Volatile markets mean time for short term trading! And Geof has the shortest term trade lined up — how’s 20 minutes sound?
Join the FREE live room here to get all the details!
Hedge funds are making a major reversal before our eyes.
You may recall that one of the topics we’ve discussed frequently recently is the massive gap between retail investing and institutional buying.
For most of the recovery so far, it’s been retail traders, NOT institutional investors, who were driving the rally higher.
In fact, institutions sold for four straight months and sold at near-record levels in March, and were still selling deep into April.
But suddenly, we’ve seen a massive reversal.
In May, hedge funds bought a record amount of global equities.
And the reversal from April into May is one of the biggest on record.
Now, Hedge Funds are fully bought into this rally. And they’re not alone.
But now the question becomes: is this a sign that the rally will continue for a while with new money flowing in?
Or is it a warning sign that we’re close to overbought and need a pullback?
All-time highs are not that far away at this point, and it seems likely we’ll test those levels in the coming days.
If we break them the rally could extend for a while. But will a bounce lower introduce new uncertainty?
In my opinion, it’s a good time to consider taking some profits and making sure that you’re protected in case there is a big pullback.
I don’t think it’s necessarily likely yet, but pullbacks aren’t always predictable and a buying frenzy across all investor levels certainly seems like the kind of warning sign you might want to watch out for.
Two more trading days this week, make them count!
To your prosperity,
Stephen Ground
Editor-in-Chief, ProsperityPub
P.S.: When you’re uncertain about what the markets are doing long term, it’s probably a smart time to learn shorter-term strategies that focus on a daily move. They can be incredibly powerful, and at 3pm ET today, Geof Smith is sharing one of my favorites. Join him here for all the details
