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Charting The Great Bear Market Fund Flow Vacuum
Many skeptics enjoy pointing out that the fear and loathing toward stocks as exhibited by the seemingly endless mutual funds outflows, now in the 18th consecutive week, is nothing but a contrarian play, and when the masses are stepping out is when the smart money should invest. Under other circumstances we would totally agree. However, in this case, we make the argument that it is in fact these "contrarians" (with the assistance of the Fed, the Primary Dealers, and the HFT scalpers) who have ramped the market in advance of this move for many months now, anticipating an inflow which never comes. In other words, the true contrarian move is to fade the market here. Why? Because as the below chart from ICI shows, stocks have experienced the biggest short-term equity return upswing in history on the smallest net amount of positive inflows also in history (which incidentally has now turned negative). The argument would go that the entire upswing is nothing but an engineered push on nothing but momentum, and QE, and that fair values are far, far lower. Once GDP passes below zero, and once S&P EPS forecasts are revised to +/- 60, as the double dip unwinds, and applying an appropriate multiple of 10-12x, the market will be far more credible, and will see far more inflows when it is at 600-700. For now, however, nobody is foolish enough to enter. And those buying on hopes that Joe Sixpack will finally put in his two remaining cents in Amazon will continue to be disappointed, entrusting their entire risk capital to the like of the Federal Reserve, Goldman and Getco.
We wish them all the best.
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*Cough* *Splutter*
The FUMES, the fumessss..
what's fascinating now is that the second, the second, they take away the "push", the market starts moving down....
and the second they take the hammer off the HUI, those damn gold and silver stocks rise....
this is not the way it is supposed to be, the public is supposed to be too damn stupid to be moving into that sector of all things!!!!
they are supposed to be buying AMZN...at 141...and taking it off our hands!
So who exactly are the insiders going to sell to? Is this why they want to privatize Social Security - the ultimate dumb money?
Yup.
Tyler, you should change your name to Freddy... Krueger that is, b/c your one scary guy! And I think the one thing that will save the wise from losing their shirts is "Fear"... I'll have nightmares about that chart. All you need is some serious Beethoven to come on when some one clicks to maximize the chart and some body will cry, I promise.
Thanks.
Speaking of bear markets...
How about that gold market action today?
Don't worry, this isn't the breakdown just yet.
oh, give me a break, johnny. anyone who knows you (has been reading your stuff) knows you been losin' your shirt boy with those shorts....
LOL. Even if I went short at 1220, I'd be down 2.4%
That hardly counts as "losing my shirt."
Every other call I've made has been right.
Meanwhile, what do you say to somebody who is buying gold at above 1300 right now, with prices at 1250?
They're down 50 bucks. I'd be down 30. Are they losing their pants too?
You were leveraged 10x, John Boy. It was too boring otherwise, remember?
John Boy can't do math. He thinks an American Gold Eagle is worth the same as an ounce of gold somewhere inside a 400 oz good delivery bar. Yet he pays a "premium" for bread rather than purchasing one loaves' worth of wheat off of the commodities exchange. What a rube, overpaying for bread like that.
Classes done for the day JB?
I heard you received an atomic wegie yesterday. Thank God someone took pictures.
An atomic wedgie?
Is that what presenting sound arguments and hearing "you're insane" again and again entails?
You're wrong, CD!
See, I won the argument! You got SMOKED buddy!
I can post four articles from all mainstream sources that back my position.
I can post stock charts with obvious technical analysis that backs my position.
The reply?
DERRRNHH!!! YOU WORK FOR THE ANTI-GOLD MEDIA CONSPIRACY, NADLER!!!!11!!!!1
LOL at getting a wedgie from these idiots.
Wait until the latest wedge breaks down in gold. We're in wave 5 now, so it shouldn't be too long. I've been saying October, but it might stay in the wedge until November, if bugs are lucky.
BTW, each of the Fast Money traders were bearish on gold today.
I don't think many people on this board are "trading" gold. They are investing in it, or even better yet saving in it. $20 swings don't mean much.
For me, either gold goes to $5000 or it goes to $500. I just don't care that much. Until I need to use it or give it to my kids.
It's an investment outside of the Ponzi. I like those...
They change their positions from day to day essentially.
The article I posted from them yesterday was bullish.
It's going to swing more than 20 dollars when the wedge breaks down.
Of course, I don't expect any props for the call when it happens.
Buying something at north of 1300 that is currently worth 1250 isn't really "investing" to me. Not that you do that, but that tmosley fella does.
Why do you call yourself traderjoe if you are really investorjoe?
Johnny Bravo,
Can you write some prices down so we can hold you to them in October.
Let's try this: what is the price of Gold going to be this December 2010?
I'll play.
As I've mentioned countless times before, gold will trade at 1350 by Halloween and 1500 before 12/10/10.
He's a coward, so he won't. Every number he ever posted on gold has been wrong. Hell, even his hindsight is legally blind. He thinks the dollar was at todays levels in 1985. He repeats that over and over like that will make it true, when the lowest it ever was that year was around 136.
If I was buying gold I would use your rational traderjoe.
Yeah tell them Jonny! just beacuse you were totally wrong, that doesn't mean you should stop spewing total nonsense like I do. Heck I called for gold 200 am stiill the
"anal yst" for Kitco
Maybe people are liquidating to pay their bills/get out of debt?
That was Denninger's take on it yesterday. This is not retail investors moving out of stocks into bonds - it's retail investors liquidating MF and stock accounts to pay bills. Baby Boomers are first in line there. They have to start getting safe with whatever they have left.
Absolutely. Seen it in my personal circle friends/family. Combined with a bunch of folk living effectively rent/mortgage free (pending foreclosure) yet and continuing to spend, makes me wonder what a 'sustainable' PCE might really be. Thanks for the graph TD, very enlightening.
Is it Karma that the clueless might finally be those who consider themselves the masters of the universe and have snickered at the "dumb money" for decades.
bingo.... Comex closed. time to make the donuts, and buy the gold.
would highly reco looking at AUY, testing its long-term trend line, and where the cartel is now doing its best to chase the peasantry out.....
can't have the peasants holding this....not this.....they must be fully invested in AMZN, or better yet, GE or BAC.....
out, out little scumlets...you aren't allowed to own anything of actual value.
To help fund the deficit, maybe we should begin charging an 'exit' fee and have Slater man the slides.......:>)
From a recent Casey's edition of "The 5" ...
"Insiders at Wall Street firms are dumping company stock left and right. Officers and directors at Goldman Sachs, JP Morgan Chase, Citigroup and Wells Fargo have sold $100 million of stock this year -- about five times as much as they’ve bought.
This may be a case of guys taking profits after buying at the bottom; that’s the take of InsiderScore, the firm that analyzed the SEC filings of these insider transactions. But what does it mean when just three senior executives in Goldman’s compliance division sold $11 million in stock? (Nothing at all, Goldman says.)"
No surprise. What does actually the Volcker rule mean ? Getting rid of the proprietary groups. Means less revenue. Means less profit for Wall Street. You should be luck that these banksters have not the chance anymore to frontrun you and me.
I found this video about idiots driving on snow (ice) and I realized that it makes me feel the same way I feel when I read Zero Hedge.
Stick with it til "help" arrives.
http://www.youtube.com/watch?v=Qg2QKDFRads&NR=1
Man I have seen some nasty charts on this site but that one probably takes the cake..
I reckon so.
It would be nice to have more complete data. Being mistrustful of wall street and government funded data, ICI is not my first choice and certainly not a sole source.
One really needs to aggregate the mut data with hedge fund data, separate account data, ETPs, buybacks, brokerage account, and private funds to get the real scoop on flows and price levels.
Fading the crowd is contrarian. Is the crowd measured by the number of participants or their aggregate position size? Perhaps, its some hybrid or behavioral derivative.
I keep getting the nagging feeling that large "retail" flows for the most part follow ten year performance numbers and that one needs to look at what is falling off the back of the period just as much as what one expects moving forward.
Muts: you are required to make buying and selling decisions before you know the price and you are not allowed to use stop or limit orders. I guess you have to have a "different" kind of perspective to operate in that market.
-profd
Haven't you figured it out yet? Joe Sixpack is irrelevant. Joe sixpack never returned to the market after the internet crash. American Joe Sixpack's chinese cousin is the new "Joe Sixpack"
Thank u, i found this for a long time.
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