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tsptalk
08-10-2007, 08:43 PM
Per www.sentimentrader.com (http://www.sentimentrader.com):

... large commercial hedgers (aka the "smart money") moved to yet another record net long position of $29 billion, while small spectators (the "dumb money") moved down to $11 billion, one of their smallest net long positions in years.

alevin
01-11-2008, 10:17 PM
Per www.sentimentrader.com (http://www.sentimentrader.com):

... large commercial hedgers (aka the "smart money") moved to yet another record net long position of $29 billion, while small spectators (the "dumb money") moved down to $11 billion, one of their smallest net long positions in years.

I saw this article called ARE INVESTORS UNDERINVESTED? by Jeff Goepfert at Minyanville this morning after I finally completely bailed to the sidelines, been thinking about it off and on all day. Sorry I'm not sure how to post the website address as an active link, and I don't know what I'm doing with the upload feature either. I'm an ultra newbie at web page stuff.

Anyway he suggests the ratio between $ in money market vs. $ in the market vs same in 2000 suggests market is not oversold and that maybe either things aren't as bad as they seem to be going or a lot of people haven't freaked out badly enough yet. After reading, I got to wondering if this balance is the smart money/dumb money divide, and whether the greater amount not on the sidelines means there is still a lot of dumb money yet to bail out, or whether this is all the smart money sticking it out and/or already come back into the market, or a mixture on both sides? Comments anyone? I'm sure there must be a variety of opinion.

tsptalk
01-11-2008, 10:52 PM
Sorry I'm not sure how to post the website address as an active link, and I don't know what I'm doing with the upload feature either. I'm an ultra newbie at web page stuff.
http://www.minyanville.com/articles/index/a/15506

Bullitt
01-12-2008, 12:38 AM
Interesting article. The Mutual Fund Cash levels have been bearish for a few years now. This link is almost 2 years old, but it gives a longer time frame than Minyanville.

http://bigpicture.typepad.com/comments/2006/08/mutual_funds_ca.html

I wonder if the popularity of automatic asset builders (a monthly fixed contribution amount), Index Funds and Money Market funds have anything to do with the disparity. The amount of investors going at it alone is higher now than it was from 1960-1980 due to the advent of the internet. Also, what about Hedge Funds? They control 2 trillion US dollars in the world market place.

Looks like it may be an indicator of market tops, but don't hold your breath.

budnipper1
01-29-2008, 11:06 AM
Can Their Wish Be the Market’s Command?
By BEN STEIN
Published: January 27, 2008

The losses in the stock market since the highs of October 2007 are about 14 percent. This predicts — very roughly — a fall in corporate profits of roughly 14 percent. Yet there has never been a decline of quite that size for even one year in the postwar United States, and never more than two years of declining profits before they regained their previous peak.

In other words, traders are sending stocks down by a fantastically larger amount than is warranted by a recession or the losses in subprime. How and why does it happen? As someone said in the movie: “Forget it, Jake. It’s Chinatown.” It’s just Chinatown in trader-land, where money is made and there is no perspective.

So when you see the market gyrating wildly downward and hear some pundit saying it’s because of this or that data or this paradigm or that ratio, remember trader realism. The traders move the market any way they want, any way they think they can make money, and then they whisper a reason to journalists later in the day. Then the journalists print it or say it on television, and the amateurs believe it.
...And the traders snicker.

I just thought this article was interesting. Another writer said this was Stein's reaction to place blame on his recent losses in the market. I personally don't think much of Stein's opinions any more than the rest of the so-called market "Gurus".

http://www.nytimes.com/2008/01/27/business/27every.html?pagewanted=1&_r=1&sq=Ben%20STein&st=nyt&scp=1 (http://www.nytimes.com/2008/01/27/business/27every.html?pagewanted=1&_r=1&sq=Ben%20STein&st=nyt&scp=1)

hessian
03-09-2008, 07:04 PM
Not sure where this best fits...

A tidbit of wisdom, perhaps relevant for many of us here, and for today's market! (see link below for more, or run a Google on Keynes/Keynesian):

Keynesian Insight: 72 years ago Keynes observed that speculation had come to dominate true investing. In today's hyper-active trading environment, Keynes' lament rings all the more true. Finding a balance between focusing on long-term investing and capitalizing on short-term opportunities -- while controlling emotions -- is vital to successful investing.
http://safehaven.com/article-9467.htm
VR

james_smith
10-29-2008, 03:06 PM
The theories about smart / dumb money have been around forever. Has anyone made any money trading them?

tsptalk
10-29-2008, 03:29 PM
I don't trade stictly based on sentiment, but I find it the most reliable of all groups of indicators. After all, fear and greed are what move markets.

Frixxxx
10-29-2008, 07:05 PM
I don't trade stictly based on sentiment, but I find it the most reliable of all groups of indicators. After all, fear and greed are what move markets.
My Main Fear is that I'm not GREEDY ENUFF!!!!:laugh:

Guest2
10-29-2008, 07:36 PM
Crazy Times ! Before the Credit Crisis, anything above 50 or 60 in the VIX
was considered Bullish (if I remember correctly). We now have a new way
of looking at fear. Its called "The Sky's the Limit Index". We'll remember
this year for many more to come. :worried:

Bullitt
10-31-2008, 06:44 PM
The theories about smart / dumb money have been around forever. Has anyone made any money trading them?

Yes, but the game has changed as the leverage which has flooded the market in the past 20+ years is slip sliding away.

Sentiment indicators have been pretty useless throughout the entire 2008 but as far as I'm concerned, 1 year is the short run. I'll continue to stick with extreme sentiment readings as my top indicator of market conditions.

alevin
07-01-2009, 09:34 AM
Da boyz are at work again.

http://zerohedge.blogspot.com/2009/06/nyse-halts-transparency-feels-goldman.html



the ability of people (like you and I) to see the fact that a handful of banks, most specifically Goldman Sachs, constitute the majority of NYSE trading volume - and they're trading for their own book, not for customers, will no longer be disclosed.
This "back and forth trade" between a handful of institutions is nothing more than the old "pump and dump" game that has been played in the OTC market forever - and almost always screws the individual investor.
This is no different than you and I selling a house back and forth between us repeatedly, each time at a higher price. We both appear to be geniuses as we're both making a "profit", right?
Well, no. One of us is destined to take a horrifying loss if we do not find a sucker to make the final transaction with.
The embedded scam is that real gains require real parties at interest and not a closed system of a couple of guys passing an asset back and forth in a transparent attempt to "bait" someone else into becoming the sucker to offload that asset to.
The parallels to the housing bubble are not coincidence. There is no "value" being created nor is there any actual value appreciation taking place when people pass an asset back and forth at ever-higher prices. Only when there are lots of parties participating on their own, organically, does a market truly exist and does value align with price. Otherwise the so-called "price" is nothing other than a cheap parlor trick.
Zerohedge has been documenting this game now for months as Goldman in particular has come to represent an outrageously large percentage of the entire NYSE volume.
The problem of course is that, at least on paper, market manipulation, irrespective of what form of parlor trick you choose to use, is a serious violation of the law. Of course these violations of the law have been ignored for so long that nobody seems to care any more, but the fact remains that should the public come to believe that the NYSE has turned into nothing more than a gigantic pump-and-dump scheme operated by a handful of banks trading between themselves with publicly-guaranteed funds the consequences could be catastrophic.
[Karl is commenting on today's post by Zerohedge. NYSE responded to Zerohedge already.
http://market-ticker.denninger.net/

Let's see. That means GS or one of its program-trade competitors is going to be left holding the bag when the rug gets pulled and the house of cards disintegrates. Will probably take everyone else along with who's still in at that point. At what point does the market become SO corrupt that us little guys stop participating and pull our funds out, whatever's left of them? THAT will be THE bottom of the market cycle. Hmm. Well, guess I'll leave my current chips on the table in brokerage accounts and let them ride for now since I'm already in. TSP, still waiting for the bull market to appear, or for the next intermediate drop, whichever comes first.

tsptalk
07-01-2009, 12:04 PM
One of us is destined to take a horrifying loss if we do not find a sucker to make the final transaction with.
They can always count on Birchtree to be the sucker... err... buyer. ;) "Stocks are going up. Everything must be great!" :rolleyes:

Birchtree
07-01-2009, 12:09 PM
Yes give me your down trodden stocks - I'll buy as much and as often as I can. You have to own them to make any gains. And now is the time to build for the future while the value is the opportunity.

tsptalk
07-01-2009, 01:22 PM
Of course, I didn't make $500K in the last 3 months like you did, so what do I know? I hope you hang on to it.

Birchtree
07-01-2009, 01:41 PM
I still have to make another $500K to get my original grub stake back. And now I'm going to use the leverage of margin to help me out the rest of the year. I should be better than whole by the end of the year. If this market rips it'll make me a new one.

Steadygain
07-01-2009, 03:16 PM
the fact that a handful of banks, most specifically Goldman Sachs, constitute the majority of NYSE trading volume - and they're trading for their own book, not for customers

Alevie,
GS (and friends) have way more power than I ever dreamed possible.

The more I found the more I realized there is no way I'm ever going to elaborate on anything. Some things are better left 'undisclosed' so I'd say it's for the best.

wwwtractor
07-01-2009, 03:35 PM
Another reason for me to be in the I Fund.

azanon
07-17-2009, 07:13 AM
What I find insulting about the whole thing (and the strict contrarian mindset) is pretty much captured in today's forum write-up. The administrator asks us what we think... is this a bear or bull market, then once you answer, your REAL answer in his mind is the opposite since everyone is dumb but him. As he said, the current ratio is 1.05 to 1 bulls, which is a bear signal to him, again because everyone is dumb but him.

Hey TSPTALK...... I have news for ya.... there's no such thing as a 4-month-long bear market rally. Heck, 4 months is probably not that far off from the average time length for an entire bear market, much less a bull market rally! The more operative term is simply bull market, and the sooner you realize that the less money you'll lose. What appears to be a head-and-shoulders to you is really this; The first "shoulder" was when the market hit its bear market low (march 7), and started back up. The second "shoulder" is prove once again that even in a bull market, it's never a straight line up. You have dips, then you have new highs. Dip? check. New high? give it one more week.

Technical analysis only is so completely bone-headed. It assumes nothing that occurs day-to-day has any real relevance on where the market it headed. Wrong assumptions results in a false model.

azanon
07-17-2009, 07:16 AM
- delete

Bullitt
07-17-2009, 07:25 AM
That post above should spark some good conversation today. Azanon, I've got news for you. You are either dumb money or smart money- kind of like you're either on a Major League Baseball roster or you are on a softball team.

tsptalk
07-17-2009, 10:31 AM
Two things we can count on: I am, and have always understood, that I am part of the dumb money. And two, Azyboy will come by every once in a while and throw us an insult, to remind us all how much smarter he is than all of us.

I don't know if we are in a bull or bear market at the moment, but our seniment survey has guidelines which are currently telling us that the S&P 500 is still in a bear market. The 50-day EMA must move above the 200-day EMA before the system makes the switch to bull market ratios.

I am just saying, if anyone does feel like we are in a bull market than we are not on a sell signal. Sorry, no conspiracy theory here.

Guest2
07-17-2009, 10:35 AM
- delete


:nuts: BOINK! :nuts:

tsptalk
07-17-2009, 10:51 AM
I think he just deleted a double post SB.

Steadygain
07-17-2009, 12:08 PM
- delete

Azanon,
Hey man - there's probably no one on the entire MB that has better set the example of 'saying the wrong thing' AND 'getting too wrapped up in an 'emotional frenzy' as I'm posting.

That you put 'Delete' is good enough for me - but remember once you write something it's pretty much there to stay. So don't ever say something like, "I don't know any black man that has the ability to keep it in his pants'... "Don't let your emotions with these wonderful ladies go overboard" - 'Don't be too defensive and by all means try not to be insulting'

Since you brought the topic up - it's important to note that Tom can only be understood in light of his numerous other posts. Only when you reflect on the whole picture - his general grounding and everything - can 'the post you're referring to be appreciated'

In the same sense - this 'One Post' that obviously reflects some discouragement over the Market Conditions and such will in no way keep me (and the others) from seeing the REAL YOU.

Perhaps Tom's comments were strictly 'Neutral' and meant to make each one of us determine for ourself if this is the time to BUY AND HOLD - because we are entering a promising investment opportunity; or shoud we STAY in SAFETY.

That is something each - and everyone of us - has to decide.

PEACE MAN - BE COOL :cool::cool:

Birchtree
07-18-2009, 09:10 AM
I believe this week the smart money is still less bullish while the dumb money indicator has maintained a very bullish posture. In a bear market environment this widening divergence will usually favor the smart money and the market would eventually roll over. In a bull market, such a divergence has no consequence. This market now will not pause on the way up - the rest has been completed and now the games will begin anew. And the bull certainly will be extremely powerful.

Bullitt
10-11-2009, 05:30 PM
The "Dumb Money" indicator is extremely bullish; the "Smart Money" is neutral; insiders are net sellers; and the Rydex timers seem to be on the wrong side of the trend. But even these trends can become exhausted over time and they won't persist forever. In the absence of a melt up, meaningfully higher prices will not be achieved until we see lower prices first. Therefore, stocks are for renting not owning.Ha. Buy and hold was like, so yesterday Brah- Just take a look at any newspaper or magazine headline. Trading is what all the cool kids are doing today.

http://thetechnicaltakedotcom.blogspot.com/2009/10/investor-sentiment-i-am-changing-my.html

Bullitt
03-09-2010, 06:38 PM
The Dumb Money just keeps buying Calls. Happy days are here again.

8632

Bullitt
05-22-2010, 10:57 AM
ISEE came in at 64 on Friday and that means the retail investor is buying puts. I think that reading could have been lower if the Algos didn't blow out any weak bears in the last 5 minutes on Friday.