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Smart Money Preparing For Sell Off Like Never Before
Zero Hedge readers already know that in the latest week the insider selling to buying ratio hit unprecedented levels. Obviously, corporate officers and insiders have decided to take advantage of the artificial wealth effect and bail, especially since it is still unclear whether capital gains taxes will be the same in the following year. However, it is not only insiders who see between the lines. As the following charts demonstrate, the smart money is now either bailing from the stock market in droves or hedging for a market crash like never before...
First, from Sentiment Trader, here is the put/call ratio. Self-explanatory:
From the same source: the Commitment of Trader report of commercial (not speculative) NDX hedgers. Also self-explanatory.
And lastly, tieing it all together: the cash at mutual funds. Or, more correctly, lack thereof.
The simple observation: dumb money continues to be at near record bullishness (IBD, AAII surveys), gold market timers are only 40% in, the smart money is short/hedged in size like never before, mutual funds have the lowest cash level on record, and have experienced 29 consecutive weekly outflows which have so far been compensated for broad NAV declines through artificial price increases: that will very soon end. We have heard through sources that following last week's HF insider trading probe redemption requests at many of the implicated hedge funds* have gone through the roof. They will all have to sell some/many of their liquid holdings into the year end. Our only question: aside from the Primary Dealers, the HFT momentum traders who have no balance sheet, and the Federal Reserve: who is there to buy?
* We would like to point out that we were contacted by Maverick in regards to our post on Gasparino's report that Maverick Capital, Ltd. received a subpoena earlier this week. According to Maverick they have, in fact, not received a subpoena.
And as a reminder, here is the latest insider selling to buying table:
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Hallelujah....by Aliqua...
http://www.youtube.com/watch?v=QOeSFFShDkM
I don't know about anybody else here but I paid for all my Chinese crap.
And if they were stupid enough to by Treasuries to bad screw them.
By definition, a hedger is someone who is either long stocks and short futures or short stocks and long futures. Either way, he is hedged -- immune from market volatility. The hedger is always net flat. He can't be net long or net short or he wouldn't be hedged.
Why the dump on Prechter? He's correctly called nine out of the last three recessions.
Mustn't allow stocks to revert down to fair value while holiday shopping is the order of the day.
but THERE IS a growth industry:
word-crafting "refudiation"
http://voices.washingtonpost.com/44/2010/07/palin-invents-word-compares-...
lets see, if the crash comes BEFORE the new year...i can tak tax-loses and carry over...2011 wash-sale...hum...does THAT REALLY make sense??
"refudiated.."
Starting to see more bumper stickers now that read:
" 2012 end of an error"
Pretty funny...
Everything is going according to the plan to chase every investor in the world out of the equity markets and into shiny gold and worthless paper leaving the market wide open for acquisition for the mere cost 1 days printing.
If you're not in the market what are you into?
Gold and Paper
Everything is going according to the plan to chase every investor in the world out of the equity markets and into shiny gold and worthless paper leaving the market wide open for acquisition for the mere cost 1 days printing.
If you're not in the market what are you into?
Gold and Paper
Let just see where Monday goes.
Looks like a lot of, 'fundamental analysis.'
Shadows, Pools, and Count Bernank, are all that matter. No accounting, no free price discovery = no fundamentals or historical precedent.......there is only, 'the Count!' Just follow the cape....if you smell garlic, or see someone approaching him with a wooden stake, then you can prepare for a fall, otherwise, 'The Bernank,' is immortal.
I do hope he fails, but I don't invest on hopes.
Seems to me that, if we see this plunge in stocks coupled with a serious decline in bond prices, precious metals and the dollar will be the beneficiaries. Am I right? I think we saw this pattern on the one or two days of >1.5% S&P declines in October, didn't we?
A visual examination of the correlation btw S&P and the put/call ratio says it's POSITIVE. There's a simple, non-hyperventilating explanation: mkt goes up, people hedge more with puts.
Sorry to rain on your parade, folks.