Editor's note: Earlier this year, investors rushed into gold as fear took hold of the market. But according to analyst Ethan Goldman of our corporate affiliate Chaikin Analytics, Wall Street's "smart money" was already heading for the exits. In this issue, Ethan explains why gold's momentum is fading – and why we should keep an eye on where institutional investors are moving next...
P.S. The stock market and our offices will be closed on Monday in observance of Memorial Day. Your next issue of DailyWealth will publish on Tuesday, May 26, after the Weekend Edition. Have a safe and happy holiday.
Back in March, fear controlled the markets...
The conflict in the Middle East and Iran's de facto closure of the Strait of Hormuz fueled investor panic.
On March 24, CNN's Fear and Greed Index sat in "extreme fear" territory. And the State Street SPDR S&P 500 Fund (SPY) faced a 4% loss over the previous month.
Today, things are very different...
Since March 24, SPY has surged by about 13%. And we've watched it hit new all-time highs along the way. CNN's Fear and Greed Index has also swung into "greed" territory.
Even the world's largest physically backed exchange-traded fund ("ETF") of a traditional "safe haven" asset briefly crawled higher. But a key factor "under the hood" means there are better opportunities out there today...
The Chaikin Money Flow Indicator Caught Wall Street Making Moves
I'm talking about gold – specifically SPDR Gold Shares (GLD).
On March 24, the ETF had dipped below its long-term trend line.
But the next day, I noticed another drastic shift in GLD... Its Chaikin Money Flow indicator dipped into negative territory. This is a measure of the buying activity from the so-called "smart money" on Wall Street.
Notably, the dip into the red came after a year of almost total support for GLD from the smart money.
GLD's Chaikin Money Flow remained in negative territory for most of the past few weeks. But the ETF's share price gradually increased.
Put simply, even as the big institutions on Wall Street cashed out, GLD gradually climbed into mid-April. The ETF rallied as much as 10% from March 24. It has since pulled back again and is up just 3% since the Chaikin Money Flow turned red.
You can see the price action in the chart below...
Of course, this isn't a mistake. Our Chaikin Money Flow indicator worked exactly as it should.
But we need to look at other parts of this chart as well...
Notice that GLD shifted deeply into "overbought" territory as the share price grew – a sign that investors had piled in too quickly for the rally to last – and the smart money continued to leave.
During this movement, the fund's relative strength versus the S&P 500 Index slipped. In fact, you can see that GLD's relative strength has fallen deeply into the red as well.
Gold's incredible growth in 2025 and into early 2026 made plenty of investors a lot of money. And the metal still has some long-term, macroeconomic tailwinds behind it.
But investors' unchecked enthusiasm for gold seems to have calmed down for now. As such, the move here looks clear to me...
Look for Stronger Corners of the Market Than Gold
In plain terms, it looks like institutional investors on Wall Street took profits on GLD after an incredible run higher.
Of course, the big institutions also have their eyes on hotter corners of the markets. As the tech-heavy Nasdaq 100 Index and S&P 500 rip higher, Wall Street hunts for other places to make big gains.
That's where the Power Gauge comes in to help find these areas...
For example, our system says industries like semiconductors, energy equipment and services, and even marine transportation are all "strong" right now. So these corners of the market are full of individual stocks with "bullish" or better ratings.
Of course, I'm not saying that Wall Street's interest in GLD is over. But I'm currently more interested in areas where the smart money is piling in.
So for now, we can find better opportunities today than gold.
Good investing,
Ethan Goldman
Editor's note: Marc Chaikin has spent 60 years building one of Wall Street's best stock-rating systems. But he says there was always one critical "blind spot" he couldn't solve – until now. On May 28, he and former floor trader Jonathan Rose will unveil a new "Smart Money Super-Signal" built to spot where institutional money is moving before the crowd catches on.
Further Reading
The economic backdrop still feels shaky. Yet stocks just posted one of their strongest monthly rallies in decades. History shows that once markets begin ignoring bad news, momentum can become a powerful force... and the recent rally suggests this move may not be finished yet.
One of Wall Street's most famous bears is warning that tech stocks are headed for a dot-com-style crash. But beneath the headlines, institutional money is still pouring into large-cap technology stocks. That means the outlook for these stocks is still much more bullish beneath the surface than investors realize.