2024 Bear Market Prediction: Follow the Institutional Money
I predicted the bull market of 2023; now I believe it's time to liquidate stocks.
They say follow the money, right? That means finding out what the big institutions are doing.
One great way to do that is with the Chaikin Money Flow indicator. Robert Chaikin has accurately predicted so many major market turning points, in numerous stocks, and other asset classes. You, too, can use his indicator to do so.
How Chaikin Money Flow WOrks
Here is how it works: it follows the institutional money flows. If institutions are buying, then you want to be be buying. If institutions are selling, then you want to be selling.
All you have to do is look for divergences between price and money flows. See the charts below. So, what are institutions doing?
Institutions are Selling to At-Home Investors
Institutional dollars have fled the market as at-home investors entered the market. In other words, the unsophisticated investors are the ones buying stocks from the institutions who are quietly selling 🤫
Money Flows are a Predictor of Market Activity
The Chaikin Money Flow predicted the following bear market / collapses:
2000 - August “Dot Com” Bubble Top
2007 - October top - “Mortgage Crisis” top
2018 - October top - Interest Rate top
2020 - January top - Covid Top
2022 - January top - Interest Rates Recession
Now, we are at a DOUBLE TOP with the January, 2022 highs… but on very weak money flow….
Here is the Dot Com Bubble - double top on declining institutional money flows.
My Strategy in 2024: Playing it Safe, Taking Gains
I am on the defensive. There is ALWAYS opportunities to buy - why buy now when the market has no underlying strength? I’m waiting to buy when institutions jump back in the market. And being on the side of the institution is the path of least resistance to success, so why not?