October has been downright scary for investors, so much so that institutional investors and hedge funds have been driving a widespread selloff in stocks. The S&P 500 plunged on Wednesday, but it's staging a dramatic comeback on Thursday. Clearly the volatility many hedge fund managers have been waiting patiently for is finally here.
Q3 hedge fund letters, conference, scoops etc
Is it too late to buy the dip?
Last week the S&P 500 was basically flat as private investors gobbled up equities while institutional investors and hedge funds continued to sell, according to data from Bank of America Merrill Lynch. It suggests individual investors think the bull market has room left to run. This isn't surprising given the number of high-profile traders and investors who are advising them to buy the dip, like Tom Lee of Fundstrat Global Advisors and Coutts Chief Investment Officer Alan Higgins.
Wednesday's panic-style selloff may suggest even individual investors are thinking about abandoning ship, but we'll just have to wait to see what this week's numbers look like. For now, we've got BAML's latest "Equity Client Flow Trends" report, which covers last week.
Biggest week of buying in months
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