The market will turn south when sentiment turns bearish. Not until then. The time to short is when you hear the delivery guys talking about going "all in." Fuel from the Chinese bonfire is providing plenty of lift off energy for equities and corporate bonds. This means that specs are at risk of getting crushed by the retail bulls as evidenced by this latest piece from Reuters :
* Inflows to mutual funds more than $11 billion last week
* Cash returned to U.S. stock funds aided surge
By Erin Kutz
BOSTON, July 29 (Reuters) - U.S. mutual funds had the largest investor cash flow last week in five weeks, reflecting rising confidence in U.S. stock markets and increasing interest in bond funds.
Investors poured more than $11 billion into all categories of mutual funds in the week ended Wednesday, July 22, up from $6.6 billion the week before, according to estimates by the Investment Company Institute, an industry trade group. The inflows were the highest since the week ended June 17, when mutual funds attracted $11.1 billion.
Heightened investor interest in stock funds boosted the surge last week. U.S. equity funds had inflows of $438 million last week, a reversal from the week before when investors pulled nearly $2 billion out of the fund category.
The bounce in domestic stock funds came alongside a string of second-quarter earnings results last week. The Nasdaq rose for the 11th straight day on July 22, with strong earnings results from Apple Inc APPL.O and Starbucks Corp (SBUX.O),
widely seen as indicators of consumer confidence. Discouraging results from banks pushed the Dow Jones industrial average off a seven-day winning streak last Wednesday.
That did not stop investors, however. Foreign equity funds continued to capture investor cash last week, with nearly $1.9 billion in inflows, up from about $1 billion the week before.
Bond funds accounted for the vast majority of all fund inflows last week, garnering nearly $8.2 billion in investor cash, more than $600 million above the previous week.
Investments to hybrid funds, which invest in stocks and fixed-income, swelled more than twenty-fold last week. They had inflows of $592 million, up from $23 million during the week ended July 15.
The Investment Company Institute estimates account for data from more than
95 percent of industry assets and are adjusted to reflect industry totals.
(Reporting by Erin Kutz; editing by Andre Grenon)