Even as the S&P surged back in April from its March lows, market technician Tom McClellan noted that investors have been fleeing one of the most popular ETFs on Wall Street. The SPDR S&P 500 ETF, symbol ‘SPY’, gives investors exposure to the stocks that make up the widely-followed S&P 500 index, and is among the most liquid and frequently traded ETFs in existence. McClellan noted that, despite rising more than 29% since touching its low on March 23rd, funds have been flowing out of the SPY. However, in good news for market bulls, McClellan writes that negative flows may actually indicate that the uptrend in stocks could continue higher. “This conveys the message that investors are not believing in the uptrend, which of course is a sign familiar to every contrarian: the uptrend could continue,” he said. The chart below shows daily inflows and outflows, with twice as many outflow days as inflow days during the robust April rally. (Chart from the McClellan Market Report).
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