Smart Money

Does Not Compute: "Smart Money" Clients Sell Stocks For 12 Consecutive Weeks

Last week, when reporting that smart money had sold stocks for 11 consecutive weeks, we were convinced that this week the selling would finally end. It did not. As BofA reported overnight when looking at the latest trading activity by its smart money clients, last week, during which the S&P 500 was up 1.6%, BofAML clients were net sellers of US stocks for the twelfth consecutive week, in the amount of $1.36bn. Sales were chiefly in large caps, though all three size segments saw outflows.

"The Selling Just Won't Stop" - Smart Money Sells Stocks For Near Record 11th Consecutive Week

Last week, during which the S&P 500 was down 1.2%, BofAML clients were net sellers of US equities for the 11th consecutive week. Net sales of $1.7bn were smaller than in the prior week, but all three client groups (hedge funds, institutional clients, private clients) remained net sellers, led by institutional clients. Net sales were in both large and mid-caps, while clients bought small caps last week.

John Paulson's Hedge Fund Had A Horrible Quarter; This Is How Everyone Else Did

Paulson had another abysmal month in March when his Advantage funds both dropped 7%, bringing their YTD loss to -15%, and making Paulson one of the worst performers YTD, in the company of such former HF luminaries as Chase Coleman, Bill Ackman and Larry Robbins. His return since then is likely even worse, considering his substantial stake in Allergen which earlier this week plunged 20% after the Pfizer deal was called off.

Here Are The Four Reasons Why Investors Never Believed This Rally

The "smart money" have been net sellers of US stocks for the ninth consecutive week.
Investors are positioning for a market reversal based on leveraged positions in volatility funds.
Oil bulls never jumped on board the latest rally. 
The CS Fear Barometer remains elevated

Goldman Says To Sell Risk Assets, Go To Cash Ahead Of "Expected Elevated Volatility"

The latest to join in the skepticism rally is none other than Goldman Sachs strategist Christian Mueller-Glissmann who in the latest "Global Opportunity Asset Locator" report, writes that the "relief rally across risky assets might fade over the near term", warns that "sharp declines in oil prices are likely to weigh on risky assets again", suggests to go to "reduce risk allocation", warns against holding US HY bonds as "the risk/reward is least favourable if oil prices reverse course" and "go to cash" ahead of "expected elevated volatility."

Bloomberg Explains Why "Nobody Believes This Rally"

"I’m not buying anything; I’m sitting on my hands and waiting. I would definitely sell this rally because it’s totally central-bank driven and has nothing or very little to do with fundamentals."..."The question everyone should be asking is what has really changed in the last three months? Global concerns, while slightly less, are still there."

JPM: The Short Squeeze Is Largely Over

"Three quarters of the previous selling of equity ETFs during January and February has been reversed in just three weeks. CTAs appear to have fully covered their shorts. Indeed both CTAs and Discretionary Macro hedge fund managers appear to be close to neutral right now... we conclude that the short covering phase that started a month ago is very advanced."