...this is why one should be frightened as to what I call the...

...this is why one should be frightened as to what I call the GREAT UNWINDING.

The Great Unwinding of passive ETFs via retail redemptions - retail investors running for the exits along with margin calls causing price collapse !

You can see below redemptions are on the rise
In S&P for example, for every $1 redemption, that is selling 7c in AAPL, 7c in MSFT, 4 c in GOOG(L), 4c in AMZN, 2c in TSLA, 2c in FB. (26 cents of every $1 in the top 6 stocks). And this is 46 cents of every $1 in QQQ among the top 6 stocks

AND Margin debt at incredible height .

You have been given NOTICE again.

Passive ETF Redemptions is the most important dynamic in the market place today. USA Passive Funds are now logging outflows this is new, while every other global market is logging inflows.
2. Market on close imbalances (the last ~30 minutes of trading and especially when S&P gets posted at 3:50pm and NDX at 3:55pm). There are 2,844 ETF’s that are listed in the US.

• a) SPY has seen the largest outflows out of any ETF YTD (-$14.1B worth of redemptions) = rank 2,844/2,844 YTD
• b) IVV has seen the second largest outflows out of any ETF YTD (-$4.60B worth of redemptions) = rank 2,843/2,844 YTD
• c) QQQ has seen the third largest outflows out of any ETF YTD (-$4.40B worth of redemptions) = rank 2,842/2,844 YTD
• d) Next you have credit and treasury redemptions, which I get an expect more of: (HYG/TLT).
• e) IWM has seen the sixth largest outflows out of any ETF YTD (-$2.7B worth of redemptions) – note Lou Miller and team have a juiced up IWM short.

As a reminder, ETF sell = “you ask me for money, I sell”. In S&P for example, for every $1 redemption, that is selling 7c in AAPL, 7c in MSFT, 4 c in GOOG(L), 4c in AMZN, 2c in TSLA, 2c in FB. (26 cents of every $1 in the top 6 stocks). And this is 46 cents of every $1 in QQQ among the top 6 stocks. If you are a live market tick watcher (the MOC imbalances for sale get posted at 3:50pm EST), big redemptions in the biggest caps, means late day unwinds.
This is interesting. This $$$ is being deployed into (Financials, the total stock market, Energy, Value, Ex-US). This are the smallest segments of market cap (and impacts flows into sector specific trades, but not the broad based index level).


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Bucket 2: Retail Traders: Impact no dip buying, no weekly call option buying, no taking street short single name upside gamma
3. Retail Outflows are starting for the first time since opening accounts. Volumes have declined on both index and favorite trading stocks. All eyes on the 1-year anniversary of “GME” next week.

4. Leverage is elevated and this has limited any form of buying the dip (BTD).