JT, I know you're expecting a rally in the near term of Nov or Dec, but I would like to know your thoughts regarding current cash levels, and how they relate to future market prospects. Do you know how the 1.2 trillion compares to levels in the spring? What do you think this indicates? I know for myself, I had very little cash in the spring, but I have been mainly cash now for several months. I felt like I learned my lesson in the spring. Mainly, I learned the frustration of being fully invested and having to watch the market continue selling off and being unable to buy into the weakness.
I wonder if the large cash level of 1.2 trillion is a lot of little folks who learned their spring lesson. That makes me wonder how much of a bottom this is if there is so much cash on the sides that can swoop in and provide continued support. That is in contrast to a condition where nobody has any cash left to buy, so stuff just goes down and down, and nobody can buy it because they don't have any money left. Remember, in the spring there was the big hub-bub about all the margin calls, all the daytraders getting washed out. You don't hear those stories any more (at least in the media). So I wonder how much real capitulation selling is going on. It seems that the capitulation happens when everybody is in pain. But with the high cash levels, it just doesn't seem the pain is that high. On the one hand, cash is supposed to provide the fuel for a rally, but on the other, it seems to indicate a kind of buyer's complacency.
TIA, Mucho |
