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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (200165)	5/4/2009 4:17:32 PM
From: DebtBomb	Read Replies (1) \| Respond to of 306849

'Smart money' starts to bail on stocks' rally Nick Godt On Monday May 4, 2009, 1:56 pm EDT NEW YORK (MarketWatch) -- After more than eight weeks of a rally, stock market behavior is close to exuberance, say "smart-money" strategists who view factors such as rising participation and positive reactions to most news as tell-tale signs that it's time to take money off of the table. "Just like when too many participants bet on the same horse the betting odds on that horse go down, the 'betting odds' of making money in the short-run have been greatly reduced after eight weeks into this upside skein," says Raymond James market strategist Jeffrey Saut in his latest research call. "We have made a lot of money over the last eight weeks and continue to think the trick from here will be to keep that money," he said. Saut has taken his trading account back in a cash position, and has taken defensive positions in case of a market correction. On Monday, stocks received yet another upward jolt, after a realtor trade association reported a rise in pending home sales in March, fueling ongoing optimism about a housing and economic recovery. The Dow Jones Industrial Average (DJI:^DJI - News) was up 188 points, or 2.3%, at 8,401. The S&P 500 index rose 21 points, or 2.5%, to 899, and the Nasdaq Composite (COMP - News) gained 32 points, or 1.9%, to 1,750. After closing at a 12-year low on March 9, the market, as measured by the broad S&P 500 index, has now rallied more than 32%. But veteran investing advisors, such as Pimco strategist Bill Gross, believe the market's recent hopes over an economic recovery might be overdone. "Do not be deceived by the euphoric sightings of 'green shoots' and the claims for new bull markets in a multitude of asset classes," Gross wrote in Pimco's May outlook. "Stable and secure income is still the order of the day." Smart is as smart does So-called "smart money" investors tend to rely on contrarian indicators: Just as a social trend often starts fading after it makes the covers of many magazines, too much euphoria by too many market players often leaves little room for further upside in stocks. As the financial crisis and global recession drove stocks to 12-year lows, investor sentiment got so depressed that the slightest bit of better-than-expected news became potential fuel for stocks to rise. But after a two-month run, investors are now becoming more demanding. "Simply beating reduced earnings expectations is helping in the short term but in the long term, one must have earnings and revenue growth, not merely better-than-expected contraction," said Dan Greenhaus, market strategist at Miller Tabak. "In light of the broader issues facing the global economy, muted earnings and revenue growth should be expected and with it, muted stock prices cannot be far behind," he said. finance.yahoo.com