Where is the dumb money? Why has this been the “Most Hated Bull Market” ?
I believe people remember 2009 and they know that at some point there will be a crash and therefore better entry points (if they can even afford to buy stocks). But what to do about the struggle between those who need stocks to support their retirements and the need for those same accounts to be able to sell to others who are willing to enter?
Enter the Federal Reserve and the chart above. And if that isn’t enough, the Fed is reportedly considering lending directly to the Hedge Funds and Small Banks through the FICC. That is a green light to Hedge Funds to start making bigger bets in what else? The Stock Market. Hot Potato. Who will end up holding it?
The chart below shows the IMX – the index TD Ameritrade publishes to show the momentum of the retail investor. As you would expect, the rising IMX is likely to be an inverse of the S&P500. As the “Dumb Money” rises, look out below. If you don’t know who the sucker is, it’s probably you.