More institutional selling
While retail investors and traders plow into risk assets, there has been a sharp ramp higher in the # of institutional sellers. The # of institutional sellers in QQQ (NASDAQ ETF) jumped more than 30% in the past 4 months:
When this happened in the past, traders needed to be vigilant for the next few weeks and months. There was always an opportunity for sellers to buy back their stocks at a lower price:
September 2012: this occurred at the start of a -11.9% correction
June 2014: the NASDAQ rallied another +6.9% before it fell -8.4%
July 2015: the NASDAQ fell -13.9% correction immediately
June 2016: this occurred at the start of a -7.5% decline
What a year it’s been. I hope you’re doing well, both health-wise and wealth-wise. This is the first time I’ve written my market thoughts on this blog since August 2019, so thank you if you’ve been following me since I stopped writing here a year ago. Now let’s dive into the markets.
It doesn’t matter if it’s a white cat or a black cat. If it’s a cat that catches mice, it’s a good cat.
There is a battle raging between bulls and bears right now.
Most bears are arguing their outlook by pointing at high sentiment, rich valuations, record-shattering options buying, and a lack of insider buying. Moreover, many bears think that a “real” correction is long overdue.