To many investors, buying stocks at all-time highs does not seem like a good investment plan. But, U.S. stocks have a lot of momentum. While U.S.-listed exchange-traded funds experienced nearly $12 billion in outflows in June, U.S. equity ETFs had nearly $5 billion in inflows. Money is coming out of commodities, international stocks and bonds and into U.S. stocks. Hedge funds are positioned net neutral despite the move higher in stocks. Their level of long U.S. stock exposure is below where it was the last time stocks were near their highs in mid May. It is likely that being underinvested is causing hedge fund performance to lag and hedge funds may have to invest aggressively to play catch-up.
The Delta MSI indicator is bullish and rising. We like owning high relative strength stocks. The ETF of high relative strength stocks (PDP) was just rebalanced at the beginning of July. Owning this ETF today provides an investor with an updated group of 100 of the best performing stocks in the market.