The Ameritrade crowd has been consistently on the NASDAQ buy side throughout January and during this downturn. Since XMAS, they've distributed on only six days. They also used a lot of margin in January. Today, virtually all this buying is underwater, as much as 10-12% (and more for margin buyers), so it has to be getting painful for them, and perhaps some margin calls as well.
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The NASD cracked down on AMTD today for "carrying" customers on settlements, perhaps including margin calls:
marketwatch.com
When the market broke in 2000-2001, this type of "buy the dip" behavior gradually shifted after about the first 15% decline that stuck for awhile (spring of 2000). First they became less aggressive buyers (after 12%), then they stopped all together (after 15-18%), then they started selling (after 20%), and they sold on balance for months.
Mutual funds inflows are slowing, and I think demonstrate the same fundamental pattern. This week's AMG, shows the public still committing some money. If we break by another 5%, I'll bet it goes largely flat.
Flows: Mar 10
Independent Data on Fund Flows & Holdings
Equity funds report net cash inflows totaling $3.3 billion for the week ended March 10 with 59% going to funds investing in Domestic Equities ($1.9 Bil), ;
International Equity funds report inflows to all Emerging and Developed regions ($1.3 Bil);
Inflows continue to the Real Estate, Healthcare/Biotech, and Financial/Banking sectors;
Taxable Bond funds report net cash inflows of $942 million with most going to Corporate Bond funds investing in Investment Grade ($378 Mil) and High Yield ($308 Mil) securities;
Money Market funds report inflows totaling $1.7 Bil;
Municipal Bond funds report inflows of $18.2 Mil.
Speaking of buying at tops, the 3/11 Contrary Investor is entitled "Home is the Heart of the Matter", interesting demographics discussion about who the marginal buyer has been. |
