It seems as if market wide sentiment is turning for the worst. Where have has all the market participants gone? In my opinion people are simply hording cash because the “recovery” has turned into a big fat fizzle. If you think back to the beginning of the year there was much hype and hope our economy had seen the worst. Six months later here we are, nothing has changed, economic numbers are indicating our humming economy is not quit as rosy as the media wants you to believe.
Investors are simple down and out, they buy and get crushed they sell and get crushed, the up and down churn has destroyed the average investors confidence. WE NEED AVERAGE INVESTORS in this market to keep this market working.
Now that the market is perfectly correlated the trade is one sided. The machines have done all they can do, the damage is done. They propped us up, they convinced investors things were on the up and up for almost two years, the gig is up. Market participants are simply never going to come back until they feel the game is fair. Granted the market has never been fair, but it has never been as unfair as it is currently. This leads me to believe another large storm is brewing, Goldman Sachs is once again bearish on stocks, mutual fund outflows have not stopped for 18 weeks, we are quickly approaching the active trading season, 2008 round two? Have a good weekend.