It’s easier to fool people than to convince them they have been fooled. Mark Twain’s words ring loud and true in 2023, states Lucas Downey of

Against all odds, stocks are setting the stage for all-time highs. Looking back at 2022, it was a rough one. A litany of issues faced investors: Inflation raged, interest rates soared, and stock market crash fears ripped through social media like wildfire. Having any constructive narrative on stocks was dismissed as impossible and utterly foolish.

Yet here we are!

The S&P 500 (SPX) is a stone’s throw from all-time highs, less than 9% away from its peak. But that’s not the real story. Plenty of stocks under the surface of the market are in full-on bull mode. Yes, many high-quality companies have been making all-time highs all year. The crowd was convinced stocks CANNOT stage a comeback. However, from the lens of data, the current rally is much broader in scale than recent prior failed attempts. 2023 is the best stock-picking environment in years.

Setting the Stage for All-time Highs

Positioning drives stock prices. The Big Money Index (BMI) offers a real-time view of institutional appetite. When the BMI climbs, the demand for shares increases. The below chart is from 2022 through today. I’ve pointed out a couple of important themes. First, note how today we’re approaching January 2022’s all-time high of the S&P 500. Second and more important, we’ve broke above August’s peak. To the untrained eye, these market climbs appear similar, but don’t be fooled:


What’s happening at the index level reveals only a sliver of market action.  To get a true gauge of flows, we need to dive deeper. Below offers a glimpse of the daily action. The green shoots elevating stocks in 2023 appear similar to the failed rally of August 2022. Don’t be fooled, appearances can mask the true health of a rally:


How can we gauge the healthiness of a rally? One look at the sector rankings show how August was a defensive rally compared to 2023’s offensive rally. Here’s a snapshot of our sector rankings from August 18th 2022. Utilities, Energy, Industrials, Staples, and Healthcare were the magnets of inflows. On the flip-side, growth-heavy areas like Technology and Discretionary were riding in the backseat of the failed rally:


You can read what I wrote about markets back then. I prepared you for a near-term pullback in stocks, but saw healthy undercurrents in the medium to longer-term. The setup then was much weaker than now. This year’s rally is offensive, fueled by growth sectors like Technology and Discretionary:


But what really drives home that this latest uptrend has more room to go is the simple fact of what’s leading. Semiconductors and homebuilders (arguably the weakest areas last year) have been front and center in our data – against all odds. While pundits warned of a housing bust and a deeper technology swoon, MAPsignals data profiled the real narrative: Institutions were scooping up the carnage. You can see that via the inflows in the VanEck Vectors Semiconductor ETF (SMH). Early November saw the first signs of inflows all year–and it didn’t stop:


Keep in mind, this bullish action in semiconductors was such a contra move at the time. On its own was notable, but when you marry it with other unloved groups seeing green, the victory bell starts ringing. Massive amounts of money began rushing into homebuilder and construction stocks. A great proxy for this group is the iShares US Home Construction ETF (ITB):


These two groups only scratch the surface at the power of the latest rally. New leadership has emerged, setting the stage for all-time highs. The crowd continues to be stunned at the YTD performance in many stocks. But you shouldn’t be. There’s been real money put to work since November. As I like to say, don’t follow the news, follow the Big Money. That’s the true narrative.

Here’s the Bottom Line: Many investors worry that the latest rally will sputter, mimicking August of last year. A peek under the surface says that’s not so. 2023’s lift is offensively driven by growth areas like Semiconductors and Homebuilders. But it doesn’t stop there. Newer companies, under massive accumulation, are popping up daily in our data. The evidence keeps piling up that we’re in the midst of a true bull market. Don’t get fooled by headlinesThey’re seductive and rarely lead to profits.

Money Flow > News Flow

I’ll leave you with another Mark Twain quote that has significance for today, It’s no wonder that truth is stranger than fiction. Fiction has to make sense. One of the best stock market opportunities in years is happening now.

To learn more about Lucas Downey, visit