Bank Of America/Merrill Lynch Of Equity Flow Trends

Equity client flow trends have returned to net buying according to Bank of America/Merrill Lynch BAC. The recent price correction in indices has some scratching their heads in confusion (nevermind that most are citing the Dow Jones Industrials sell-off as if America is an industrial nation anymore). In perspective, the recent selling is nothing in the broader terms of the Central Banks’ favorite trading asset (aka the S&P 500 e-mini futures) BOA/ML says clients have been buying stocks for the first week since mid-August.

“Private clients were also net buyers for the second week; this was the largest inflow by this group since April and the first time they were net buyers for two consecutive weeks since January.“

As for what’s driving the total collapse in energy prices in recent weeks, well:

“Energy saw the biggest net sales; this was the sixth consecutive week of outflows from this sector amid the decline in oil prices.”

Don’t worry though about continued selling, BOA/ML sees the magnitude of net selling in Energy compared to the four-week moving-average as “suggesting the selling streak could potentially be close to its end.”

Not much of a shock that the hedge fund managers (aka “masters of the universe”) waited to sell this market, which clearly drove the down trend as the all summer selling from Institutions, Private clients, and Corporate clients has been in place for months.

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Hedge Funds:

Institutional Clients (net selling since April):

Private Clients (net selling since February):

Corporate Clients:

As for the (Rolling 4-Week average trend) of market capitalization desirability among the newly minted global millionaires thanks to endless central bank buying of equity markets that may now consider themselves part of BOA/ML’s “private client” list:

Large Caps:

Mid Caps:

Small Caps: