To: bobby beara who wrote (19023 ) 5/25/1998 12:52:00 PM From: Robert Graham Read Replies (1) | Respond to
Yes, the triangles appear to indicate "something" is going to happen. However, the funds are taking positions in stock, not shorting. So at least the funds think the market will remain the same or go up from here. But once new highs are reached, what will happen then? For instance, it is not uncommon for the market to fade and fall back below new highs as in a false breakout before successfully challenging new terratory. Look at what had happened during the market correction just before this year. There were multiple false starts which even had the "experts" on their ear. Or is the market going to move down to challenge its interim lows that it made during the market adjustment of last month. The market after its correction just before this year also did this before its run up to current levels. This is a volitile market. This is also a liquidity driven market. My concern here is that inflow of money into the funds have been substantially tapering off. Is this a pattern? Or is this a response to how the market has not been going anywhere lately? The public does not really understand the technicals of the market. So when the market is not going anywhere, they may buy into the hype that we are due for a big fall in this overvalued market. They do not understand that as long as there is money available to take positions in stock, the funds, and there are people willing and eager to chase prices up, the public speculator, then the market will continue up in a bull run. So as soon as the market makes new highs and there is a sentiment shift to a more positive outlook, then perhaps the inflow of money into mutual funds will once again be there. In other words, there is more to this picture than any triangle on a chart can provide.
