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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Thu, 04/17/2014 - 17:49 | 4670988 Bryan
Bryan's picture

Um... the dumb money?

Thu, 04/17/2014 - 17:49 | 4670989 NotApplicable
NotApplicable's picture

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

Thu, 04/17/2014 - 17:53 | 4671006 Dark_Horse
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.


Thu, 04/17/2014 - 18:01 | 4671030 Richard Chesler
Richard Chesler's picture

His name is Mr. Yellen.

Thu, 04/17/2014 - 18:09 | 4671044 Supernova Born
Supernova Born's picture

The free money is buying.

Thu, 04/17/2014 - 18:14 | 4671061 fonestar
fonestar's picture

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

Thu, 04/17/2014 - 18:54 | 4671177 max2205
max2205's picture

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

Fri, 04/18/2014 - 04:43 | 4672372 DavidC
DavidC's picture

That made me smile, thanks!


Thu, 04/17/2014 - 18:10 | 4671049 kaiserhoff
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.

Thu, 04/17/2014 - 18:15 | 4671064 maskone909
maskone909's picture

clearly Belgium has been buying everything. 

Thu, 04/17/2014 - 18:18 | 4671067 kaiserhoff
kaiserhoff's picture

Must be a good year for waffles.

Thu, 04/17/2014 - 21:02 | 4671604 TammanyBrawl
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.


Fri, 04/18/2014 - 17:59 | 4674076 spine001
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.

Fri, 04/18/2014 - 06:57 | 4672436 PT
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?

Thu, 04/17/2014 - 18:53 | 4671172 A Nanny Moose
A Nanny Moose's picture

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

Thu, 04/17/2014 - 18:56 | 4671180 max2205
max2205's picture

America strong.....phsst

Thu, 04/17/2014 - 18:07 | 4671040 DoChenRollingBearing
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.

Thu, 04/17/2014 - 18:16 | 4671065 maskone909
maskone909's picture

80% here.  liquid is the way to go. 

Fri, 04/18/2014 - 02:49 | 4672298 flyingpigg
flyingpigg's picture

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

Fri, 04/18/2014 - 00:22 | 4672122 TheReplacement
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.

Fri, 04/18/2014 - 01:15 | 4672213 tekmike13
tekmike13's picture

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

Thu, 04/17/2014 - 18:25 | 4671082 HedgeAccordingly
HedgeAccordingly's picture

This is actually a good read. no sarc

Thu, 04/17/2014 - 18:51 | 4671166 A Nanny Moose
A Nanny Moose's picture


Thu, 04/17/2014 - 19:07 | 4671208 Stoploss
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???

Fri, 04/18/2014 - 10:11 | 4672857 AmCockerSpaniel
AmCockerSpaniel's picture

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

Thu, 04/17/2014 - 17:53 | 4671003 Mr Pink
Mr Pink's picture

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

Thu, 04/17/2014 - 19:11 | 4671220 Leaping Lizard
Leaping Lizard's picture


Fri, 04/18/2014 - 12:14 | 4673200 Alien 851
Alien 851's picture

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

Thu, 04/17/2014 - 19:41 | 4671352 The Axe
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

Thu, 04/17/2014 - 22:27 | 4671821 TheRideNeverEnds
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.  

Fri, 04/18/2014 - 08:12 | 4672539 Iam_Silverman
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.

Fri, 04/18/2014 - 00:47 | 4672164 SAT 800
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.

Thu, 04/17/2014 - 17:50 | 4670992 db51
db51's picture

I'll go with All of the Above.

Thu, 04/17/2014 - 17:51 | 4670997 kchrisc
kchrisc's picture

The Muppets.

What did I win?!

Thu, 04/17/2014 - 17:52 | 4671001 buzzsaw99
buzzsaw99's picture

does this mean that amzn common is a good deal?

Thu, 04/17/2014 - 17:54 | 4671008 ebworthen
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.

Thu, 04/17/2014 - 17:56 | 4671010 buzzsaw99
buzzsaw99's picture

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

Thu, 04/17/2014 - 18:11 | 4671055 kaiserhoff
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.

Thu, 04/17/2014 - 22:07 | 4671843 VegasBob
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.

Thu, 04/17/2014 - 17:57 | 4671014 I Write Code
I Write Code's picture

Janet 5

Thu, 04/17/2014 - 22:08 | 4671846 VegasBob
VegasBob's picture

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

Thu, 04/17/2014 - 17:58 | 4671019 wmbz
wmbz's picture

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

Thu, 04/17/2014 - 18:03 | 4671024 sixsigma cygnus...
sixsigma cygnusatratus's picture

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


Thu, 04/17/2014 - 18:02 | 4671031 Goldilocks
Thu, 04/17/2014 - 18:04 | 4671038 danster82
danster82's picture

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

Thu, 04/17/2014 - 18:08 | 4671045 Chuck Knoblauch
Thu, 04/17/2014 - 18:09 | 4671048 Unknown Poster
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?

Thu, 04/17/2014 - 18:41 | 4671137 Money_for_Nothing
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.

Thu, 04/17/2014 - 18:51 | 4671167 Unknown Poster
Unknown Poster's picture

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

Fri, 04/18/2014 - 22:45 | 4674802 MrSteve
MrSteve's picture

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

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