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Posted on 04/01/2012 10:49:30 PM PDT by blam
JPMorgan's Tom Lee: One Thing Puzzles Me About This Stock Market Rally
Sam Ro
April 1, 2012, 9:44 PM
No one has made any money on it!
JP Morgan's Tom Lee spoke with Bloomberg's Carol Massar on Friday after the S&P 500 booked its best quarter in 14 years.
"Something that's been puzzling about this rally that started in March '09 is that the public hasn't really participated," said Lee.
"They pulled $300 billion out of the equity markets over the last three years. And trading volumes have been low, which means the institutions haven't really been participating in this rally either. Institutional volumes actually continue to shrink."
In other words, the stock market rally has largely been driven by a couple of guys, trading stocks back and forth to each other while most sit idly by on the sidelines.
But, is anyone really surprised by this lack of participation? The last three years have often been called one of the most hated rallies in history. And most "experts" have advised investors to be cautious.
Back in December when Business Insider surveyed Wall Street's top strategists, the lack of bullish conviction was reflected by the consensus year-end S&P 500 target of 1,363. At the time, the statement that epitomized the Street's wishy-washy sentiment came from Nomura's Ian Scott:
Putting things bluntly, either we have another very serious credit event with consequences at least as severe as the Lehman Brothers bankruptcy, or stocks are probably a buy.
(Excerpt) Read more at businessinsider.com ...
That bugs me too.
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The rally in stock market during first Quarter of 2012 is capitulation by holders of cash instruments such as CD’s, treasury bills & notes etc. who want more yields. I expect 15% lower prices ahead during 2012.
Trading volume is not really pushed up by institutional investors. Not when the average holding period for stocks is seconds to minutes. Traders are what pushes up volume.
To get huge drops in volume, even though holding by investors increase all that is necessary is for trading to slow down, which is what has happened.
I’m guessing that people are probably consolidating, because a lot of people went into some serious debt buying stocks, thinking they could pay it all back with the gains made.
“the stock market rally has largely been driven by a couple of guys”
It has been my contention for quite some time that this
is no longer your father’s market.
It is now a few fat cats and super computers doing the
pump and dump.
The average investor is being sucker-punched, as Soros laughs all the way to the bank.
It has been over forty years since I played the market.
It’s the Central Banks and their primary dealers that are pumping up the market.
It’s an election year.
so puzzling... if you’re brain dead
when you lower the value of the dollar...
everything valued in dollars goes up.
this country is lousy with fools and idiots
He told them 1% is better than 30% loss.
I suspect most want to keep the John Corzines of the world away from their cash.....
this seems to be a pretty difficult concept for people to grasp-media included.
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