Not sure whether I have mentioned this previously but was thinking about it this morning and figured I'd put the thought down.
Funds flow has all been into indexing and ETF vehicles over the past 3 or 4 years. ETFs are now the primary vehicle for many financial advisor and trader playbooks. This begs the question is the tail wagging the dog.
With investors hitting the ETF vehicle (sector, country, or other) before they worry about the underlying, markets are being buffetted by dull signals. Arbitrage keeps things in place, but the weight of money is coming from the macro side and it seems in keeping with the adage "shoot them all and let God sort them out."
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