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ETF Money FLow

12/2/2014 7:56:54 AM

Good morning Traders,

Another chart I forgot to share with my morning update takes a look at the money flow data for ETFs back during the 2007 top.

ETF Money Flows

Observations? Again, as we've shown over the past money flow is usually a contrarian indicator. A peak in flow is usually associated with a top. The changes in the ETF landscape over the past decade has a significant impact on the signal from ETFs.

On the chart, you'll notice 4 peak readings. The first peak came just before (a few weeks) the 2007 top. The second peak came on the second bounce in the market that failed and really initiated the weakness. The third peak actually came at the second bottom as the market formed a secondary bounce, but again, this was the secondary b wave setting up the larger move lower. And finally, the 4th peak came just before the market fell off a cliff.

Note, there's also a 5th peak, just below the black line that has no significance here. It came in as the market was trying to bottom. But the market couldn't bottom until the buyers were out...

Now if you combine this with the NAAIM data (sorry for not matching time frames), you can see some correlation.

NAAIM exposure Index

It's the reason we started following these two data series - to get better ideas of when tops and bottoms are coming in. So stay tuned - our job is to get you positioned right in the market and hopefully over the period of you're life when you're investing and growing your assets, the cumulative effect of more educated decisions about when to buy and when to sell, will put you in a better position... Our business is in its 10th year and we want to thank our subscribers, both long term and new, for being a client.

Regards,

 


Also on a side note. Since the barometer is not allowed to give individual stock advice, we have brought in two great traders to advise you on stocks as we see a challenging market in 2015. So if you get a chance, both our traders have set up free educational email series teaching you their trading systems. Here are the links if you want to give them a try...

Ian Mitchell's Stock Trader: http://forms.aweber.com/form/90/174545590.htm

Damon Verial's Stock Gap Trader: http://forms.aweber.com/form/33/1216030333.htm

We're all about real traders providing real advice, helping newer and intermediate traders improve their trading. So I encourage you to try the email series.
As always, if you have any questions, please email us at info@stockbarometer.com

 

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