• 735 days Will The ECB Continue To Hike Rates?
  • 736 days Forbes: Aramco Remains Largest Company In The Middle East
  • 737 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,137 days Could Crypto Overtake Traditional Investment?
  • 1,142 days Americans Still Quitting Jobs At Record Pace
  • 1,144 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,147 days Is The Dollar Too Strong?
  • 1,147 days Big Tech Disappoints Investors on Earnings Calls
  • 1,148 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,150 days China Is Quietly Trying To Distance Itself From Russia
  • 1,150 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,154 days Crypto Investors Won Big In 2021
  • 1,154 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,155 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,157 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,158 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,161 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,162 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,162 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,164 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Investor Sentiment: Summer Doldrums

It is the end of the month. It is the end of the quarter. It is the week before a holiday. This gives the market a slight upward bias for the coming week. In the intermediate term, the "Dumb Money" indicator remains bullish to an extreme degree, and typically this is a bearish signal. This is a real head wind for the market. Since the "dumb money" turned bullish 8 weeks ago, the S&P500 has lost a little more than 1%, the NASDAQ 100 is up about 6% and the Russell 2000 is flat. For the week ahead, I suspect the shorter term bullish bias and the longer term bearish bias will make the markets choppy and range bound. It is the summer doldrums!

The "Dumb Money" indicator is shown in figure 1. The "Dumb Money" indicator 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.

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" is neutral.

Figure 2. "Smart Money" Indicator/ weekly

 

Back to homepage

Leave a comment

Leave a comment