CFR

The market has been really difficult these past few months. Well, to be honest, these past few years. It seems though that finally the retail army has been filled with fear and we saw retail flows sell en masse last week (the week before we saw institutional selling) while institutions started buying again. Although this by itself is not a reliable indicator on which to take action, it does show that ‘the smart money’ is starting to nibble at equities again. There is also around $33bln worth of US equity buying to do before the end of the quarter in order for pensions funds to rebalance and remain withing legislated asset allocations. Add quarter end and the ‘window dressing’ phenomenon and you the makings of a bull potion. Bigger picture wise, there is no real change and the world economy still looks very much in trouble, but in the short-term, Friday’s bounce might have legs for another few days.