Information leaks... The "smart money" buys ahead of major announcements... And analysts at the biggest investment banks have unprecedented access to what's happening. That's just how the world works. There's no getting around it.
Editor's note: Today, we're giving you a classic "peek behind the curtain" of the Power Gauge...
As regular readers know, Chaikin Analytics founder Marc Chaikin says the Power Gauge is the culmination of his life's work.
The system combines more than five decades' worth of data-driven market research. And it packages it all into actionable information for every stock or exchange-traded fund that it processes.
If you've been following along with the Chaikin PowerFeed for a while, you might recognize today's essay. We've published it a few times over the years. But as you'll see, it's a timeless message on one of our system's most important factors...
This Is Like Sitting In on Private Board Meetings
By Marc Chaikin, founder, Chaikin Analytics
Information leaks... The "smart money" buys ahead of major announcements... And analysts at the biggest investment banks have unprecedented access to what's happening.
That's just how the world works. There's no getting around it.
Now, don't get me wrong...
I'm not saying the reign of the "insiders club" is the way it should be. But it's the system we have.
The U.S. Securities and Exchange Commission has done a lot to clean things up over the years. But the investing world remains far from perfect.
That's why, early in my career, I developed an indicator to track the smart money. It's called the "Chaikin Money Flow."
And today, I'll share a bit about this powerful tool...
Marc Chaikin's Power Gauge flagged 44 of the top 50 stocks of 2024 in advance of their massive gains. Now, he's stepping forward with a must-see market prediction for 2025... driven by a rare signal – with 93% historical accuracy – he has never shared before. Includes two free recommendations (tickers included). Click here to watch – before it goes offline.
Elon Musk claims a terrifying new economic force will put millions of Americans out of work. The ripple effects could nudge the U.S. economy into a catastrophic tailspin. If this happens, you need to be prepared. That's why a former Trump adviser is sharing his contingency plan with the public. What is Musk talking about? Get the full details now.
I developed my proprietary Chaikin Money Flow indicator way back in 1982. And to be honest, I'm amazed that it works as well as it does 42 years later.
Obviously, I believed it would work when I built it. But what I mean is...
I didn't realize the tool would soon become such a major "stock analysis cheat code."
You see, the Chaikin Money Flow indicator works so well that hedge funds and billionaire investors now use it. It's even built into the Bloomberg Terminal. And Bloomberg's biggest competitor (Thomson Reuters) uses the indicator, too.
This tool focuses on what I call "accumulation."
The concept is easy to understand...
We want to know what the smart money is doing. "Accumulation" is simply the word for that. And as an investing tool, it works better than you might imagine.
Knowing what hedge funds and billionaires are doing with their money is like sitting in on private board meetings. This was made incredibly clear to me around 1989...
At the time, soft-drink maker Coca-Cola (KO) wasn't a popular stock.
The company had released "New Coke" in 1985. As you might remember, the wackos in management tinkered with Coke's formula to try to make it more appealing. They basically force-fed it to consumers.
But of course... the public didn't really want New Coke.
The whole thing bombed. Within three months, Coca-Cola went back to its original formula. And the event went on to become one of modern history's most famous marketing disasters.
Well, in the late 1980s, I noticed something odd in my analysis...
Coca-Cola's stock was accumulating money behind it. And importantly, the accumulation was persistent.
I learned early on that persistency matters. You don't open a position of 23 million shares overnight, after all.
That's how many Coca-Cola shares legendary investor Warren Buffett bought when he established a position through his holding company Berkshire Hathaway (BRK-B). And I spotted that persistent accumulation by using the tools I had developed in my career.
It was an amazing feeling. I had uncovered Buffett's massive position before it became public, just by watching as a ho-hum stock accumulated cash behind it.
Coca-Cola went on to become one of the best-performing stocks of the next decade. It returned around 27% per year over that span, roughly doubling the overall market.
Simply put, using the Chaikin Money Flow indicator can help you track the smart money in the market.
It's like sitting in on private board meetings. And it's a tool that helps level the playing field with Wall Street.
Good investing,
Marc Chaikin Editor's note: In Marc's Smart Money Trader publication, he leverages the Power Gauge to pinpoint the buying patterns that indicate "smart money" accumulation. That means leaning into his namesake Chaikin Money Flow indicator – and the specific "buy" signals in the Power Gauge that relate to it.
In fact, we've put together a special offer for access to Smart Money Trader and our one-of-a-kind Power Gauge system. If you aren't already a subscriber, get all the details here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.08%
8
13
9
S&P 500
-0.01%
64
257
175
Nasdaq
-0.45%
21
48
31
Small Caps
-0.43%
376
1018
511
Bonds
-1.51%
— According to the Chaikin Power Bar, Large Cap stocks are more Bearish than Small Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
-2.33%
Discretionary
-2.66%
Utilities
-3.0%
Staples
-3.1%
Health Care
-3.33%
Financial
-3.53%
Industrials
-4.01%
Communication
-4.63%
Materials
-6.08%
Real Estate
-6.86%
Energy
-7.08%
* * * *
Industry Focus
Pharmaceuticals Services
0
19
24
Over the past 6 months, the Pharmaceuticals subsector (XPH) has outperformed the S&P 500 by +2.60%. However, its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #20 of 21 subsectors and has moved down 4 slots over the past week.
Indicative Stocks
ANIP
ANI Pharmaceuticals,
ZTS
Zoetis Inc.
AXSM
Axsome Therapeutics,
* * * *
Top Movers
Gainers
DRI
+14.74%
ACN
+7.06%
GEV
+4.94%
UAL
+4.47%
PLTR
+3.79%
Losers
LW
-20.1%
MU
-16.18%
VRTX
-11.37%
CTAS
-10.57%
AMTM
-6.89%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
CCL
GIS
MU
No earnings reporting today.
Earnings Surprises
NKE NIKE, Inc.
Q2
$0.78
Beat by $0.15
CTAS Cintas Corporation
Q2
$1.09
Beat by $0.08
ACN Accenture plc
Q1
$3.59
Beat by $0.17
FDX FedEx Corporation
Q2
$4.05
Beat by $0.12
FDS FactSet Research Systems Inc.
Q1
$4.37
Beat by $0.09
* * * *
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Any brokers mentioned constitute a partial list of available brokers and is for your information only. Chaikin Analytics, LLC, does not recommend or endorse any brokers, dealers, or investment advisors.
Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation.
This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.
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