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Recent Market Action Summarized In Four Words: "Institutions Selling, Retail Buying"
The irrational market got you seeing double again? Virtu's algos just slammed all your bid and ask-side stops? All your shorts soaring and your longs tumbling while the market's multiple continues to grow solely thanks to the Yen carry trade?
For some this centrally-planned trading environment is a nightmare which leads to trading paralysis, like for example Dennis Gartman:
Do we believe this rally? No, we do not. We refuse to believe that “terror” is bullish. We refuse to believe that the deaths of 129 innocent people by madmen are materially supportive of stock prices. We refuse to accept the notion that the odds of a Fed tightening are reduced modestly and that that is massively supportive of stock valuations. We refuse to believe that common sense has been cast overboard entirely... We are indeed in a brave new world. It is a world we are not particularly fond of, however, if this is the new reality.... We refuse to believe that common sense has been cast overboard entirely, and so neutral we are and neutral we shall be.
Others however, are far more pragmatic. Case in point, the smart money which according to Bank of America is taking advantage of this latest rebound in stocks to sell to who else: the traditionally biggest sucker in the room - retail investors. To wit:
Second week of institutions & HFs selling vs. retail buying
Last week, during which the S&P 500 fell 3.6%, BofAML clients were net sellers of US stocks for the second consecutive week, in the amount of $868mn. Hedge funds, followed by institutional clients, were the biggest net sellers – this was the second consecutive week of net sales for both groups.
Some more details:
- Hedge funds are net sellers of US stocks on a 4-week average basis, which has been the cast since early October.
- Institutional clients have been net sellers of US stocks on a 4-week average basis since early September.
- Private clients have been net sellers on a 4-week average basis since mid-October.
Both large and small caps saw outflows last week, while mid-caps saw inflows. Small caps have now seen net sales for seven consecutive weeks, and we noted last week that outflows in early November were the largest in our data history for this size segment.
The buyers? Retail "investors".
Finally, remember all that buyback-bashing by Goldman which even admitted corporate balance sheets are full and the buyback orgy is ending? Well, maybe some time in the future, but certainly not now:
Buybacks by corporate clients picked up last week to their highest level in two months, with the four-week average tracking above levels we saw this time last year.
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Selling stocks high to Joe Schmo, and buying gold low from Joe Schmo.
It is plain to see why Joe's name is Schmo, and the institutions make the big money.
Maybe buybacks are missing off that chart given retail is net 2B, hedge funds are -4B, and institutional are -20B. Seems like 22B of buyers are missing.
So, maybe there isn't any retail left after all ...
Regards,
Cooter
Of what do these people speak? Retail investors are harder to find than the illusive unicorn...
Playing catch with a live grenade will certainly be exciting for somebody......
bullshit, this is going to go on for a long long time
So private clients have the highest cum flow?
Cum flows from your privates. Generally.
If stocks don't go up, how can the "terrorists" short the market just ahead of the next terroist attack again?
I can shorten that to two words: "bag transfer"
I can shorten that to 1 word: "Baggery..." As in, Joe shmo has been baggered. Or the baggery is about to commence.
Market cracks are showing. If it survives without a major shift downward by the end of next week, you can eat my hat.
Retail?
How quaint.
I didn't know there were any more of those since 2008.
Why would they still trust the markets?
Pavlovian opening bell says it all. It's a dog's dinner.
How about the ZeroHedge worshippers? Still Long SPX Puts, Gold and a Oneway ticket to Bulgaria? LOL....
And, according to the table doesn't it show that veryone is a cum seller this year apart from Corporates? I assume that means buybacks??? Where do you see Retail as Net Buyers?
However, you better believe the PPT is bullish.
In a corrupt and artificial way, of course.
Print fiat, buy stocks, pretend all's well.
What I'd like to know is:
#1: Is retail buying really increasing?
#2: How on earth would they get anyone to buy now?
you got it. they left out the one important chart. ppt