? It’s going into technology, healthcare, smaller companies, higher-growth companies and fundamentally strong stocks compressed by July’s forced sales.
And it’s leaving defensive utilities.
As Epictetus wrote, “It is not what happens to you but how you react to it that matters.”
August has thrown plenty of risks at this market.
So far, the market’s reaction has been to keep climbing.
That’s the signal I’m paying attention to.
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Inflation Remains Tame, for Now
Income Mail by Bryan Perry
Probing the Complexities of Domestic Energy Policy
Growth Mail by Gary Alexander
Five Big Financial Surprises in the Last 25-Years
Global Mail by Ivan Martchev
The Global Bond Boomerang Effect
Sector Spotlight by Jason Bodner
Seeing the Unseen – A Source of Superior Market Profits
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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