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Monday, May 4, 2015

Daily update 5/4 Equity fund flows

A bit of a snoozefest today.  It kept with the pattern of up Mondays we have been seeing this year.  Remember most Tuesdays and Wednesdays have been down.

Volume dropped again today.  SPX got above its highest close this morning, but could not stay there/ It fell 5 points short of the intraday high.  That was much closer then the other major indexes got to their highs.  While everything ends up going where SPX goes, it cannot carry the entire market up by itself.  The breadth was +54%.  Still looking like a dead cat bounce.  The new highs were only 58.  That is absolutely abysmal with SPX this close to the high.

The futures closed above the 18 SMA due to an overnight surge.  However, after a bit of a spurt to the upside on the open it was sideways the rest of the day.  We did not get confirmation of the break above the MA today.  ADX is still falling.  The DI lines have a positive cross, but just barely.  It would not take much to reverse that.  Nothing exciting for the bulls in this chart technically.

We had a two day bounce to test the the high of the key reversal day.  Price fell a little short, but close enough to call it a test if it should fail from here.  Internals were weak both days.  It looks like this rally will fail to me.  I guess we will see.

This chart of equity fund flows is making the rounds on the internet.  I thought I would show it here in case you have not seen it.

It would appear that some people are taking money off the table.  I remember fund flows dried up around the 2007 top.  There were some months with outflows then.  This chart is not really in a format I can compare to that period.  Looking at this chart you would think the market is crashing.  If this chart is correct it is actually amazing the market is holding up as well as it is.  Is it corporate buybacks doing the holding up?  Generally speaking stock prices do better when money is flowing in not out.  I have written a lot lately about how weak the technical condition of the market appears to be.  I guess this chart tells us why that is.  Is this smart money or dumb money?


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