This Ultra Rare Oversold Signal is Undefeated

Many investors gave up on stocks earlier this month.

The Dow Jones Industrial Average (DJIA) recorded a drought… falling 9 days consecutively.

As scary as it sounds, this ultra rare oversold signal is undefeated.

Last week we told you to be thankful for hidden capitulation under the surface. Massive outflows lead to mega rebounds.

In a holiday-shortened week, that positive omen brought the season’s greetings with the S&P 500 gaining 2.87% since.

So much for the litany of bearish headlines littering the tape…

As they say, bears make headlines, bulls make money.

Given it’s the holidays, I felt it was important to pack today’s message with not 1, but 2 seasonal signal-study stocking stuffers.

And if that’s not enough to get you jingling the portfolio bells…stay with me until the end.

There’s evidence that Santa Claus has already come to town.

December Options Expiration Creates Bullish Catalyst

At MAPsignals, we live and breathe unusual trading volumes.

Institutional footprints leave clues.

On December 20^th, an incredible 1,746 stocks and ETFs traded in unusual fashion. Below plots the daily count of discrete listings triggering our systems:

At first glance, it’s easy to brush off December’s option expiry as a run-of-the-mill heavy trading event.

But this December is one to remember.

After further inspection, something relatively rare occurred. On a total return basis, the SPDR S&P 500 ETF Trust (SPY) gained 1.2% and traded over 125 million shares.

Take a look:

Turns out, this institutional footprint is a very bullish catalyst.

Since 2015, we found 66 occurrences when the SPY ETF gained at least 1% while trading at least 125 million shares.

Here’s what happened afterwards:

• 3-months later SPY gained 6.2% on average
• 6-months later SPY jumped 11.7% on average
• 12-months after the SPY ETF galloped 21.5%

Folks there’s alpha hiding in plain sight.

You just need a MAP to see it!

Now, I know what you’re thinking.

How can we rely on a signal with such a short trading history?

To that question, I’ll gift you a bullish catalyst that hasn’t come along for decades.

This Ultra Rare Oversold Signal is Undefeated

If you’ve been following market news the last couple of weeks, chances are you’ve been inundated with the latest bear-scare tactic.

The Dow Jones Industrial Average (DJIA) fell 9 days consecutively…something that hasn’t happened since 1978:

Human instinct may have you wanting to stop and stare at this equity marvel.

Just don’t stop buying stocks. History says that’s a big mistake.

Back to 1942, we were able to find 17 prior instances where the DJIA fell 9-days consecutively.

Here’s the all-important message: This ultra rare oversold signal is undefeated.

When the Dow Jones Industrial Average falls 9-days consecutively, here’s what happens next:

• 3-months later, stocks gain 4.4% on average
• 6-months later, equities lift 12.7%
• 12-months after, the DJIA gains a market-beating 18.3%

The icing on the cake is the 100% positive hit ratio 6 and 12-months later.

Don’t stop and stare…

Get in there!

Lastly, I’ll leave you with one more data-driven insight.

Working on Wall Street, I learned the seasonal tendency for stocks to rally in the final days of December.

The Santa Claus Rally typically begins a handful of days prior to yearend and lasts a little after January 1^st.

A whopping $22.9 billion of fund flows found their way into the SPDR S&P 500 ETF (SPY) on December 23^rd.

Old Saint Nick appears to be spreading the wealth:

2024 is set to end on a high note.

Now go ahead and jingle those portfolio bells!

Let’s wrap up.

Here’s the bottom line: Healthy SPY ETF volumes coupled with strong performance on December OpEx, spells healthy gains ahead for stocks.

Add to it that the DJIA fell a rare 9-days consecutively. Since 1942, this ultra rare oversold signal is undefeated.

And with that, we at MAPsignals wish you and your family a healthy and prosperous holiday season!

Lastly, join me at the Wealth365 Summit, January 13th-18th, as I present: How to Spot Big Winning Stocks in 2025

You won’t want to miss it.