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Strategies & Market Trends : Classic TA Workplace
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To: Win-Lose-Draw who wrote (129315)2/9/2006 2:35:50 PM
From: bcrafty  Read Replies (2) of 209892
 
WLD, for the purposes of discussion on sentiment matters, somebody has to be generally defined as the smart money and someone as the dumb money, even though the "smart" money may appear to make "dumb" moves from time to time.

I had a similar discussion with Shack and AA a few years ago when AA commented that at that particular time the Rydex traders appeared to him to be "the smart money" and I admonished him that getting into a discussion like that is confusing and becomes a word game: either the Rydex trading is a contrarian indicator (and those people are to be faded) or it's not. But just like a broken clock might be correct twice a day, the dumb money can appear to be smart from time to time in the short term.

I don't set the rules here, but I think it's generally accepted that for the purpose of sentiment discussions the big money boys are the smart guys, and little traders like you and I are the dumb money. Before you cry "you and I are not the dumb money; it's those guys who know nothing about TA and who trade on stock tips from cab drivers and get in at the end of trends when everybody's buying" I don't think that whoever devised this sort of contrarian analysis makes such distinctions: instead it's more of a "big money" vs. "small money" sort of thing.

Now then, if you really want to blur the terms consider this idea: if an big institution like a mutual fund is the smart money, and you are a mutual fund holder, then you are the smart money. How about that? <g>
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