U.S. Equity ETF Flows Send Bullish Signals Despite Recent Inflows
Minyi Chen, CFA, Chief Operating Officer of TrimTabs Investment Research and Portfolio Manager of AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS) shares recent fund flow trends.
Leveraged Trades Also Set Bullish tone.
U.S. Equity ETFs took in $3.2 billion in the week ended September 10, reversing an $8.6 billion outflow the week before. Despite the latest inflows, these ETFs have shed $16.3 billion since the beginning of August, which is bullish in the short term from a contrarian perspective.
Leveraged Long Equity ETFs shed 13.7% of assets in the past week while Leveraged Short Equity ETFs added 1.8% of assets. Traders dumping leveraged long positions en mass while adding to short positions is a contrarian bullish signal, our studies find, because leveraged Stock ETF traders are usually poor market timers.
Stock and Bond MFs and ETFs Shed $3.2 Billion in September.
Stock and bond ETFs and mutual funds have given up a net $3.2 billion in September, adding to a $46.7 billion net outflow in August. Investors have redeemed a net $14.3 billion from Bond Mutual Funds this month, adding to a $35.3 billion outflow in August. Bond ETFs have taken in $3.5 billion this month, reversing a $7.6 billion outflow in August.
U.S. Stock ETFs have shed $1.0 billion this month, building on a $15.3 billion outflow in August. Stock Mutual Funds have taken in $701 million this month, reversing a $1.2 billion outflow in August.
Bond Mutual Fund Investors Sell Treasury, Muni, Corporate, and Foreign Debts Funds in Past 4 Weeks.
All the major Bond Mutual Fund categories we track lost assets in the past four weeks. Treasury Bond Mutual Funds gave up $5.1 billion (2.4% of assets), Municipal Bond funds lost $2.5 billion (3.0% of assets), Corporate Bond funds shed $793 million (0.1% of assets), and Foreign Debt funds shed $60 million (0.1% of assets) over the past four weeks.
Investors Dump Real Estate Mutual Funds in Past 4 Weeks but Favor Health Funds. Value Eclipses Growth.
U.S. Stock Mutual Fund investors redeemed a net $309 million (1.8% of assets) in Real Estate funds and $67 million (1.2% of assets) in Natural Resources funds in the past four weeks. Investors bought $94 million (1.6% of assets) in Health funds and $24 million (0.5% of assets) in Precious Metals funds in the same time frame. Value-oriented Stock Mutual Funds took in $339 million in the past four weeks while Growth funds gave up $573 million.
NYSE Short Interest Up 1.5% in Past 30 Days, But Signal Appears Neutral.
Short interest on the New York Stock Exchange rose to 13.9 billion shares as of August 31, a 1.2% increase from 13.75 billion shares on August 15 and a 1.5% rise from 13.70 billion shares on August 1. A sustained increase in short interest would be a bullish signal from a contrarian standpoint, our studies find, but the recent rise is so small that it’s having only a neutral effect on the TrimTabs Demand Index.
Spec Traders More Bullish on Gold, Less Bullish on Nasdaq. Optimism on EUR/USD Dips. Bullish Bets on Oil Unchanged. Traders Less Bearish on 10-Year Treasuries, Neutral 2-Year Note.
Speculative traders grew more optimistic on gold futures last week as the long-short ratio climbed to 3.4-to 1 on September 3 from 3.3-to-1 the week before. Bullish bets on gold are up 182% since hitting an 11-year low of 1.2-to-1 on July 9.
Speculative traders’ bullishness on tech stocks eased last week as the long-short ratio on Nasdaq futures dipped to 5.0-to-1 from 5.1-to-1 the week before. The Nasdaq futures long-short ratio hit its highest point since December 2010 two weeks ago and is up 64.7% from an interim low of 3.0-to-1 on July 2.
Speculative traders’ bets on EUR/USD futures grew a bit less bullish as the long-short ratio dipped to 1.4-to-1 on September 3 from 1.6-to-1 the week before, the first decline in the past four weeks.
Speculative traders’ bets on oil futures leveled off last week as the long-short ratio closed at 3.7-to-1, unchanged from the week before. The oil futures long-short ratio is down 10.6% from the y-t-d peak of 4.1-to-1 set on July 30.
Speculative traders last week became a bit less bearish on the long end of the Treasuries curve but turned neutral on the short end. Bets on 10-year U.S. Treasury futures produced a short-long ratio of 1.3-to-1 on September 3, down from 1.4-to-1 the week before. The long-short ratio on two-year U.S. Treasury futures, meanwhile, closed at 1.0-to-1 last week, down from 1.2-to-1 the week before.
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