Retail Investors Undeterred by Volatile US Stock Market

Retail Investors Undeterred by Volatile US Stock Market

Retail Investors Undeterred by Volatile US Stock Market

$DIA, $SPY, $QQQ, $VXX

Financial advisers across the US say that the volatility in the US stock market has not yet curtailed the appetite by small participants to put money in the stock market.

Approximately 52% of Americans own stocks either directly or through a mutual fund, according to the Fed. Those holdings help underpin the $5.3-T of assets invested in 401(k) retirement plans, according to the Investment Company Institute.

Some advisers said clients asked them to add to the market Monday and Tuesday, helping fuel the “buy-the-dip” mentality that has prevailed in this Bull Market since 8 November 2016..

It is a different story for small and institutional investors exposed to obscure, leveraged ETFs(exchange traded products) linked to the stock-market volatility.

The S&P 500 traded lower Thursday is now down slightly year-to-date after gaining nearly 6% in January, its best performance for the month since Y 1997.

The SPDR S&P 500 fund, the world’s largest ETF, lost $66-M in investor outflows Wednesday, after losing $17.2-B over the previous 4 days. The fund brought in a record $19.8-B in investor inflows in January.

Investors trading in their 401(k) retirement plans moved out of equities on Monday and Tuesday, but began buying back into stocks Wednesday, according to the Alight Solutions 401(k) index, which tracks $200-B in assets.

Overall, 37% of individual investors remain bullish, a 7.7% decline form the week before and slightly below its historical average of 38.5%, according to the AAII Investor Sentiment Survey.

Bearish sentiment rose to 35%, a 6.3-point gainer from the week before.

Overall, companies in the S&P 500 are posting Q-4 earnings growth of 14.3%, while 77.9% of companies are besting analyst estimates, according to Thomson Reuters data.

The majority of our managed money clients are Bullish, and they do not feel like the recent selloff is going to be the catalyst that ends everything 3,000 days into this Bull Market, further that a correction (-9 to 11%) is healthy, and a buying opportunity.

The DJIA finished lower Thursday, and is off 10.4% from its 26 January highs.

Instead, our clients are moving more money into small and mid-sized companies that may trade at lower valuations than large-cap stocks.

There is a lot more optimism today than there was a few years ago under the Hussein Obama Admin, and we believe that it is warranted.

Thursday, the major US stock market indexes finished at: DJIA -1032.89 at 23860.46, NAS Comp -274.82 at 6777.16, S&P 500 -100.66 at 2581.00

Volume: Trade on the NYSE came in at: 1.23-B/shares exchanged

  • NAS Comp +2.2% YTD
  • DJIA +0.7% YTD
  • S&P 500 +0.3% YTD
  • Russell 2000 -1.8% YTD

HeffX-LTN US Major Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
8 February 2018 QQQ 156.2 Neutral (0.04) 145.42 157.83
8 February 2018 DIA 243.32 Neutral (-0.05) 233.34 253.73
8 February 2018 SPY 261.18 Neutral (0.08) 251.57 273.48

 

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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