DC Lite #371

"ETF Investors are selling into the rally"

Author

Daily Chartbook
May 27, 2025

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1. Chinese exports. "This [EU] episode also suggests the US is not trying to isolate China, as at one point seemed plausible … April data show that it is finding new customers. US exports are down badly, but total exports are at an all-time high."

2. Labor market differential. "The share of respondents who said jobs were hard to get ticked up to match a cycle high in May, narrowing the jobs differential (the share who say jobs are plentiful less those who say jobs are hard to get)."

3. Equity ETF flows. "ETF Investors are selling into the rally — a behavior seen consistently in *major recoveries* throughout history ... This is a classic 'wall of worry' behavior ... If history is a guide: the market should grind higher over time, leaving sellers behind."

4. Panic Index. Goldman's Panic Index is close to 2 standard deviations above it long-run mean.

5. Quick recoveries. "Last month, the S&P was more than -18% below its all-time high. This Monday, the S&P was within -3% of its all-time high! These quick recoveries are signs of strong momentum and tend to be bullish for stocks over the next 3-12 months."

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DC Lite #370

"Silver extends its rally toward multi-year highs, but Q-CTA positioning has only just started to recover"

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DC Lite #369

"Narrative volatility is here to stay in today’s Bifurcation Nation"

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DC Lite #368

"Ultra Bond futures (UB) fall to lowest level since Nov. 2023"

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DC Lite #367

"If this turned out to be a bear market rally, it would rank as the fourth largest on record"

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DC Lite #366

"Retail traders went on a record dip buying spree Monday"

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