Animals Know in Advance – Investors Can Too It was 20 years ago this month, and one of the things I remember most is the silence. It was Sunday, December 26, 2004. I was with my family on a holiday getaway to Phuket, Thailand, home to some of that country’s most stunning and popular beaches. What stood out to me that morning was the birds. They had been very loud outside our window every other morning, but this day they were unsettlingly silent. In fact, they were long gone – like most of the other animals that made their homes there. Later that morning, the deadliest tsunami in history slammed into Thailand. It was triggered by an earthquake far out in the Indian Ocean. The massive wave hit the island of Sumatra within 20 minutes of the quake, and it then traveled another 500 miles in just 90 minutes to Thailand. The vast majority of people had no idea it was coming. When the water noticeably and strangely receded as the trough of the wave arrived first, many walked out on the sand to get a better look at the novelty. Sadly, they literally walked into a disaster. My wife was one of those who went down to look at the odd expanse of beach and boats sitting on the sand. She rushed back to our hotel when she realized what was happening. Due to a reservation mistake that we are now grateful for, we were staying up higher than the shoreline. But it wasn’t high enough. We climbed further up into the hills for safety. My wife and 3-month-old son were rescued by a helicopter, and I was picked up hours later by a Thai navy vessel. We were reunited many hours later in the middle of the night, thankful to be alive and together. But the birds and other animals knew the tsunami was coming. How? There are different theories. According to one, earthquakes generate electromagnetic waves that animals can detect hours – even days – before the actual event. This phenomenon is known as the “earthquake lights” or “seismic lightning,” and it is still not fully understood by scientists. Some scientists believe animals can hear, feel, or otherwise sense subsurface seismic activities – the shifting, grinding and breaking apart of the tectonic plates – before the full quake occurs. Whatever the explanation, our animal friends clearly know when something’s up – and even know what to do about it. Humans have long tried to harness this power, as the observations of earthquake prescience by animals goes all the way back to the time of Aristotle in the 4th century B.C. Observing animals for clues about the future goes back further… In ancient Rome, a religious official called an auspex would try to make predictions based on the behavior of birds – their flight patterns, directions, sounds, etc. The word “auspex” means birdwatcher or soothsayer. (More on a cool new system called Auspex in a moment.) Fortunately, tsunami warning systems have come a long way in the last two decades, and I hope the world never again experiences the death and destruction that 12 countries did with that tsunami 20 years ago. Technology is a big part of the progress. Technology is also a big part of the progress in our ability to forecast the direction of stock prices and act accordingly. High-powered computers, data, and algorithms make it possible, and investors who don’t have this early warning system are at an immediate disadvantage. It All Starts Here It’s a little ironic that waves have also played a big part in my investing success and career. In essence, I developed my Quantum Edge system to do what the animals do so well – which is identify the waves and act accordingly. In fact, the slogan of my institutional research service is: “Ride the Wave. Don’t fight it.” Those waves are created by Big Money, which is what we call the institutions, Wall Street players, and biggest investors on the planet that buy and sell massive amounts of stock. How massive? Institutions account for between 70% and 90% of all daily trading volume, according to J.P Morgan and Morgan Stanley. If you miss those waves, you’re missing the most powerful market force. Big Money moves stocks up, down, and all around, like the various flight patterns of birds. Unfortunately, these institutional money flows are nearly impossible for the average investor to track. These pros keep their activity quiet – if they didn’t, prices of the underlying stocks would move so fast they would end up chasing their own trades. Thanks to my unique experience facilitating these very trades from the biggest investors in the world, I learned how to observe their flight patterns and spot signals that Big Money is at work in the market as a whole and down to individual stocks. This helps me forecast what’s coming. As part of the Quantum Edge system, I designed a highly accurate market forecasting tool called the Big Money Index (BMI). It is an instant, elegant, and simple measure of unusually large money flow trends. I want to clue you in on this index because it is healthy, rising, and indicating that now is a great to own stocks. Today’s BMI is 65, which in a nutshell means that 65% of all Big Money signals in my system – the extremely unusual money flows – are buy signals. Conversely, 35% are sells. 
Source: MAPsignals.com You can see how the BMI (amber line) weakened a couple of weeks before the election and then turned higher a couple of weeks after the election. That’s the typical election year pattern, and money is again clearly flowing into stocks after a strong November launched us into what is historically another strong month in December. Various other data points and trends also tell us that now is the time to be in stocks. Inflation is under control. Interest rates set to continue falling. The economy remains “in very good shape,” according to Federal Reserve Chair Jerome Powell just yesterday. And don’t forget the record amount of cash in money market accounts – a whopping $6.5 trillion worth – much of which will need to seek better returns as interest rates fall. Two Ways to Identify the Winners I see the major indexes in an uptrend through the end of the year into 2025, with the requisite wobbles along the way, of course. So you’re likely to make money if you simply invest in the indexes. But experience and data clearly show that you can do a lot better investing in the stocks with the highest probability of moving significantly higher . We find these by observing the behavior of stocks, which again gives us clues about what’s to come and allows us to make smart decisions. The best stocks to own are those with the three power factors I call the quantum trifecta. These are growing businesses defined by superior fundamentals. Shares of those great businesses are in demand and have great technical metrics. And then I want those stocks to have Big Money chasing them. My system analyzes all those factors to determine the Quantum Score for each stock. As longtime readers know, a score between 70 and 85 is the primo buy zone. Like Arista Networks (ANET), which we just mentioned in yesterday’s Power Trends+ video was one of the top-rated stocks in the system with a Quantum Score of 84.5. (Shares have gained more than 160% since we added them in TradeSmith Investment Report.) Through years of using and testing the system with data going back 34 years, I can say that these are the stocks that outperform and grow your wealth over time. I also just learned about a new soon-to-be-released system called, appropriately, Auspex. It was created by my colleague Luke Lango at our corporate partner InvestorPlace. From what I know so far, I love the similarities with my Quantum Edge system. Luke’s model analyzes market data to find stocks that are growing (like our fundamentals), sustainably moving higher (like our technicals), and garnering positive attention in everything from rising volume (like Big Money) to positive analyst revisions. Luke’s system, as its name suggests, follows the pattern of data to divine the immediate future of almost every stock in the market. Luke and his team created the system as increased volatility wreaked havoc on investors, so he set out to building a system to find those high-probability winners for a shorter holding period. I’m told the back testing has produced excellent results. Luke’s talking about his new system in greater detail during a special broadcast next Wednesday, December 11, at 1 p.m. ET called The Auspex Anomaly Event. It’s free to attend, and you can reserve your spot simply by clicking here. Animals know what’s coming. Thanks to data, technology, and the predictive patterns of stocks, we can, too. It’s an enormous advantage over most other investors that can dramatically increase your success. Talk soon,  Jason Bodner
Editor, Jason Bodner's Power Trends P.S. The right stock at the right time can make all the difference. Names with strong momentum can go on to rise 100%… 300%… even 1,000% in relatively short order… while making their shareholders enormous amounts of money. They’re the “bullet trains” of the stock market. They move the fastest and can help you turn modest amounts of money into large amounts of money. Luke Lango’s system was designed to turn this mindset into an actionable plan. Be sure to reserve your spot here for Luke’s special event next Wednesday to learn more about it and how it can work for you. | 
No comments:
Post a Comment