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BofA Saw Record "Buying Across The Board" Last Week, Just Before The Market Resumed Sliding

Tyler Durden's picture




 

Previously we reported that while the general investing public was naively following "price action" as an indicator of value for most of 2015 (when it was merely chasing HFT momentum ignition algos and the occasional central bank intervention) the "smart money" was quietly unwinding its equity positions. The divergence between smart money flows and the broader market came to a crashing climax on "Black Monday", when the S&P tumbled to the level where "smart" investors deemed fair.

 

Perhaps not surprisingly, what happened next was precisely the opposite, and as Bank of America writes overnight, taking advantage of the oversold market, "last week, during which the S&P 500 was up 0.9% as the market rebounded off of Tuesday’s lows, BofAML clients were net buyers of $5.6bn of US stocks—the biggest inflow in our data history (since ’08) following five weeks of selling. The last time  flows were close to these levels was during the (less extreme) volatility in early January of this year, as well as following the Tech/Biotech sell-off in early 2014 (see chart below). Net buying last week was broad based—while no client group saw record flows relative to its own history, hedge funds, institutional clients and private clients were all big net buyers which led to record inflows when combined."

This also follows what we previously documented back in June, was the single biggest weekly outflow ever, as investors sensed that the market had peaked.

Which means that two months after the biggest BofA client outflow in history was followed just two months later by the biggest client inflows also in history.

 

The breakdown by client type and net target buy:

What is more amusing, is that perhaps BofA's clients only rushed in because they knew they would have some help from the companies themselves: as the bank also writes, "the past week saw Record Discretionary buybacks: Corporate clients’ purchases of this sector on a four-week average basis are currently the highest in our data history (since 2010)."

In other words, the bulk of the "money on the sidelines" dry powder has just been spent. The problem is that while everyone was expecting a market rebound, few were anticipating either yesterday's drop, or today's resumption of the broad market plunge.

And now we await next week's client flows data to learn if a week of record inflows was promptly followed by week of recorder outflows.

 

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Tue, 09/01/2015 - 13:38 | 6495997 swanpoint
swanpoint's picture

BTFD!

Tue, 09/01/2015 - 13:42 | 6496015 NotApplicable
NotApplicable's picture

Now kids, listen carefully for when the music stops, so you can get a seat!

Tue, 09/01/2015 - 13:59 | 6496090 El Oregonian
El Oregonian's picture

The slaughtering of the sheeple will continue until we can get to the bottom of this!

Tue, 09/01/2015 - 14:36 | 6496270 Gambit
Gambit's picture

Funny you say that El. Over the weekend I was having coffee with my GF and showed her a wall streel article on the fornt page which read something like: "Stocks Recover, Great Opportunity to Buy."  I pointed to it and said "Look this is how they are fucking the middle class, fucking unethical and emoral bastards...the "recovery" in prices is just a pull back before another wave." 

Tue, 09/01/2015 - 15:03 | 6496396 bamawatson
bamawatson's picture

well, what did ya'll do next?

Tue, 09/01/2015 - 17:07 | 6497104 MSimon
MSimon's picture

FTBD!

Tue, 09/01/2015 - 13:40 | 6496005 DetectiveStern
DetectiveStern's picture

Biggest crash in years biggest dip buying in years.

Tue, 09/01/2015 - 13:58 | 6496081 KnuckleDragger-X
KnuckleDragger-X's picture

BofA is kind of stating the obvious, after the fact of course. It'll be interesting to see if ther crystal ball is worth a shit......

Tue, 09/01/2015 - 13:42 | 6496018 This is it
This is it's picture

SHEMITAH

Tue, 09/01/2015 - 13:45 | 6496042 PTR
PTR's picture

Wave X.

Tue, 09/01/2015 - 14:03 | 6496117 HardlyZero
HardlyZero's picture

some BA watching the world blow their last wad last week, a buildup of 5 weeks fiat plugged up.

It is done.

So next time the markets collapse there will be no backstop...all blown wad is gone.

Tue, 09/01/2015 - 14:05 | 6496129 El Oregonian
El Oregonian's picture

"Wave X"

Wave hello to the new Xwealth.

fixed

Tue, 09/01/2015 - 13:44 | 6496030 damicol
damicol's picture

" BofAML clients were net buyers of $5.6bn of US stocks—the biggest inflow in our data history (since ’08) following five weeks of selling. The last time  flows were close to these levels was during the (less extreme) volatility in early January of this year"

 

And we fucking cleaned those fucking muppets out,  man, it was fucking epic, fucking awesome, we fucking creamed the dumb fucks, we wiped the fucking assholes out man.

Brian T. Moynihan

Tue, 09/01/2015 - 13:44 | 6496031 RopeADope
RopeADope's picture

These asset managers need to change their fee structure too -2%/20% and bond for 50% of AUM in case of losses from sheer stupidity.

Tue, 09/01/2015 - 13:44 | 6496032 Mick Shrimpton
Mick Shrimpton's picture

Don't people realize that the graph can look like a W instead of a V?  Buy after the first dip and you wind up getting screwed.  I just hope it doesn't look like this, Www

Tue, 09/01/2015 - 13:46 | 6496047 PTR
PTR's picture

It likely will.  There's plenty of people still delusional and willing to BTFD.

Tue, 09/01/2015 - 13:46 | 6496045 docinthehouse
docinthehouse's picture

This is BULL SHIT.

And if true, the lambs are gonna get absolutely fleeced.

Baaaaa!

Tue, 09/01/2015 - 14:00 | 6496097 KnuckleDragger-X
KnuckleDragger-X's picture

You too can have a high paying career in sheep herding, so sign up now....

Tue, 09/01/2015 - 13:59 | 6496087 Sudden Debt
Sudden Debt's picture

Oh, a small 20% correction will wake them up.

But the question is, if funds own 90% of a stock and keep buying, can those stocks fall mlre as there's no stocks left?

 

Look at netflex, 90% owned by funds, let's say funds add 5% more and prop the price up to 200. Nobody is selling but those funds can dump those stocks on their customers at that price and tell them to hold on for a year. 

It would explain the high PE's.

In the end, somebody will want to sell if the funds have a to big outflow and then the game is over but the mirage of value is superbig with that trick and you can turn a 50 million company into a billion dollar company on the books in no time.

Tue, 09/01/2015 - 14:17 | 6496176 slightlyskeptical
slightlyskeptical's picture

I think most of these folks have been sitting on cash for so long that they took the first opportunity they could to put some money in the markets. I did as well but there is a big stash waiting for the markets to truly fall apart.

Tue, 09/01/2015 - 15:33 | 6496576 Deez Nuts
Deez Nuts's picture

Suck in the Suckers before they get fucked by the Fuckers.

That's how it always works. LOL Works every time!

Deez Nuts will teabag those fuckers and place wall street in shackles upon the local lamp posts!

Vote Deez Nuts 2016!

Tue, 09/01/2015 - 15:38 | 6496607 Chosenpeople
Chosenpeople's picture

Buy the dips, dipshits.  Hey BTFD-imbeciles, you don't need any complex analysis to see stocks are going to tank for a long time.  Keep buying the dips, keep losing money.

Tue, 09/01/2015 - 17:07 | 6497098 q99x2
q99x2's picture

I think it was Abe's relatives that took that bank and 7-11 over in the late 1980s early 1990s. That's about the time Abe started poohing his pants.

Tue, 09/01/2015 - 17:12 | 6497125 4xfool
4xfool's picture

Finally seeing some action on my Jan 2016 and Jan 2017 BAC (BofA) Put options.  Was getting worried they'd expire worthless but they're almost to breakeven.  Might actually make some $ from them!

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