Cash Is Trash As S&P Ends 50-Year Streak


  • Jason Goepfert

    Jason Goepfert

    Published: 2018-10-05 at 09:41:51 CDT

This is an abridged version of our Daily Report.

Cash is still trash

Mutual fund managers have refused to raise cash balances, despite rising yields on those balances. The latest monthly data shows that they’re holding only 3% of assets in cash, among the lowest in history.

Adjusting for rising interest rates, their “cash deficit” is now the widest since 2007, and among the most extreme in 60 years.

End of a 50-year reign

The S&P had gone almost 50 sessions without a 0.8% move either up or down, its longest since 1968. Thursday’s drop ended that streak. The ends of other calm stretches, when stocks were recently at a high level, led to further selling pressure).

Lotsa lows

More than 14% of securities on the NYSE sunk to a 52-week low on Thursday. That is – by far – the most when the S&P 500 was still within 1% of its 52-week high.

Bond scare

The TLT bond fund closed at a 3-month low with its volume over the past five days at a 3-month high, showing some panic among holders. That has led to a rebound a little over a month later only 31% of the time.

The post titled Cash Is Trash As S&P Ends 50-Year Streak was originally published as on SentimenTrader.com on 2018-10-05.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.


Follow us on Twitter for up to the minute analysis of market action.


Not ready to signup up for a free trial yet?

Signup for our Daily Lite email to receive highlights of our daily report, research and studies.



RSS Feed

Subscribe to the Blog RSS feed

Recent Blog Posts


As mentioned in...

Brought to you by:

Sundial Capital Research Logo