The "Dumb Money" indicator, which is shown in figure 1, looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investor Intelligence; 2) Market Vane; 3) American Association of Individual Investors; and 4) the put call ratio. The "Dumb Money" indicator shows that investors remain extremely bullish.
Figure 1. "Dumb Money" Indicator/ weekly
The "Smart Money" indicator is shown in figure 2. The "smart money" indicator is a composite of the following data: 1) public to specialist short ratio; 2) specialist short to total short ratio; 3) SP100 option traders. The Smart Money indicator is neutral to bearish.
Figure 2. "Smart Money" Indicator/ weekly
Figure 3 is a weekly chart of the S&P500 with the InsiderScore "entire market" value in the lower panel. From the InsiderScore weekly report we get the following two insights: 1) The S&P500 ended the year with selling as companies with selling outnumbered companies with buying by a nearly 9-to-1 ratio; 2) in the Russell 2000, companies with selling outnumbered companies with buying by a 3-to-1 ratio.
Figure 3. InsiderScore Entire Market/ weekly
Figure 4 is a daily chart of the S&P500 with the amount of assets in the Rydex bullish and leveraged funds versus the amount of assets in the leveraged and bearish funds. Not only do we get to see what direction these market timers think the market will go, but we also get to see how much conviction (i.e., leverage) they have in their beliefs. Typically, we want to bet against the Rydex market timer even though they only represent a small sample of the overall market. As of Friday's close, the assets in the bullish and leveraged funds were greater than the bearish and leveraged by 2.45 to 1, and this ratio is shown in the lower panel. Throughout this rally when the ratio got above 2, it usually marked a short term trading top (as noted by the maroon colored vertical bars).
3 comments:
.gov is the buyer through banks with Spoo futures repod back to the Fed.
The Fed and Tsy spends all this money only to watch their work implode?
No way.
Anon: your premise makes sense but it has never been shown to be true.
See this link at ZeroHedge for more info:
http://www.zerohedge.com/article/trimtabs-asks-who-responsible-non-stop-market-rally-march-gives-some-suggestions
thanks a lot for the update Guy.
have a great 2010!
i´m looking forward to more of your great work.
Post a Comment