Fra zerohedge:
On Friday we showed that according to the latest fund flow data, anecdotal speculation of a marketwide melt-up was indeed the case. As a reminder, earlier in the week, we discussed how market optimism among both professional and retail investors had hit the highest level since just before the crash of 1987…
… with a recent E-Trade survey disclosed that 8 out of 10 retail investors – the highest on record – were certain that stocks would continue to rise in Q1. Then, BofA calculated that the 4-week inflows into equities was not only “thundering”, it was the largest ever. This is the result of a massive $23.9bn weekly inflow into equities which brings the 4-week inflow to stocks to the biggest ever, $58bn as shown in the below…
and there was even some good news for active managers: the 4-week inflows to active equity funds was at a 4-year high, although the relentless market share theft by ETFs is unlikely to change any time soon, and certainly not if the market keeps levitating with virtually no volatility.
Also on Friday the S&P’s Relative Strength Indicator rose to a new all time high, suggesting that as of this moment, the US stock market is the most overbought ever.
Now it’s JPMorgan’s turn to opine on recent market euphoria, which – in the aptly named weekly “Flows and Liquidity” report, arguably JPM’s most interesting publication – it says that as of Friday, “momentum signals have reached extreme levels for the S&P” which to JPM’s Nikolaos Panigirtzoglou suggests that “equities are vulnerable to near-term profit taking.“
