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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: Crimson Ghost who wrote (35334)3/1/2002 11:24:04 AM
From: DlphcOracl  Read Replies (1) of 99280
 
George S. Cole: Regarding the Smart Money Indicator

I have noticed the same thing as well and this is important -- it is one of the most accurate indicators of the market and is a LEADING indicator. Having said that, it has about a 70-80 day lag or lead on the market. Since it peaked in mid-December, I think it implies a significant correction occurring in mid-March.

Don Hays noticed this as well and discussed it in his daily briefing of 1/28/02. His thesis at that time (and, in fact, in all his postings since then to the present) was that we would have one more powerful rally before the correction, since the "dumb" money often piles into the market as the "smart" money is exiting.

Needless to say, Don Hays has been dead wrong on this and the rally he was predicting has not happened. More importantly, the "dumb" money has not been so dumb, after all. The January money inflow into mutual funds was the weakest in over a decade and the individual investor has either remained on the sidelines or gone into bond funds.

If Don Hays' rally is going to occur, it has to occur in the next 2-3 weeks. Although today seems to be a powerful day, I am uncertain as to whether it is the beginning of a powerful, short rally prior to a mid-month correction or a one-day wonder.
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