A contrarian signal if there ever was one. The crowd is always wrong.
Bond guru Jeffrey Gundlach http://www.businessweek.com/articles/2012-05-10/jeffrey-gundlach-bond-savant told investors during a Tuesday conference call to short the S&P 500 (like SPY or contra funds) and go long the Shanghai (like FXI).
Note: Gundlach was the individual that offered a $2 million reward for the return of his stolen art and a rare exotic auto from his Santa Monica home - all now recovered and the perps arrested. Last year, Gundlach told investors to short Apple, “I hate things that go vertical.” He was right.
If that were true, it would be easy to make money by shorting when mutual fund inflows are high and going long when they are low. But there is no evidence that this strategy makes excess returns over a simple buy-and-hold strategy.