All that matters is *fund flows*. It's all that mattered in early 2000, it's all that mattered as the bubble burst in April 2000, it's why things finally fell off the cliff at the end of 2000, and it's why things bounced like a Superball in January and April, 2001.
Bear market rallies may start with smart money buying, but they end with the dumb money providing support. As long as the idiots running mutual funds have OPM to burn, prices have support. When the money runs out, so do the rallies. Remember, over the course of the bubble, the mutual fund industry has systematically and methodically removed all the good fund managers. Anyone that could actually say the "C" word (cash) and wouldn't chase Naz higher was eliminated from service.
The general wave structure can be analyzed by E-wave theories, but fund flows are everything. We'll soon see if the $15B in fund inflows from a week ago have been burned yet. The short-covering is done, the individual investor is no longer a factor, and insiders sure as hell aren't buying at these high levels.
Dell actually falling gives you a hint that the fund managers are running on fumes again. If we close green, there's still Clownbux to burn. If we close red, we need to get in touch with our inner bears again...
BC |
