Closing their Books

You saw vast underperformance in the heavily owned names, like tech, energy, and gold.  You saw outperformance in the hated, mainly the financials.  The funds are closing out their inventory and calling it a year.  Most of the funds have done terribly.  This is pure liquidation.  I imagine that with options expiration coming up, funds are shying away from spending more money on puts that end up becoming worthless, insurance that has killed them, and instead finally put two and two together that reducing positions is a much better risk management tool than buying puts every month that ending up going out worthless.  After this week, I expect the year end rally to finally come, catching those liquidators off guard underinvested as the market goes up again.