The U.S. is in a raging bull market in stocks.
Some gurus continue to revise their upward targets for stock prices. But many keep warning of a crash. What is the average investor to think — and how to act? And how does he or she gain an edge?
The simplest way to gain an edge is to look at money flows. When more money is flowing into the market than out of the market, the market goes up, and vice versa. Let us examine the issue with charts showing the current money flows in three popular ETFs and 10 popular technology stocks.
The chart
Please click here for the chart of money flows in S&P 500 ETF SPY, Nasdaq 100 ETF QQQ, and small-cap ETF IWM.
Please click here for the chart of money flows in popular tech stocks. The chart includes FAANG stocks Facebook FB, Apple AAPL, Amazon AMZN, Netflix NFLX, and Google GOOG, GOOGL. In addition, aggressive investors are concentrated in AMD AMD, Alibaba BABA, Microsoft MSFT, Nvidia NVDA, and Tesla TSLA. For this reason, those stocks are also included in the chart.
Please observe the following from the charts:
• A bigger edge is to be gained by examining money flows in three categories that matter. At The Arora Report we examine smart money flows, momo (momentum) money flows and short squeeze money flows.
• For the most part, the momo money flows range from positive to extremely positive. This indicates that the momo crowd continues to aggressively buy stocks.
• Smart money flows in general have been ranging from negative to mildly positive….Read more at MarketWatch
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