A great tool for stock market investors is to look at segmented money flows. Segmented money flows are like an X-ray. Just like a doctor uses an X-ray to look beneath the surface, investors can do the same with segmented money flows.

The Chart

Please click here for a chart showing segmented money flows in 11 popular tech stocks.

Note the following:

  • The momo crowd money flows are extremely positive in Apple (AAPL) stock, Amazon (AMZN) stock, Netflix (NFLX) stock and NVIDIA (NVDA) stock.
  • The momo crowd money flows are very positive in AMD (AMD) stock and Tesla (TSLA) stock.
  • In contrast to the momo crowd, smart money flows are mild negative in Apple stock, Netflix stock and AMD stock.
  • The momo crowd money flows are positive in Microsoft (MSFT) stock, Intel (INTC) stock, Facebook (FB) stock and Google (GOOG) stock.
  • Smart money flows are positive in Alibaba (BABA) stock.
  • The risk-adjusted rank is #1 for Alibaba.
  • The none risk-adjusted rank is #1 for NVIDIA.  In contrast, the risk-adjusted rank for NVIDIA is #9.

Short-Squeezes

The chart shows money flow data for short squeeze in 11 popular tech stocks.

A short squeeze occurs when short sellers either panic or are compelled to buy to cover shares that were previously short sold. This leads to a lot of artificial buying that is not based on fundamentals.

A trigger for a short squeeze can be slightly good news.

Stock Rankings

The chart also shows the relative rankings of the 11 popular tech stocks. These rankings are based on the six screens of the ZYX Change Method.

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Risk-adjusted rankings are more useful for medium- and long-term positions. Non-risk-adjusted rankings are more useful for short-term or trade-around positions.

 

More Help Understanding Money Flows

Please read below:

Smart Money Flows

Smart money often tends to buy low and sell high.  Smart money also often tends to be an early buyer.

Smart money has more resources, knows more and is often correct. Investors are better off following smart money.

The data in the chart shows smart money flows in an easily actionable form.

Momo Crowd

The momo crowd gets excited by momentum.  The momo crowd often ends up buying high and selling low.

The data in the chart shows momo crowd money flows in an easily actionable form.  The momo crowd flows are often useful for short-term trades.

Short Squeeze

Short selling is a technique to profit from falling stock or ETF prices.  When the price rises, short sellers feel compelled to buy to cover their short positions.  Such buying often rapidly moves prices up.  This is called short squeeze.

The chart shows a potential of a short squeeze. Paying attention to a short squeeze can make investors a lot of money from the long side.  When the short squeeze ends, it provides opportunities for investors to make money from the short side.  (The short squeeze move is different from the momentum move.)

Ranks

Ranks shown on the chart are based on the six screens of the ZYX Change Method.  Please click here to learn about the six screens of the ZYX Method.

ZYX Change Method provides an additional edge to investors in stocks.  ZYX Change Method is unique. The method has an unrivaled performance record over a very long period of time in both bull and bear markets.

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Risk Adjusted Rank

In investing, risk and reward are two sides of a coin.  On the surface, it seems that higher risk you take, the higher should be your rewards.  In reality, without the help of a proven method and a systematic scientific approach, the foregoing statement is a myth.  The goal of every investor should be to generate returns higher than those commensurate with the risk taken.

The risk-adjusted rank takes this into account.  This is often more suitable for medium to long-term investments.

Risk adjusted rank goes hand in hand with smart money flows.

Non Risk Adjusted Rank

Non risk adjusted rank does not take risk into account.  It goes hand in hand with the momo crowd money flows.

This is often more suitable for short-term trades.

Complexity

Markets are inherently complex. Investors who are fooled into simple methods often end up losing money. We make it as simple as possible for our subscribers but not any simpler than it needs to be to generate high risk adjusted returns.  Please read Getting A Running Start Guide.