If The Smart Money Is Selling, Who's Buying?

Tyler Durden's picture

Based on Bloomberg's Smart Money Flow indicator, there is a very significant amount of distribution going on... the question is just who is soaking up the smart money selling? Company buybacks, Johnny 5, or a greater-fool retail investor?

 

 

Perhaps this chart from Lance Roberts at STA Wealth provides some color for who?

 

However, the idea that individual investors are still "out of the market" should be taken with a bit of caution. The chart below is data compiled by the American Association of Individual Investors (AAII) which surveys it membership on portfolio allocation.  The data is compiled and released monthly. 


 

With cash hovering at the lowest levels since the "Tech Wreck," and equity exposure at the highest, investors are more than just "warming up" to equities. They are effectively "all in" with respect to the financial markets.

 

Chart: Bloomberg

 

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Bryan's picture

Um... the dumb money?

NotApplicable's picture

That would be US! (by proxy, of course)

Dark_Horse's picture

 

It's the Algo's, swapping back and forth.

If they ever get together and collude, we're in real trouble.

Dark_Horse

fonestar's picture

Even fonestar is not buying... and he's not very smart.

max2205's picture

Yelling buying....will own 70% of the market by 2016....bichzzz ain't going down...Spy that is

DavidC's picture

fonestar,
That made me smile, thanks!

DavidC

kaiserhoff's picture

Good question, but the answer should be obvious from the continuing discussions here. 

Real volume is lower than a snake's navel in a wagon rut.  There isn't much action except the 3:30 ramp.

And, of course, we all buy, through our mostly indexed pension funds, like it or not.

maskone909's picture

clearly Belgium has been buying everything. 

kaiserhoff's picture

Must be a good year for waffles.

TammanyBrawl's picture

Belgium has just been crushing it lately. Buyin' shit like it's cool! Now I know where all the missing German gold is.

If they were buying guns, ATF would arrest them for straw purchases. Oh wait.. if you're a government that's okay.

Mmmmm.....stroepwaffles!!

spine001's picture

I'll explain it again. Euronet operates from Belgium. The EU though its proxy national banks buys treasuries, then posts them as collateral to borrow dollarz from the FED with which it buys more treasuries and so the cycle of infinite Ponzi goes on and on, the only limit is the rotation speed of the paperwork needed to enable each cycle to complete.

PT's picture

Yes, all that compulsory superannuation money has to go somewhere.

How do you guarantee quality when you're forced to spend?  Shouldn't it be possible to walk away if there are no good deals on the table?

A Nanny Moose's picture

OK...who "talked" about Fight Club to Mr. Yellen?

DoChenRollingBearing's picture

 

 

If CA$H is so low, that would be a smart thing to hold, real physical FIAT$.  

"Buy and hold gold" is getting repetitive from The Bearing Guy, but I would have a solid core position in gold (5% minimum, that beats over 99% of other Americans).  I have no problem with up to 20% - 25% of one's wealth in gold.

Disclosure: I am at some 11% - 12% depending on daily Au price movements.

maskone909's picture

80% here.  liquid is the way to go. 

flyingpigg's picture

Liquid stuff can vaporize, I prefer hard assets.  :)

TheReplacement's picture

Don't forget silver, brass and lead, steel, coffee and any other import or non-local food or everyday item like TP for your bungholio.  Nobody knows to what level things will sink.  Best to be prepared for each level or stage and hedge with things like knowledge that will be useful in as many levels as possible.

tekmike13's picture

Hey, Roller; Why not go 80% AU/AG? That's where I'm at. What should I fear?

HedgeAccordingly's picture

This is actually a good read. no sarc

Stoploss's picture

The allocations are fucked up. Why in 2008 did bond allocations continue to rise with the market? They clearly were moving inverse as they should have been prior to 2008.

The last six months show something peculiar as well.

Could it be.....

 

 

 

 

The motherfucking FED???

AmCockerSpaniel's picture

The proxy here is the Fed. They will buy every month! Or; So they say.

Mr Pink's picture

Your 401k! Where else is all that money supposed to go??

Alien 851's picture

Think Wizard of Oz, the curtain is Belgium, who is Oz?

The Axe's picture

I missed the greatest opportuntiy  long 50 CMG 560 at a buck  sold them for a 10,000 profit     worth 400,000 at the close     I might be the next dude to jump

TheRideNeverEnds's picture

Must not be very smart considering they are missing the next leg of this up-move and the push past 2000 in the SPX this year.  

 

I guess nobody told them about the green chutes and how this time is different; you'd think if they were smart they would realize we have reached a permanent high plateau, a new paradigm if you will.  

Iam_Silverman's picture

"I guess nobody told them about the green chutes"

Green chutes, as in parachutes?  In case you are forced to jump?  Or green chutes, such as the color of your poop chute after having FRNs crammed in there for too long?

Me?  I'm waiting for some real green shoots, such as the beans and melons I planted already.

SAT 800's picture

Greater Fool Retail; always. it's the way markets work. Also, they're nervous, and when it doesn't make any sigficant new highs, they'll bail again. It's a dying momentum market.

db51's picture

I'll go with All of the Above.

kchrisc's picture

The Muppets.

What did I win?!

buzzsaw99's picture

does this mean that amzn common is a good deal?

ebworthen's picture

Ooops, getting suckered again.

Legions of University and State employees being told at brown bags and TIAA-Cref/Fidelity broker propaganda sessions to "buy stocks for the long term".

Like shooting fish in a barrel for those people.

buzzsaw99's picture

cref used to have a decent reputation these days it is shit. imo dumber than calpers but with higher fees.

kaiserhoff's picture

Tell me about it.  And very few sane options once you are in.  Most of the State plans are shit, but we made that decision years ago, so it really doesn't matter.

VegasBob's picture

I started exiting from TIAA-CREF shortly after the 2009 lows.  I didn't see any point to putting up with zero interest rates on stuff that had been paying around 6% since the late 80s.

VegasBob's picture

Screw Janet.  Oh, I take that back. Not even with a paper bag!

wmbz's picture

Cramers , Fools rush in crowd. BUY,BUY,BUY, Damnit. Here we go...DOW 18000!

sixsigma cygnusatratus's picture

"They are effectively "all in" with respect to the financial markets."

...tick...tick...tick...

danster82's picture

If the dumb money is not buying the smart sells, then the smart money cannot be smart.

Unknown Poster's picture

The "smart money" flows seem to believe the taper story. Mid December, what happened then? Is the smart money really that smart?

Money_for_Nothing's picture

The taper story was put out because QE is having less and less positive effect. By putting out the taper story they averted an immediate panic. QE is expanding if anything.

Unknown Poster's picture

QE is detrimental. You can't fix a burst bubble by blowing another one.

MrSteve's picture

QE is expanding by FED buying long duration bonds, not short term. This calms the entire bond market.