Foreigners seem to be heavily wagering that the US is headed for a recession. They have been selling US stocks and buying treasury notes/bonds with aggression. On a net basis in October, foreigners sold $24.4 billion in US stocks. Since … Continued
At least until August, foreigners were crystal clear which US assets to part with and which to hold on to. They have been selling equities and buying long bonds. Foreigners sold another $26.9 billion in US stocks in August. This … Continued
Two important data points came out last week and both are acting as headwinds. Margin debt and foreigners’ buying behavior are likely to continue to maintain the current trajectory medium- to long-term. Near-term, technical indicators are oversold, with the S&P … Continued
Foreigners purchased US stocks in November and December, but the 12-month total continued lower. The series comes with a lag, so it is hard to tell if they bought January’s low, particularly because the Investors Intelligence bulls-to-bear ratio this week … Continued
The S&P 500 keeps rallying to new highs, breaking down historical relationships with several metrics. It is possible the Fed’s expanding balance sheet is causing all this divergence. If it is, then the central bank will stop expanding its asset … Continued
Following futures positions of non-commercials are as of October 19, 2021. 10-year note: Currently net short 544, up 156.6k. In the 12 months to August, foreigners purchased $3.8 billion in treasury notes and bonds. As recently as February this year, … Continued
After dropping by a decent amount last week, major US equity indices are headed for a test of nearby support, which in the case of the S&P 500 is merely 0.8 percent away. Over the past 16 months, bulls’ mettle … Continued
VIX recently broke a month-and-a-half rising trend line, subsequently coming under more pressure. In the right circumstances for volatility bears, the index could drop more near term, but a longer-term trend line support is unlikely to break. On June 29, … Continued
The 2Q earnings season has gotten off strong. Stocks, having already rallied big into it, yawned. This is coming at a time when sentiment remains effusive and some of the tailwinds potentially turning into headwinds. VIX’s monthly chart could be … Continued
Buybacks made a comeback in 1Q21. Nonetheless, they are no longer as strong a tailwind for equities as they were in 2018 and 2019. Margin debt and foreigners continue to support stocks, and will pose problems once they turn. S&P … Continued