The 'SMART' Money Is Dumping Stocks As BTFD Officially Ends

Professional money managers were leery about buying stocks during the recent rebound, judging from Bloomberg's Smart Money Flow Index, which tracks Dow Jones Industrial Average moves in the first and final 30 minutes of trading.

The thinking is that smart money will test the market and wait until the end of the day before committing to any large moves.

The last time SMART money and the market diverged this much did not end well for stocks...

The index is hovering at its lowest in two years - since the start of The Shanghai Accord - suggesting a very different regime has recently begun.

One thing is for sure, volatility is back and most notably the VIX term structure has been inverted for a significant period of time - which itself is unusual...

As Bloomberg notes, backwardation is a tell-tale sign that stress is still built into the market -- typically, contracts for further months are priced higher since the future is less certain. So even as global equities rally, traders are happily paying a premium for a contract betting on another bout of volatility sooner rather than later.

However the biggest 'regime shift' is the one that has been so-ingrained in investors' minds - thanks to central bank exuberance - over the past few years, that it is now ubiquitous... except in the last few months Buy-The-Fucking-Dip has failed...

CNBC reports that according to Bespoke Investment Group, buying on the dip has gone out of style in the US stock market.

"The YTD [year-to-date] pattern has been a very big spike at the open towards highs of the day between 10:00 and 11:00 AM," Bespoke said in a note Friday.

"There are bouts of volatility back and forth, but the biggest swing lower comes in at the end of day trade right before the close."

"The YTD intraday performance chart suggests that the most reactive buyers are piling in early while the smart money is selling into the close," Bespoke said.

Which confirms the chart at the top - buying any fucking dip intraday has officially ended!


snblitz lester1 Wed, 03/28/2018 - 16:41 Permalink

Bitcoin is up.  Bitcoin is down.

But has it actually ever been useful for any purpose other than fleecing people?

  • irreversible public ledger - no
  • stable currency - no
  • decentralized - no (and suffers from the 51% problem)
  • cheap - sometimes
  • fast - no
  • eliminates third parties - no
  • easy to use - no
  • exchanges - risky and costly

"but, but, but it's gonna be...."

Yay, it is always "gonna be" but it never has been anything useful.

In reply to by lester1

lookslikecraptome lester1 Wed, 03/28/2018 - 18:11 Permalink

Well Lester I absolutely must agree with u BTC charts do look horrible. Also the volume is way down. .

Yeah, I know. The are batching orders together so to speak. But, a trade is a trade and a coin is a coin. There is always a record of the volume. A contract is a contract in a futures market. They always add to the total volume no matter how it is recorded. So yeah, based on the volume chart, the link is to a five year volume chart, BTC looks pretty screwed. 

Even the crypto PPT has not showed up yet which they had been doing at 8000. 

Will they show up? Who knows, but they usually put in an appearance by now. Maybe they are happy just setting the support this time. 

In reply to by lester1

curbjob GUS100CORRINA Wed, 03/28/2018 - 15:15 Permalink

"STUPID COMPANIES who did leveraged stock BUY BACK deals using borrowed funds from the future."

Really ? I thought buy backs were like a rainy day account; you can always sell them to cover operating expenses when the cost of short term financing  goes up : )


It's when they all do this ^^ at the same time that things get interesting. 



In reply to by GUS100CORRINA

Quantify Wed, 03/28/2018 - 14:57 Permalink

Where where the world be in 5 or 10 years? Should be fascinating to watch. I am guessing in pretty poor shape and perhaps far less humans.

MusicIsYou Wed, 03/28/2018 - 15:01 Permalink

There's always the possibility particular stocks won't reinflate. And some of the big companies making up most of the forces might soon be on the has-been list.

Ink Pusher Batman11 Wed, 03/28/2018 - 15:42 Permalink

Over 70 Trillion reasons why they are still craftily scripting the narratives for the next euphemism designed to convey nothing more than a planned  "stress test" when in fact the bottom fell out of their golden bucket sometime in 2012 and it's all been about pushing these seemingly unending fabricated fantastical futures projections since then .

In reply to by Batman11