Here is a good chart showing data from the weekly mutual fund flow of funds report. This series is using the domestic equity only data. In the first chart, we have plotted the flow of funds in it’s raw form. Though there has been a small recent uptick in funds coming in, note the strong consistent negative flow over the last couple of years.
In the next chart, we've compared this data vs. the S&P (black line) and then converted the flow of funds data into a 30 (blue line) and 90 (red line) day simple moving average (SMA). It seems clear that when the 30 day SMA spikes above/below the 90 day SMA, it often marks at least a short term top or bottom. Look at the most recent spike here. In other words, in the short term, there is just too much money chasing this market.
