Dump money indicates we should be more cautious
From Guy M Lerner’s blog the dump money indicator for the week seems to show exteme bullishness. This typically is not a good sign. We can’t tell much from the smart money since it is more neutral. By all means it could still rally for weeks.
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
Related posts:
- Trend Watch:Weekly Updates 20 Sep ’09
- The Money Diary: Making wise money decisions as a professional sportsman
- Expert’s Corner:Carl Swenlin still bullish but cautious
- The Money Diary: My financial planner/insurance agent make bad money decisions!
- 11 ultimate money management tips that will help you navigate a bear market
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