Who Is Buying and Selling?

All the action today says bearish to me. I called the top on Saturday and nothing has dissuaded me. Utilities, consumer staples and real estate SPDRs are each up 1.50 percent or more with 30 minutes left in trading. This is bear market activity as I showed in the weekend post. The best case for bulls is this represents some pre-Fed nervousness and the whole market will shoot higher on Wednesday after Powell fails to credibly confront inflation.

I wonder who is buying and selling at these prices though. There is a lot of ink spilled on the topic of inflation being bad for stocks, yet shorts are near an all-time low. I'm sure options trading has picked up, but most of that is short-term neval gazing around derivatives of derivatives such as gamma. Are traders stocking up on 20-percent OTM puts on stocks while VIX is cheap? (I'm pivoting in this direction for 2022.) I sense not. Who has been buying a stock like Apple? I'm confident the "defensive" buying is fund managers dealing with inflows. Again, going back to my bear post this weekend, my sense is the defensives lead until the money flows stop, and then everything goes down. '

If I had to buy—I don't and won't— I'd be in consumer staples and then utilities, because I think the former have better pricing power aka bullish narrative. I saw this dirty diamond in WEC Energy (WEC), an upper Midwest utility.

Here is Proctor & Gamble up about 10 percent in the past two weeks.

Coca-Cola (KO). Is this the inflow/Santa Rally?