Despite the constant clamor of money-on-the-sidelines (which Cliff Asness has summarily dismissed as being idiotic) about to take stocks on their next leg higher, and near-record high bullish investor sentiment, it appears institutional selling is doing nothing to affect the 'euphoric' levels of risk-to-reward in the markets.
Full of bull...
Biggest sales by our clients in our data history (since 2008).
All three client groups (hedge funds, institutional clients, private clients) were sellers of Discretionary stocks last week, where this sector has seen among the weakest results and guidance this earnings season. Clients also sold stocks in Tech, Real Estate, Materials and Utilities.
And with VIX near record lows and trailing S&P 500 valuations at near record highs, the risk-reward index is deep in euphoria - at its worst levels for investors since 1994!
The last 3 times stocks were this euphoric were March 1994, March 2000, and Feb 2007 - all of which ended in ugliness (if not disaster).
Furthermore, for all those Trumpflationists, we are said to say that all hope of anything but a temporary blip in inflation have been erased as the Inflation-Breakeven swaps surve has collapsed near post-crisis flats...
Seems like the perfect time to BTFATH.