Boy, you morons are a fickle bunch, I’ll tell you what.
Remember back in early February, how there was a veritable exodus from equity funds during the flash-crashing madness that accompanied the VIX ETP implosion? Specifically, the avalanche of inflows into equities that helped propel benchmarks inexorably higher in January slammed into reverse in a Cartman-esque “screw you guys, I’m goin’ home moment” that looked like this in the week through February 7:
Well as noted on Monday afternoon in our train wreck post-mortem, investors dumped the most money ($3.3 billion) into QQQ last week since October 27, 2000 just ahead of the worst day for the Nasdaq 100 since the carnage that unfolded on February 8.
And guess what? Nearly $2 billion of that came right back out yesterday:
Here’s a snapshot of flows across funds:
All of that prompts me to wonder this: what the hell is wrong with you people? Can you not settle down for one day without trading in and out of these things? I’m sorry, but this isn’t what index funds are supposed to be about, but you know, what do you expect? When you promise Joe E*Trader intraday liquidity, by God he’s going to use it to express his schizophrenic “assessment” of the prevailing mood.
[Charts: Bloomberg, LK and EB]
Great points.
For sure, we’re going to find out how fickle and moronic the HFT algorithms are.
It has been a while since they have experienced the kind of volatility they’re getting peppered with now. Hopefully most are battle-hardened enough to manage it well – but unfortunately, complex systems tend to collapse if one too many ‘nodes’ fail.
This has nothing to do with HFT algorithms.
Well Joe* Etrade will really hate the ton of bricks falling on his head when …………….. Life was good and very easy when it was pick a trade Q’s, SPY, almost whatever and buy call, puts ITM, OTM and walk away with your 10-20% in three or four days as the CB bought up the bond mkt or the equities themselves it was cover city. Look how smart I am, this sh*t is EASY. Now …………..Oh sh*t what do I do?
H,
Why are you assuming it is retail money going in and out? I’d think it’s more likely retail money going in followed by institutional outflows. “Sell the rally” so to speak. The mood on the street is changing.