If you don't know about Dr. Brett Steenbarger you should put him on your daily check list. Here's a guy who was advisor to one of the largest global hedge funds and his insights on trader behavior and trading setups can only improve your trading skills and hopefully bottom line. He was out of circulation for a few years while acting in his advisory role but he's back and sharing his nuggets of knowledge with the blogosphere once again. Well worth your time for a daily wakeup, IMHO.
Following my comments yesterday Brett notes that since he first of the year SPY has seen net outflow,
which is actually something to be concerned about given the odds of a seasonal pullback and the net outflow of almost $ 4 Billion from mutual funds last month (although why anybody would have money parked in a mutual fund continues to mystify me...especially when there are so many liquid ETFs that can accomplish the same sector mining without the multiple flaws intrinsic to mutual funds.)
Today's rally fizzled,,especially in the Qs although we did see some buying strength into the close.
XLE saw red for the first time in a LONG while. The surprise was that XLU was similarly weak.
This weakness may be tried to the unlikely situation that XLU has been acting more like a momentum ETF than a safe haven index and it may be time for that momentum to fade.
Note the divergence of the SPY and XIV TrendX charts in the right side panel.
Our short term M3 ALERT is signalling cash.