Stocks Are Actually Overbought – But That Doesn’t Mean What You Might Think
The BMI is what it sounds like – a measure of what Big Money is doing. It calculates all the Big Money signals picked up by my system in the daily data – all the unusual buying and selling of stocks and ETFs – and plots them on a 25-day moving average. It is a fantastic proxy for unusual money flows – the money flows that move stocks. It’s unique, unavailable anywhere else, and stunningly accurate at pinpointing the market’s pivot points. In the huge rally to finish off 2023, the BMI rose all the way into overbought territory (the red dotted line) on Dec. 14. It’s still overbought exactly five weeks later.
