In fact Trim Tabs own historical charts show money flow decidedly positive from April 2000 onward for about 9 months even though distribution had been well underway.
Money flow is important but it is only a part of the story.
Money flow is chasing Supply, during the years building up to the bubble bursting, many stocks split, some several times. This has had a dramatic and lasting effect on the stocks distribution patterns post bubble.
Many in todays press are beginning to understand the divergence that exists in Small Caps who did not split during the bubble, these are some of todays very best investment targets. With low floats to begin with, many small caps are still at 1996 prices despite hugely improved fundamentals. Their bubbles were burst from q1/q2 2000 highs, by Short specialists, in many cases this has created the reverse scenario of all those companies who ran up and split, creating greater supply.
Many important small and mid caps floats remain Scarce, with a huge igniter built in, short open interest.
Some of these companies own the disruptive technology which will fuel the next business cycle.
More than ever, today it's a market of stocks, and not a stock market. The mechanics of distribution and accumulation should be elevated to an anlysis of all Supply factors to clarify a stocks current trend.
Dont be confused by the excess liquidity created over the last 5 years in some very popular stocks. Distribution is a long term program. On the other hand,despite the current low prices, many small caps will jump forth to lead respective sectors out of the hole. Many are graduating as we speak, to mid or even large cap status.
The biggest enemy of some high value small caps right now is Being Acquired at these near wholesale prices. Many, are down not because of fundamental performance, but because of Price suppression programs led by the trade. |
