Stock Markets Analysis: A Weak-Handed Exit

The saga showed how quickly markets can react and readjust.

Some of the biggest stocks out there – global, household names – dove hard. Things got ugly for a bit.

But for long-term, data-based investors, DeepSeek’s shake out was a gift because it revealed the “weak hands.”

A Weak-Handed Exit

By “weak hands,” I mean investors who lack conviction in their trades. Basically, they see an opportunity on Wednesday but then see a disaster on Thursday and sell off.

In this latest iteration, these traders probably bought into AI late last year, then were spooked early this year when things got chaotic. These “last in, first out” traders just pulled off a weak-handed exit.

But here’s the thing – Big Money kept buying throughout the carnage. That data provided bullish conviction.

When the Big Money Index (BMI) is heading higher, my bullish stance is grounded and backed by years of money flows. And the BMI is rapidly gaining, proving that money is being put to work:

As the chart shows, in two weeks, the BMI rose from 37% to 51%. That reflects Big Money accumulation.

Beaten to a Pulp

So Big Money bought, but some stocks were slaughtered? Yes.

Technology stock liquidations were strong after the DeepSeek announcement. Many of the hottest names and industry groups were beaten to a pulp.

For instance, using the VanEck Semiconductor ETF (SMH) as a proxy, we can see semis had one of their steepest daily declines in years, crashing 9.8% on Jan. 27. Using another popular ticker as a proxy, the bellwether semiconductor stock NVIDIA Corporation (NVDA) slid 17% that same day.

On the surface, it felt like doom was not just near, but here.

However, acting on emotions is rarely profitable. It’s better to use cold, hard data as a guide. And when possible, dive deep – index-level analysis is the tip of the iceberg.

Big Money was Buying

As the weak hands panicked, MAPsignals data noted healthy accumulation.

From Jan. 27-29, there were 225 Big Money buy signals versus 112 sell signals. That’s twice as many buys as sells, all during “doom.”

Money rarely exits markets, it simply rotates. You can see Big Money was buying across the board:

The sectors that attracted heavy capital inflows were technology, health care, and discretionary:

The MAPsignals stance that Big Money buyers are after high-quality names, particularly in the technology sector, is strengthened by the DeepSeek situation.

Of course, sitting through the wreckage wasn’t fun. But that’s part of being an investor.

Under the surface, it’s clear Big Money is chasing high-quality stocks in a handful of sectors. You can’t tell that from the gloomy DeepSeek-related headlines, but you can with a MAP.

Even though some assets dipped, the BMI is lifting. It’s the weak hands waving goodbye!

If you’re a serious investor, Registered Investment Advisor (RIA), or a money manager looking for hedge-fund quality research, get started with a MAP PRO subscription today.