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Who's Selling?
We know there is one indiscriminate non-economic buyer in the US equity markets - the entirely ignorant of valuation concerns, funded with record high leverage, corporate buyback machine. But who is selling to them? Once again, as BofAML notes, institutional clients are net sellers of US equities since Mid-April (and are cumulative net sellers year-to-date). So do you chase the non-economic float-shrinkers... or the large professional investors?
Now you know... who's selling to you when you are BTFATHing...
It's been a while...
Last week - as stocks soared, it was institutional clients who were piling out of stocks... and retail/private clients piling in...
As BAML notes, last week, during which the S&P 500 was up 2% and reached a new all-time high of 1900, BofAML clients were net sellers of US stocks for the second consecutive week, in the amount of $286mn.
Source: BofAML
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So stock market reversal is dead ahead.
Be your own Institution!
Sell, fishez!
Looks like straightforward distribution from strong hands to weak.
It reminds me of the bloke that walks his dog in the morning....sooner or later he will be the one holding a bag of shit.
Speaking of... Utilities are a bit like toilet paper. In a recession, you still need 'em...
"Welcome, Dumb Money....please take a seat... Yes you... fat guy in the Hawaiian shirt.... welcome....."
As kids we had this little game where we lighted up a pirate, a pretty powerfull firecracker and than tossed it arround in the group untill it exploded.
The trick was... be the one who bought them and make sure you where the only one in the group who had a ligher ans wait for at least 2 seconds before you passed it.
It was fun... and it was always the same guy in the end who caught them exploding but who never figured out how to avoid that...
wha?
"It was fun... and it was always the same guy in the end who caught them exploding but who never figured out how to avoid that..."
By chance, was that little boys name Ben?
No, his name was Janet.
Aside from mentioning BofAML as a contra trade signal for the 100th time, I'll add that you shouldn't short a single share. Anybody who's been watching the "magic show" for the past 5 years knows this by now. Rigged markets, as ZH loves to point out repeatedly, do not have to follow any logic whatsoever. BTFATH bitches.
May be true. Yet, if you've been in the market 4 or 5 years and made great profits, I'd say taking a profit now is probably not a bad move, given that the volume on the S&P 500 is now below its 30 day moving average even as it keeps being float higher.
Agree, while I also look at any TBTF's analysis as self promotional, in this case, ICI fund flows confirm the dumb money's been flowing for a year now.
This investing sh*t is easy - who's the dumb guy at the table they keep talkin' about?
Yes, but a rockin' ISM report today!
Which one ?
Seems to me that S&P has disengaged from all other markets because it stopped responding to the real economy. Every dip is immediatly and blindly bought. ticks are never allowed to loiter on the bid.
Who should you follow. Well, when you add up all the cash reserves of those doing the buy backs, etimate how much they are willing to spend and then compare that with the net outstanding shares available among the institutional buyers, which is greater and ask the question, who has more to lose?
When this market begins its fall, which it most assuredly will at some point, and no one knows when, the keyhole for exit will be narrow. The time to exit is while the getting is good, especially after 5 years of nearly straight up.
Could the market rally another 25% before stopping? If the trend in volume contraction continues, I don't think so.
I think everything that can be done will be done to keep the markets higher until the upcomming elections. But I think we move sideways or slightly up at best through the summer. We are one exogenous event away from a cascading fall but no one knows what might bring that on, Vietnam, the Ukraine, China/Japan? Another derivatives meltdown?
If I were forced to give advice, I'd say move to the sidelines while you can lock in high profits and get out before the inevitble tumble.
Looking at the Index of Leading Economic Indicators, thinks look pretty rosey. But looking at the fact that new jobs created are paying like maybe 60% (at best) of what the jobs lost prior to the recession are paying, all the jobs #s need to be scaled down so that 1 new job equals 0.6 new jobs in the wage adjusted employment calculation, it would be seen that the new hires are not adding nearly as much growth in consumer or retail as they would have pre-recession and this translates into a reduced impact on GDP growth.
I wish ZeroHedge would run some numbers on this and show them graphically.
we've seen since the beginning of 2013 that markets are operating on a new dynamic relative to history whereby they can continue to rally for extended periods of time on declining volume without any significant corrections. At some point i agree, the chickens will come home to roost and the market will experience the cumulative effect of this volume decline...but when?
Look at a chart of SPX volume over the last 20 years or more, you'll understand what I mean when I say volume is an irrelevant measure of market or trade fundamentals.
HFT's have mangled volume, ironically volume now has a propensity to increase when the market's bearish as HFT's pick up....look at a chart and note the massive surge in volume around mid-decade 2000's.
Deja 2007.
There was no QE back then.
Muppits is so stoopid.
Anyone "piling in" to this market NOW has a few screws missing...I really can't summon any sympathy for them at this point.
There's no cure for 'stupid', only tears and regrets after the fact.
Greed just never quits, does it?
Why anyone would want to trade shares of a good company for shitty dollars is a mystery to me.
As employment picks up, new hires run home after learning they've been hired and look at which sectors have outperformed the last few years.
The first day of work, sitting in human resources, they're checking off Smallcaps and Tech sector for their 401-K's like they're picking out a pair of socks.
Institutional investors see the pickup in froth and fund flows, they work to bolster it, fattening the pigs for slaughter.
That's one thing that hasn't changed for market dynamics, same ole, same ole.
oh wait, you mean bagholders.
so why didn't you just say bagholders to begin with?
could be intitutions have some cash flow problems ----somewhere I read 10,000 a day retire?? -might be one reason for taking the profits now- ---getting reserves --paying the buy outs
but of course that would be net neutral ---cause the little guy will take that buy out money and do what?? altogether now----INVEST
It will be okay because tomorrow is turbo Tuesday and the 401k Money will be pouring in.