As Hedge Funds Sold, Retail Bought The Dip (Again)
Dip-buying isn't dead.
Or at least it wasn't as of late last month. Despite mounting headwinds, including extreme ambiguity around the Fed's reaction function in the face of the highest inflation in a generation, BofA's private clients were buyers every week in 2022 through the end of February. As the bank's Jill Carey Hall wrote earlier this month, "buying of this dip by retail was more aggressive than during other 10% pullbacks post-crisis."
One week and multiple war escalations later, hedge
Ithink Ukraine will be behind us by 2H 2022.
Supply chains will reroute. Kind of like when a clogged artery reroutes.
TINA plus a longer horizon gives retail the edge over hedgies.
I just bought plane tickets to visit Europe (western) this summer.
Remember folks, every trade has two parts, a buyer and a seller. They must match up. No one can sell unless someone buys and vice versa. The initiator of any trade may have a bit more influence on the final price, depending on the general pressure of the market, but a “trade” is still a balanced transaction taking place between parties that disagree with each other about the prospective future benefits to be provided by the asset being traded.