3 of Wall Street’s Favorite “Santa Rally” Stocks

By TradeSmith Research Team

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On Thursday, Jason Bodner’s proprietary data showed the highest amount of stock and ETF buying from Wall Street institutions since at least 2020. Per my sources, it may even be the biggest surge in institutional buying activity ever recorded.

That only means one thing: time to get bullish.

Jason recently shared the essay below with his Power Trends readers — a free e-letter that regularly highlights Big Money buying activity.

It highlights three stocks that Wall Street’s buying ahead of the “Santa Claus Rally” set to hit stocks in the back half of December.

As soon as I saw it, I knew it would be of great benefit to you. So I urge you to check it out…

— Michael Salvatore

3 of Wall Street’s Favorite “Santa Rally” Stocks

By Jason Bodner, Editor, Power Trends

Big Money is on the move. In a big way.

My quantitative system picked up more Big Money buy signals yesterday than any other day so far in 2023.

Two charts tell the story. Here’s the first one… the S&P 500 yesterday.

You don’t need to be a Chartered Market Technician (yes, there is such a thing) to see that something major happened at 2:00.

That’s when the Federal Reserve announced that it would not raise rates… again. But that was expected by almost every investor on the planet.

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The catalyst that got Big Money flowing was the long-awaited pivot in the Fed’s outlook. Three rate cuts are now expected in 2024.

And boy did the money flow. Here’s the second chart… a peak inside my system at the actual Big Money buy and sell signals for every trading day in 2023. Yesterday wins the prize.

Source: MAPsignals.com
My system sniffed out 509 unusal buy signals yesterday — which is Big Money at work. That easily topped the previous high of 456 buys back on Feb. 2, and it blew away all of the buying days during the rally from March through July.

This is critical information that most investors don’t see. Most folks are familiar with exchanges like the NASDAQ, the New York Stock Exchange, and the American Stock Exchange.

But a lot of those signals probably came from private networks that are completely separate from these exchanges. Some 40% (sometimes even more) of all trades take place that way. Billions and billions of dollars are traded on lesser known, more secretive networks known as Dark Pools.

Finding them and tracking them is no easy task. You’d have to work on Wall Street, learn about these Dark Pools from top to bottom, see how they work, learn how to access and interpret the data on them, and understand how they affect stock prices.

I did that during my two decades on Wall Street, and I now know more than ever how blessed I was to learn what I did.

I love peeling the curtain back on what goes on behind the scenes. And I love even more helping investors like you compete on a more level playing field and grab a bigger share of the profits.

Speaking of profits, let’s look now at where the Big Money is flowing.

Tracking the Hidden Money Flows

My system analyzes over a million data points each day, and I included in my algorithms the telltale signs of Big Money buying and selling.

To see where the money flowed in yesterday’s buying frenzy, we look at the sectors. If you had to guess which sector had the most buys, you would probably say Technology, right?

And that would make sense. It is the strongest sector overall.

But yesterday, Financials actually led the way with 111 buy signals… or 22% of all the buy signals. It was by far the most buying in the sector this year, though there has been quite a bit of buying the last few weeks.

This tells us that Big Money has been getting in position for rate cuts for a while. That’s why it pays to track these signals.

One financial stock with Big Money flowing in is Jackson Financial (JXN). It has five buy signals over the past month, including three consecutive days to start this week.

Source: MAPsignals.com
JXN also rates well in my system with a Quantum Score of 79.3, which is in our buy zone. The fundamentals are solid with a 66.7 rating, though there are stocks with Quantum Scores in that same range that are stronger fundamentally.

The sector with the second-most buys yesterday was Health Care, with 78 signals. While that’s 2.7 times more buys than any other day this year, we again have seen consistently more buying in that sector for the last two weeks.

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Neurocrine Biosciences (NBIX) has seen quite a bit of Big Money inflows recently — six buy signals already in December. That follows an earlier flurry of buying from July into September, and shares are up 27.5% the last six months.

Source: MAPsignals.com
NBIX also has strong fundamentals and technicals, contributing to its excellent Quantum Score of 81. The data points to higher prices.

And then we get to Technology, with its 71 buy signals yesterday. Tech has been, is, and I’m sure will be the strongest sector over time. It’s the leader in growth and innovation, and it continues to reshape our world.

Cadence Design Systems (CDNS) is a highly rated tech company (Quantum Score of 77.6) that Big Money scooped up yesterday. And scooped up in November. And October.

Source: MAPsignals.com
It’s also interesting that there are no red bars — Big Money sell signals — even in the August through October choppiness.

CDNS is a “computational software” company that helps its customers design electronic systems, and its customers are in some of the hottest markets around — self-driving cars, 5G communications, hyperscale computing, health care, and others.

We own it in my Quantum Edge Pro service and are up nearly 40%. This is the advantage of tracking Dark Pools and Big Money flows — the money that moves stocks and markets that most people can’t see.

Talk soon,

Jason Bodner
Jason Bodner
Editor, Jason Bodner’s Power Trends