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The "Smartest Money" Used Last Week's Surge To Dump Even More Stock
It was one month ago when we first noted that, perhaps in advance of what was correctly perceived as contentious Greek bailout negotiations, the "smart money", i.e., hedge funds and institutions, had just sold the most stocks on record. This is what BofA's Jill Hall said "BofAML clients were big net sellers of US stocks in the amount of $4.1bn, following four weeks of net buying. Net sales were the largest since January 2008 and led by institutional clients—after three weeks of net buying, institutional clients’ net sales last week were the largest in our data history."
Fast forward to today when we got the latest BofA client flow update in which we were expecting to find that the "smart money", flush with cash and taking advantage of the Greek "deal" would piggyback on last week's biggest weekly market surge since October 2014 when Bullard hinted at QE4 and unleashed a buying surge.
To our surprise we find that not only did "smart" money continue selling, but they were joined by the "smartest" money of all, hedge funds.
From BofA:
Last week, the S&P 500 rallied 2.4%... as the situations in Greece and China turned seemingly less dire and 2Q earnings began to come in better than expected. Amid the rally, BofAML clients were small net buyers of $32mn in US stocks, led by private clients. (Private clients’ flows in recent weeks have suggested uncertainty over market direction, as they’ve alternated between buying and selling most weeks since May.) Institutional clients and hedge fund clients were both net sellers for the second consecutive week last week.
The latest weekly action is broken out on the chart below:
The selling was broad-based across virtually all sectors with the exception of tech (see Nasdaq) and of course, retail's favorite investing instrument: ETFs.
The chart below which confirms that for all the endless propaganda on financial TV, both institutions and hedge funds are net sellers so far in 2015.
Going back to propaganda TV, as the table below shows, the only ones actively buying stock so far in 2015 (aside from the corporations themselves) are retail investors, mostly those using ETFs, who are happy to buy everything the "smart" money has to sell. Still, with net purchases of $1.5 billion YTD, retail is simply unable to keep pace with the institutional and hedge fund selling which is almost $6 billion YTD and which explains why major investors such as Icahn demand, via open letters on Twitter, that companies engage in even more aggressive stock buybacks. Because as this point the traditional recipient of Wall Street's hot potato simply refuses to play in the rigged casino.
But that's not the worst news: as IBM hinted in its earnings yesterday, the biggest buyers of stocks not only in 2015 but in recent years, corporations repurchasing their own stock, are starting to slow down perhaps concerned by the rapidly accumulating debt which the rating agencies are paying increasingly more attention to:
Buybacks by corporate clients were smaller than in the previous week, and the four-week average is now the lowest since January. Buybacks by our corporate clients have totaled $21bn YTD, which on an annualized basis would be slightly below last year’s record $45bn level (chart below). Given that valuations are more elevated vs. a year ago and investors have been agitating for companies to spend on growth, more selectivity in buybacks makes sense to us.
And extending the latest weekly trends shows what most have known for years: without stock buybacks, the market would be far, far lower.
Which means that if and when corporations follow in IBM's footsteps and end up with too much debt to engage in more buybacks, that's when the Fed will have no choice but to resume QE especially when one considers the long-term picture...
Until then, however, let's enjoy the myth of an imminent rate hike, which judging by today's action was just delayed by another 2-4 months.
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Pre-holiday dump?
With regard to the article itself; what I've been telling you for months now. Just sell the exciting, wonderful, rallies anywhere near their tops; and sit back and enjoy. The mechanism you use is the futures contract ES; the S&P500 contract. And, of course, if you have some stocks, for some reason; get rid of them. I've never been interested in stocks; I'm a futures trader; the stock market is in it's terminal phase now; as the article points out; all the rallies end around the same point; as they are being used as exit points by the smart money.
When oil first tanked I bought some MLPs, rode the dividends and rebound for a while, and sold out when it started turning south again. Timing wasn't perfect, but I made a few bucks.
I agree with your assessment. I'm out of the market and the only business I'm putting money in is my own.
It is the "Dump to the Dummies" and then "Make the Leveraged/Margined Dummies Panic" trick. Simple as that. Don't need a Michael Burry to figure it out. China was test case last month. Now comes to USA.
The more Gold is hated the more I'm buying....
It's an article about the Stock Market.
All gold buyers in 2015 are too early, Wait until Oct/Nov 2015 to buy gold.
yup. My low functining golf buddy just put a portion of inheritance into NFLX said its a long term hold and that "it'll go up and down for awhile before it goes up" .....
Holy shit...
solarmovie.is
Your golf buddy is indeed low functioning. Does his golf game suck as well?
Here is the truth about the much vaunted US GDP numbers:
Let's not forget that US inflation numbers are completely fake - so real US GDP is much, much lower:
The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%. So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.
The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively.
What is the Chapwood Index?
"The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."
http://www.zerohedge.com/news/2015-05-29/inaccurate-statistics-and-threa...
The hedge funds don't surprise me a bit. They know what's coming and are getting far away from ground zero. The question now is how long can a tiny minority of stock bend the market?
Retail suckered again.
Always; that's what they're there for. But you can profit if you'd like. feel free. Just short a rally with a futures index contract.
Btfd
Vix isn't moving much for the movement in stocks. So they're not even buying "protection".
But the dividends!!!
+1
What's the return on a stock that pays a 10% and suffers an 80% loss?
10% if you don't sell it.
I'm buying PMs. Just hard headed and stupid I guess.
Probably so; when you consider how much money you could make by shorting the Stock Market rallies. Or maybe you're just a Masochist.
im prepared to die with my pet rocks. i love them
im prepared to die with my pet rocks. i love them
Money on the sidelines folks. Money on the sidelines...
United Technology Corp. anounced as part of their strategy today; vis a vis their new low stock price; "to do more stock buybacks"; the actual problem ? They're not competitive in the modern world.
Taking a Big Dump .. smells fishy.
Selling the US and buying International and Bonds. Let's keep some perspective here!
"Chart 3: YTD cum flows by client type"
Did anyone else see that?
HF selling is a strong buy signal...those f**kers always get it wrong.
I wondered about tyler's "smart" tag for hedge funds. I beat them year after year.
The smartest money knows that this eventually will not end well for anyone and wants to avert that calamity. In light of ongoing bad financial indicators this Universal message is for the military. Whose lives will eventually be put on the line first when this current path and financial course finally comes to an end. It does not need to end like this. This is a bit long but consider it a briefing for all ranks.
International Banking and Financial Services are just a few of the areas where I have a large amount of knowledge and expertise. My original aspirations were as a military officer but in the end I chose to take a different career path. Just like all of you I have obligations and duties that I take very seriously. And I am posting this Universal message as a part of them. I have the utmost respect for anyone that is willing to risk their life as a part of their job and the valuable work that each of you do in your respective roles.
Now down to brass tacks. Here is a summary of the overall picture of an exceptionally complex scenario. It is my intention to cover the widest audience possible. And provide a greater insight of the situation for your diverse respective levels of knowledge and understanding.
BACKGROUND
1. Over the years I have learned a tremendous amount and applied my knowledge, experience and expertise across a number of fields.
2. My estimations for activities surrounding the crash approximately 7 years ago were close but nowhere near as accurate as they are now.
3. Proof of my abilities and accumulated research show that the results can have a very precise degree of accuracy. Several were posted here but are no longer available.
4. Whether you realize it or not each of you have already been informed in many ways that a future financial collapse will quite likely occur.
5. It will collapse without a fairly rapid course correction. I will not disclose specific details because this post will be removed if I do.
6. This post and conclusions are purely based on facts and evidence combined with a variety of my skills applied over time.
FACTS & EVIDENCE
1. There are increasing numbers of indicators showing the eventual direction of the financial markets each day.
2. The facts and evidence, both public and private, are tremendous and indicate an eventual financial collapse that will have farther reaching impacts than almost anyone can imagine.
3. I could post all the facts and evidence in the world and still not convince everyone.
4. The interconnected marketplaces significantly increase the risk of this being a major global event and the potential for one major e vent to trigger a global crash.
5. This current course and intended direction is not only preventable but there is a Universal solution.
6. And there is a real eventual potential that if it is allowed to continue on the current course it will engulf everyone everywhere.
7. Global unfunded military pension liabilities alone are far into the Trillions and will never be funded and paid to you when a collapse happens.
8. This future event is not exclusive to any region and covers all points on the compass an beyond.
of ways, means and sources as well.
9. Some countries and groups have taken steps to minimize the impact of this but quite possibly don't understand the bigger picture.
10. Nothing will be excluded from the fallout of this current course and outcome.
11. There are an almost innumerable amount of sources and means of obtaining this information. (i.e. News reports, financial documents, other expert opinions here on ZH etc.)
12. One of my posts some time ago, which is not longer available, clearly provided insight into the extent of my knowledge and abilities. Along with the potential to apply it with Universal impact.
Example: I expect any future collapse would certainly cut far past just erasing the unfunded liabilities in military pensions. So far past that there may be nothing left. If derivatives alone collapse there will be devastating financial effects everywhere. This is well documented in the 2007/2008 events and the very reason that the market has been allowed to continue as it is to this day. The world leaders know the outcome if they do not. Logically since they know this they either do not have a solution or want the intended outcome of total collapse to proceed. I have a specific set of knowledge that pertains to the derivatives sector of investments. A bankrupt country or world will not be able to pay anyone including the military for your ultimate sacrifice. Some countries have taken individual steps to mitigate this impact. (i.e. Buying Gold, Creating new groups aligned to work outside this current situation) These are attempts at local, regional or cross-regional fixes or hedges at best. These are not a solution and definitely not a Universal solution that will benefit everyone.
Many of you may not have even realized all these things since you are busy doing your best at your job. This is another reason I am making this a Universal appeal and am sharing my insights to everyone equally. It will not only affect everyone financially but significantly increase the risks for everyone in many ways. But especially the military who would be put in harms way first as an end result. Could an escalation to war be used as a means to distract everyone and cover up the known loss (i.e. fraud, theft) of your hard earned respective currency? Absolutely. It has already happened before and is easily verifiable historically. However, there is still time to stop this before it is not too late. There is a way to change course and get on a new path as well. The military will be the first to make sacrifices in the event of an impending or actual financial collapse. Either through financial cuts and/or increased risk of violence at home or having to go to war over the results. None of this is necessary. Are you each willing to risk your lives or those of your loved ones for something that can not only be prevented but also be corrected? Each of you needs to decide this for themselves.
SOLUTION
1. There are known global resources that can assist providing a global solution with a positive outcome for all.
2. These resources need to be consolidated at the earliest opportunity to have the greatest chance to avert the current course.
3. There needs to be visionaries, leaders and support to implement a change in course.
4. An all-inclusive plan needs to be defined with hard deadlines set.
Visionaries and leadership comes from every place in society but especially the military. Which is why many of you go on to very successful business and entrepreneurial endeavors. There are far less Visionaries that can see not only the biggest picture but include everyone.
SUMMARY
1. These economic path and subsequent events don't need to remain on their current course.
2. There are very specific reasons and ways to identify, target and fix the path that I and others would not and should not be allowed to post here.
3. The biggest picture is exceptionally complex.
4. There is a Universal solution that would benefit all and not the needs of the many or the needs of the few.
5. Visionaries and leaders need to step forward, consolidate resources and define an all-inclusive plan for delivery in order to get everyone on the right path.
DECISION
Those of you that studied at a major military academy, and others, may be familiar with this famous quote. "The general that harkens to my counsel and acts upon it, will conquer. Let such a one be retained in command!..."
The rest of the quote is irrelevant for me because I don't fail or accept defeat in the goals I set out to accomplish. We are each General's in our own lives and therefore often have to make difficult decisions that affect not only us but others as well. Which of you has the vision and dedication to choose wisely? I am one man that knows that there is a solution to this astronomically large and very complex problem. And I am also confident that I would be able to contribute to the delivery of a Universal solution. One that will put everyone on the right path for the benefit of all.
For each of you it all comes down to what type of future you want for you and your families. And what can each of you do to assist in helping to not only protect and defend your country but all forms of life from unnecessary harm. Please keep an open mind. For example, I recall reading that there may allegedly be Artificial Intelligence (AI) running as a part of Jade Helm 15 in America. And Native American societies and other groups believe the Earth itself is a life form. Is AI or the whole Earth life? Who am I to say. But I would not seek to harm any form of life. Quite the contrary I would do my best to understand any life form and assist it too. As I mentioned at the beginning this is a briefing. The whole thing is exceptionally complex. Understand what you can and learn more as you go. You'll be amazed what accumulated knowledge can teach you. So for your immediate consideration the choices are below.
1. Do you want the current future path? History repeating itself with another major global financial fiasco and the subsequent Universal fallout that will ensue? If so, all you have to do it wait.
2. Or would you like to fix that path and create a new brighter future with a universal solution that will include and help all?
There is still currently time to make a choice. I've made my choice. What's yours? And what are each of you willing to do about it?
This quote sounded like a very appropriate way to end this post in the hope that you the right decision for everyone's benefit. "To our unsung heroes whether you are a General or a Private our thoughts and hopes are with you. Each one of you has a vital sense of dedication and mission. We give our gratitude that comes from a full heart and be assured of our complete support."