Hot Rolled Futures: Ferrous Markets Under Pressure

Written by: Andre Marshall, Crunchrisk LLC

The S&P 500 market today was higher still up to 1563 on the index. As I mentioned our long awaited target was 1542, but as the all time high was 1572 it was hard to imagine that the market would just turn back and correct being only 30 points from the high. And so here we are getting ready to test those highs it looks like. This means we are 5 percent higher already from the Feb 28th dip, 12 percent higher than the Dec 31st level and 16.7 percent higher than the mid-November correction. We had record inflows into the market in January and February, and this is clear sign that retail money is getting back in. The money left the market in the years ’09, ’11 and ’12 at a total monthly rate of those three years at approximately $35 billion per month. Well, it is now coming back in all at once at a rate of 40 billion per month. For the market, this re-entry of retail money is usually the last phase in a trend. Not sure whether the market takes 6 months or a year to re-invest, but we are definitely in that phase.