Don,
long term lurker and appreciates your Index Updates like so many here. Never felt there is much on the TA stuff that I can contribute so I don't post. The bearish sentiments are picking up steam these days. A contrarian may suggest that this is the best time to buy, when visibility is poor and panic selling rules the day.
A number of posts ago you mentioned AMG Data's mutual fund inflows. I have followed that site for a while and find it unfortunate that the fee based portion is prohibitively expensive for the individual investor. However, I find the information posted ever Thursday afternoon very helpful, though delayed somewhat.
Here are some of my observations:
Period ------------ Average Weekly Mutual fund inflow
Jan 1,98 to 9/16 --------- $1,826 billion
1st quarter 1998 --------- $2,444 billion
2nd quarter 1998 --------- $2,167 billion
3rd quarter 1998 --------- $838 million (2 more weeks to complete qtr)
Trim Tabs reported August 98 being the first qtr since Sept 1990 that mutual fund has net outflow of $2.7 billion.
Aside from AMG and TrimTabs, there is another service, ICI, that provides mutual funds inflow data. Unfortunately, all three services never report the same numbers for the same time periods, sometimes with wide discrepancies.
Nevertheless, the AMG data clearly indicates a downtrend in inflows. Is it adequate to confirm a panic selling is occurring, as some of the wall street bulls want us to believe and suggest this is the best time to buy? I opine that we are not even close.
My guess is when we see the AMG data turns negative for a few weeks, in at least the ($5 billion) outflow range, then we may start calling it panic selling.
Changing subjects. Regarding the tick that you mentioned last week, I still don't see the correlation or the significance to the indices. While it is logical that a big positive tick should result in a strong up market, or vice versa, what purpose does it serve as an indicator? Care to enlighten?
Ramsey |
