Well, the bottom is falling out for stocks on Friday afternoon on the heels of a hotter-than-expected AHE print that exacerbated the ongoing bond rout.
And just in time for retail investors to get their asses completely burned after a January that saw a veritable avalanche of inflows into equity funds encouraged, in part, by Donald Trump and vacuous promises about the restoration of lost American “greatness”.
Over the last couple of days, we’ve shown you a variety of charts that seem to suggest everyone went all-in at the worst possible time. On Thursday evening for instance, we noted that TD witnessed a 50% increase in client activity in Q4…
… just as everyone is busy Googling “how to buy stocks”:
Well this seemed like a great time to show you a series of other visuals that underscore the euphoric mood that predominated right up until, well, until this week. These come from Deutsche Bank’s Binky Chadha.
Via Deutsche Bank
Aggregate shorts in cash equities and ETFs, led by cuts in Tech shorts, have for the first time fallen below the elevated range they have been in since the financial crisis.
Margin debt in brokerage accounts has risen to extremes:
While cash balances have fallen below the normal range:
Option market indicators had till last week painted a similar picture with the put/call ratio low:
Inflows into equities have surged recently to the largest monthly inflow on record:
Just one question for the folks whose actions in the market are behind those charts: “How’s that workin’ out for you?”