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The Great(est Fool) Rotation: Who's Buying, And Who's Selling?

Tyler Durden's picture




 

We could yarn on for hundreds of words discussing the ins and outs of falling volumes and record-er highs in US equity markets as Treasury bond yields collapse, macro- and micro-fundamental data slumps, and the total nonsense with regard to 'cash on the balance sheets' when it is all levered to the max. But when it comes to showing just who is buying the hope... and who is selling the hype, the following chart from BofAML sums it all up... institutional clients sold the most since January and the 4th most on record in the last week as retail clients continued their buying streak.

 

Institutional clients are dumping equities off to retail clients... thank you very much...

 

Last week, during which the S&P 500 was down 0.1%, BofAML clients were net sellers of $1.5bn of US stocks following a week of net buying.

Net sales were chiefly due to institutional clients, who have now sold stocks for the last five consecutive weeks and are the biggest net sellers year-to-date. Net sales by this group last week were their largest since January and the fourth-largest in our data history (since 2008).

Hedge funds were net buyers for the fourth consecutive week, and private clients also continued their net buying streak.

 

Source: BofAML

 

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Thu, 05/01/2014 - 15:51 | 4717393 newsguy68
newsguy68's picture

Convicted Hacker “Weev” To Launch New Hedge Fund To Bring Down U.S. Banks 

 

http://commoditiefutures.com/convicted-hacker-weev-to-launch-new-hedge-f...

Thu, 05/01/2014 - 16:02 | 4717439 wee-weed up
wee-weed up's picture

The only thing to remember...

Is that the big banksters are doing exactly the opposite...

Of what they are telling their customers to do!

Thu, 05/01/2014 - 21:57 | 4718531 Soul Glow
Soul Glow's picture

Is that why Goldman Sachs refers to their clients as muppets?

Fri, 05/02/2014 - 02:05 | 4718986 asdasmos
asdasmos's picture

http://isaacbrocksociety.ca/2014/05/01/1001-names-in-latest-federal-regi...

 

1,001 Renounced US citizenship in Q1 alone.....

Thu, 05/01/2014 - 22:04 | 4718557 BeanusCountus
BeanusCountus's picture

Wish I could say this reinforces my belief. But "institutional" investors are no more likely to know more than anyone else. I'll stick with my own gut feeling as a "retail" investor and keep selling 10% of my holdings with each new all time intraday high. Only two tranches left. We'll see how it goes.

Thu, 05/01/2014 - 22:23 | 4718639 Soul Glow
Soul Glow's picture

Institutions have the same analysts that hedge funds have.  It's an even playing field unless you have the Treasury Sec on speed dial.

Fri, 05/02/2014 - 05:56 | 4719092 SoDamnMad
SoDamnMad's picture

Correction:  He has YOU on his speed dial.

Thu, 05/01/2014 - 22:25 | 4718646 Four chan
Four chan's picture

the banks own this market with the zirp cash they got for their toxic mbs which ultimately

the fed is going to stick the us taxpayer with. what is it now four trillion and counting fast?

Thu, 05/01/2014 - 22:31 | 4718659 Ham-bone
Ham-bone's picture

25% of total income toward rent is considered a normal and historic portion...

consdier...the bottom 40% of US households pay a minimum of 41% of their after tax income on rent/utilities.

Average rent in US = $9,192/yr; multiply 20% to rent for utilities, etc. (average total cost of rent/utilities = $11,030) Average income for 2nd quintile (40%-21% of US households) $29,700 and take off 10% for SS, medicare, sales taxes, etc. assuming this set pays little to no Federal / state / property taxes (40% household income = $26,700) .

Sustainable???  The stuff of bull markets???

Also consider the amount of SS, welfare, disability, section 8, etc. neccessary for those in the bottom 20% making average of $11,500 household income???

Thu, 05/01/2014 - 22:31 | 4718673 Soul Glow
Soul Glow's picture

The consumer is tapped out and government spending minds the gap.  What else is new?

Thu, 05/01/2014 - 22:37 | 4718688 Rubbish
Rubbish's picture

Did I miss Tyler bringing up Morgan Stanleys call of $1138 gold?

 

http://www.mining.com/morgan-stanley-gold-price-wont-see-1300-again-92623/

 

What was the consensus here? Will they be able to drive it down there?

 

Inquiring Gold Bitchez want to know.

Thu, 05/01/2014 - 22:42 | 4718700 Soul Glow
Soul Glow's picture

I for one admire their pompous actions - in the way we admire Ghangis Kahn, Alexander the Great, and Napolean - when it comes to shelving bonds at all time highs (vs yield), bringing equity back from the dead, and maintaining low prices in precious metals.  If only they could get oil down below $80/b, then maybe, maybe I would say they won.

Maybe.

Thu, 05/01/2014 - 23:11 | 4718763 BeanusCountus
BeanusCountus's picture

Right on the money in my book. And not just the "average" consumer. If the household brings in $100k, much higher than the "average", there is nothing left after normal expenses. Can't see how this "recovery" can continue like the media blabs every day. Would short this market but dont have the guts to fight the crazy up, up, up that is coming from "somewhere". America as a whole is broke.

Fri, 05/02/2014 - 00:22 | 4718881 Battlecom1
Battlecom1's picture

If you have 100k household, and you cannot meet your "normal" expenses comfortably, I suggest you review what is considered "normal" in your life.  Food for thought.

Fri, 05/02/2014 - 04:28 | 4719044 AldousHuxley
AldousHuxley's picture

In San Francisco, tenured bus driver makes $90k/year....

no, 100k will not meet "normal" expenses for a family of four when the bottom feeders are inflating cost of daily necessities including housing and food.

 

25% federal tax

- 9% state tax

- 9% FICA old people tax

- 9% sales tax

===50% goes to taxes

$50k left 

- $20k rent for 1 bedroom

$30k left

- $6k for food

$24k left

- $5000/year healthcare premiums+copays/coinsurance for a healthy family routine checkups

$19k left

- $3k for a car or public transit to get to work

$16k left

- $12k for child care of 1 kid if your wife works so that she can keep her job

$4k left

- $3k for student loans for good 10 years

- $1k for houshold stuff like tooth paste, bedding, clothing

$0 left

 

no money for retirement, or savings to put down as downpayment, or a replacement car without a loan, or saving for kid's college (which should have been included in taxes, but in US you get this 529 "tax exempt" tax to get your kid's higher education)

 

This is not normal.

 

Now you can always say, go move, but then you will not be able to get a job making $100k, but more like $60k and minimal expenses are going to be similar.

Food for thought.

 

inflation adjusted wage of $100k should be $180k now. so $200k is the new $100k where you get a little more breathing room....but not that much because extra $100k gets taxed 50% and you only have $50k left....than $20k in retirement, $20k in kid's college fund, you have $10k of play fun money which might need to go into emergency fund in case you get laid off during your 30 year career.

Fri, 05/02/2014 - 06:13 | 4719100 eclectic syncretist
eclectic syncretist's picture

The low volume broadening pattern forming on the major indices is a classic warning sign too.  While the Fed may call it tapering, what it really is is tightening, and institutional investors might just be smart enough to know the difference.

Fri, 05/02/2014 - 06:14 | 4719101 eclectic syncretist
eclectic syncretist's picture

The low volume broadening pattern forming on the major indices is a classic warning sign too.  While the Fed may call it tapering, what it really is is tightening, and institutional investors might just be smart enough to know the difference.

Thu, 05/01/2014 - 16:07 | 4717465 SAT 800
SAT 800's picture

Perfect. A Wiley Coyote retail citizens market; my fave. doomed; doomed, I say !

Thu, 05/01/2014 - 16:46 | 4717610 furgheddubouddit
furgheddubouddit's picture

Silly sheeple.

Being led straight into the slaughterhouse by the shepherds at CNBC.

Oh well, what's that saying; 'if you're gonna be stupid, you gotta be tough'.

Thu, 05/01/2014 - 17:12 | 4717702 Mr Pink
Mr Pink's picture

Silly sheeple.

Being led straight into another 30% return in the 401k

If they were smart they would bet the farm on silver like me!

Fri, 05/02/2014 - 01:37 | 4718969 old naughty
old naughty's picture

i am silly, not smart...but I'd bet anything but the farm.

Thu, 05/01/2014 - 18:25 | 4717928 moriarty
moriarty's picture

Yes Frazer

Thu, 05/01/2014 - 21:36 | 4718476 rsnoble
rsnoble's picture

Not sure if you know...........but regarding Wiley Coyote.........ACME is actually owned by Roadrunner Productions. LOL.

Thu, 05/01/2014 - 16:01 | 4717396 Grande Tetons
Grande Tetons's picture

That gap between retail and institutional looks like a pair of shears.

 

 Bend over....hold still. These shears do not hurt...for now. 

http://static.flickr.com/62/208357741_d82232aa70.jpg?v=0

Thu, 05/01/2014 - 15:53 | 4717403 transaccountin
transaccountin's picture

  so for past 3 years everyone was a net seller of assets yet they go up? mmmmk

Thu, 05/01/2014 - 15:59 | 4717427 Osmium
Osmium's picture

The Line for FED purchases is not on the chart.

Thu, 05/01/2014 - 16:06 | 4717462 LawsofPhysics
LawsofPhysics's picture

Please the Fed would never do that, just like they "would never directly monetize the debt"...

/s

 

Thu, 05/01/2014 - 17:06 | 4717681 I Write Code
I Write Code's picture

Also big share repurchases - which are largely fed money finding a home.

Fri, 05/02/2014 - 13:36 | 4720919 RacerX
RacerX's picture

Invisible Hand == Invisible Line

Fri, 05/02/2014 - 01:44 | 4718975 pomlad5
pomlad5's picture

FED line is on the chart, their money is taxpayers money, retail line is on the chart...

Thu, 05/01/2014 - 15:58 | 4717425 BrigstockBoy
BrigstockBoy's picture

The Muppet Show!

Thu, 05/01/2014 - 16:04 | 4717450 CrashisOptimistic
CrashisOptimistic's picture

The problem with articles like this that ask who is buyinga and who is selling . . . .

Is that no one is buying and no one is selling.

There are no people involved.  It's just HFT engines.

Thu, 05/01/2014 - 16:06 | 4717453 wee-weed up
wee-weed up's picture

 

 

The Muppet Show!

--------------------

Starring Miss Piggy Yellen!

Thu, 05/01/2014 - 17:41 | 4717796 Charles Nelson ...
Charles Nelson Reilly's picture

It's time to get out of equities
It's time to short the market
It's time to meet the Criminals who will be stealing your money tonight

Fri, 05/02/2014 - 03:52 | 4719029 Flux
Flux's picture

Heh, ok that was clever.

Thu, 05/01/2014 - 16:00 | 4717431 Dr. Engali
Dr. Engali's picture

Same as it ever was.

Thu, 05/01/2014 - 16:02 | 4717441 Xibalba
Xibalba's picture

where is retail getting all their margin...er.. I mean money? 

Thu, 05/01/2014 - 16:03 | 4717446 assistedliving
assistedliving's picture

The firewall working perfectly i see

Thu, 05/01/2014 - 16:04 | 4717452 LawsofPhysics
LawsofPhysics's picture

Okay.  So what are the institutional types buying?  many are mandated to buy certain percentages of certain investments.

 

Do tell..

Thu, 05/01/2014 - 16:20 | 4717514 headhunt
headhunt's picture

Yellen futures

Thu, 05/01/2014 - 17:20 | 4717740 NidStyles
NidStyles's picture

Looks like they are buying shorts and HFT equpment to me. 

Thu, 05/01/2014 - 16:05 | 4717454 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

we keep hearing this but the market keeps going up.

Thu, 05/01/2014 - 16:05 | 4717460 Kaiser Sousa
Kaiser Sousa's picture

retail investors?????

so, "broke as a fucking joke" mom, pops and general muppets r in these Fraud Markets buying at the all time highs.....

yeah, right......

Thu, 05/01/2014 - 16:06 | 4717463 NDXTrader
NDXTrader's picture

This just means...CASH ON THE SIDELINES!

Thu, 05/01/2014 - 16:08 | 4717470 SAT 800
SAT 800's picture

LOL. it means "correction coming soon".

Thu, 05/01/2014 - 16:15 | 4717494 gdiamond22
gdiamond22's picture

The Rotation is out of momo and into large cap - 2200 SPX by year end.

Thu, 05/01/2014 - 16:29 | 4717550 zipit
zipit's picture

Here comes the ratail investor, finally.  Market peak in 3, 2, 1...

Thu, 05/01/2014 - 16:31 | 4717556 Goldenballz
Goldenballz's picture

Institutions are consolidating, mom and pop investors buying... should we buy after the correction?

Thu, 05/01/2014 - 16:40 | 4717587 CHX
CHX's picture

So sad. Retail will get burnt really good this time IMHO. The ultimate bagholders, buying the FATH. Rinse, wash, repeat, works like a charm every 7-8 years or so it seems.

Thu, 05/01/2014 - 17:00 | 4717663 TheSecondLaw
TheSecondLaw's picture

Lambs to the slaughter.

Thu, 05/01/2014 - 17:22 | 4717751 Mr Pink
Mr Pink's picture

How long are we all going to stick to this idea that the stock "market" is gonna implode?

I'm starting to think it could survive a nuclear holocaust

Fri, 05/02/2014 - 07:58 | 4719280 headhunt
headhunt's picture

They change the algos when they think a conservative may actually win - craaaassshhhh!

Thu, 05/01/2014 - 17:07 | 4717677 ebworthen
ebworthen's picture

Can't believe people are falling for this all over again.

You'd think they'd be wise to the Wall Street three-card-monti.

Astounding (though this is based on BOA/Merrill Lynch customers). 

If this holds across other firms, it is a signal that the next planned crash is closer.

They won't crash it until they are out - and Mom and Pop are all in.

Thu, 05/01/2014 - 17:09 | 4717690 johnjkiii
johnjkiii's picture

The sheep need to be shorn.

Thu, 05/01/2014 - 18:00 | 4717851 BullyBearish
BullyBearish's picture

BTFD was conditional training for future bagholders, who now can't help themselves from stepping into the MOMO morass and asking, "Thank you sir, may I have another?"

Thu, 05/01/2014 - 18:55 | 4718012 LooseLee
LooseLee's picture

Sadly the retail 'folk' place CONfidence in the sell-side and MSM. When they realize they have again been duped, HEADS WILL ROLL---literally...

Thu, 05/01/2014 - 19:24 | 4718114 TheRideNeverEnds
TheRideNeverEnds's picture

you are missing one key buyer of asstes in your chart, the only one that matters; the FED

here ill help you out.

The Moon-                |              

                              |

                             |

                            /

                         /

                     /

                /

           /

0- _ /

FED Assets

Thu, 05/01/2014 - 19:50 | 4718195 icanhasbailout
icanhasbailout's picture

Masterful use of ASCII art

Thu, 05/01/2014 - 22:08 | 4718577 Atomizer
Atomizer's picture

Fed tapering

 

 

V
  V
    V
       V
         V

          

 

Thu, 05/01/2014 - 19:38 | 4718163 messystateofaffairs
messystateofaffairs's picture

Retail sheeple, dumb du dumb dumb dummmmm.

Thu, 05/01/2014 - 19:50 | 4718194 Bemused Observer
Bemused Observer's picture

I think it is quite obvious that the 'buying' is being done by insiders and "manipulators" in order to keep the price up. They are using the rising stock prices the same way those ugly fish from the deep sea use their little dangly fleshy lures...

Thu, 05/01/2014 - 21:21 | 4718442 RMolineaux
RMolineaux's picture

The retail investor has entered a poker game late, with strangers.  He has not noticed the mirrors behind him and does not know where the cards come from.

Thu, 05/01/2014 - 21:48 | 4718500 Droid Fuel
Droid Fuel's picture

What mutual funds should I move my money too to hedge against crash?  I have been googling for a couple of days and cant find any good direction...

Thu, 05/01/2014 - 22:11 | 4718591 eddiebe
eddiebe's picture

My guess is cash and hard assets. Then again, the cash is being inflated away and may devalue massively at any week-end. As for hard assets: Gold and silver are the most liquid, but could be confiscated and their prices are suppressed by the central banks and you still need to convert to buy anything. Real estate has it's own problems. I like trees, especially the likes of pecans or other nut trees, but that involves a lot of work and time, and you have to live in certain climates.

Personally I don't like any mutual funds. If you have to go into mutual funds or stocks in general, diversify.

Thu, 05/01/2014 - 22:08 | 4718575 Bloody Muppet
Bloody Muppet's picture

Lucky for 'Retail' they can afford to buy.

 

I've got no job, no money, and a lot of debt. At this point in my life, there's only one thing I have to offer.

Citizenship.

Thu, 05/01/2014 - 22:43 | 4718696 Comte d'herblay
Comte d'herblay's picture

Define "Institutional".

If it does not include the primary dealers, then it is misleading.

THEY have been accumulating trillions of FRNs courtesy of the FED.  

We need another line on that chart to get the whole picture, one that shows what the Primaries bought along that same time line.

It makes some sense that institutions would be selling to obtain money to fund pension withdrawals by retirees that rising geometrically due to bebe boomers.

According to that chart institutions have been selling for the last 5 years. That's just not possible for the market to double, and triple on the S & P without more buyers than sellers. SOME "institution" has been buying what they are selling. 

Something seriously askew with that chart.

Thu, 05/01/2014 - 23:37 | 4718811 D-Fens
D-Fens's picture

If you put any money in the stock market, you deserve to lose all of it to the tribe.

 

No more excuses, Americans.  Not anymore, not in this day and age when you know the score.

Fri, 05/02/2014 - 01:19 | 4718955 devo
devo's picture

Haha poor Joe Retail

Fri, 05/02/2014 - 02:30 | 4718991 timmeh
timmeh's picture

so... if all their clients were net sellers, who was and IS the net buyers?!

 

foreigners (EU, China, Japan)? the banks themselves? pension funds? the government?

 

anyone can help me with that?

Fri, 05/02/2014 - 02:22 | 4718992 I Write Code
I Write Code's picture

So if they sell the stocks where are they putting the money, in bonds?  I just looked at the TYX chart for the first time in - years.  OMG.  Yellen has been pushing down the rates so bonds go up in value, but what happens when the music stops and rates spike up and up?  Is the fed PLANNING on buying EVERYTHING OFFERED?  Because the alternative is a replay of exactly the market failure that was the epic fail of 2008.

So the fed must be planning this major bailout, so - BTFATH in bonds!!!!

OMG we are so fucked.

Fri, 05/02/2014 - 03:07 | 4719013 PacOps
PacOps's picture

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140502000004&c...

Beijing suspected of hiding US$700bn in US bonds

Liu Mingkang, the chairperson of the China Banking Regulatory Commission, has accidentally revealed that China may hold US$700 billion more in US bonds than it has previously stated, reports Japanese newspaper Nikkei, which said the disparity shows the country's mistrust of the US.

The Chinese official said during a speech delivered in Washington DC on April 16 that over half of China's foreign reserves have been invested in US bonds and that as of the end of March this year, around US$2 trillion of the country's US$4 trillion in foreign reserves are in US dollars.

The figure does not match those provided by the US Treasury, which said China held around US$1.3 trillion in US bonds as of the end of February this year.

Analysts said China could hold the bonds anonymously or under other account names. The country has held Japanese stocks under the name OD05 Omnibus and has an account in the Japan Securities Depository Center.

A financial professional speculated that China may have accessed the bonds through the European bond settlement system in Belgium. The European country's US bond holdings surged from US$174.4 billion to US$341.2 billion between August 2013 and the end of February this year.

Most US bonds holders save their holdings at the Federal Reserve Bank in New York but China appears to have hidden part of its holdings. The Japanese news agency suspects that the cause is the country's deep mistrust toward the US.

Fri, 05/02/2014 - 05:13 | 4719067 Snoopy the Economist
Snoopy the Economist's picture

I bought a stock yesterday...and then sold it after making 3%. Not bad for one day. Beats high yeild savings accounts by a huge margin.

Sat, 05/31/2014 - 00:40 | 4812002 BeetleBailey
BeetleBailey's picture

Indeed Snoop. Few can do that daily, consistently, without a Pepto IV and some fine scotch...but kudos....keep up the good work!

..and, in one day, you clobbered the MM annual rate......sad....

Fri, 05/02/2014 - 06:48 | 4719139 trailsend
trailsend's picture

So what are institutionals doing with their money?  It sure as hell isn't going into PIMCO.  Is it going into foreign equities or what?

Fri, 05/02/2014 - 07:48 | 4719264 headhunt
headhunt's picture

Where is the BofAML Bull/Bear chart with this?

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