#InstitutionsSold21.6BNasdaqFuturesInAWeek

Institutions sold a record twenty one point six billion dollars in Nasdaq futures. This happened while the Nasdaq index was going up. Data from Goldman Sachs shows that institutions sold twenty one point six billion dollars of Nasdaq futures in the week that ended on August 4. This is the amount ever for that time period. Seventy two percent of the activity was on the short side. At the time the Nasdaq itself went up by seven point one percent. This is a combination: institutions are reducing their investments while the Nasdaq is going up.

What does this mean?

The fact that institutions sold a record twenty one point six billion dollars in Nasdaq futures with than seventy percent of it being short shows that they are changing their approach. When institutions sell this futures while the Nasdaq is going up there are two main ways to understand it. One way is that they are just taking their profits after the Nasdaq had a run. Institutions are locking in their gains by reducing their investments. The other way is that they are getting ready for a change: they are building less-long exposure because they think the Nasdaq will go down later or they want to get in at a better price.

The numbers are interesting.

The Nasdaq going up by seven point one percent makes the selling more surprising. Usually when institutions buy or sell it happens when the market is going in the direction or when it is about to change.. This time the institutions sold while the Nasdaq was going up. This is the opposite of what happens. It makes the market wonder if the institutions were selling because they were making a profit or if they were getting ready for something

What does it all mean?

I think the data from Goldman Sachs is an indication of how institutions are investing.. It does not tell us what will happen next. When institutions sell this futures it usually means they are changing their minds about the market. They might think the Nasdaq is too high or they might think something else is going to happen. We will have to wait and see if they were right or not. The fact that seventy two percent of the activity was short just means that most of the institutions were betting against the Nasdaq.

So what is the conclusion?

Institutions sold a record twenty one point six billion dollars in Nasdaq futures in the week that ended on August 4. This happened while the Nasdaq was going up by seven point one percent. The fact that institutions were selling while the Nasdaq was going up is strange. There are two ways to understand it:. They were taking their profits or they were getting ready for something else. We cannot know for sure without information. The next few days will show if the institutions were right or not.

What do you think. Were institutions taking their profits or getting ready for the move? Share how you are looking at the flow.

This is my understanding of the data, from Goldman Sachs and how the Nasdaq is doing. It is not a recommendation.

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