With the Dow Jones hitting new all-time highs and tech stocks skyrocketing this past year, a major warning flag is now waving as the public goes “all in” on stocks. Last time this happened stocks collapsed 23% in just 4 trading days!
From Jason Goepfert at SentimenTrader: “Mom and pop need to shake the couch cushions to buy more shares. Spare cash held by retail investors has fallen to one of the lowest levels ever relative to the value of the U.S. stock market…
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Mom and pop don’t have a lot of spare cash
According to the Federal Reserve, the amount of cash held by retail investors continues to evaporate. “Retail” fund are those held by the public.
As of mid-February, the amount of cash held in money market funds dropped to $665 billion, which is down by about $70 billion from this time last year (see remarkable chart below).
This cash hoard equals about 2.6% of the market capitalization of the U.S. stock market. The only time since 1980 that cash levels have been so low relative to the value of the stock market was from late 2014 through mid-2015, and a few weeks later that year.” King World News note: If you look at the chart below you can see that tech stocks tanked at the end of 2014 (left side of chart) and after the middle of 2015 the price of tech stocks collapsed quickly (a jaw-dropping 23% decline in just 4 trading days) when cash levels had plunged to record lows! (See chart below).
The Dow Jones Also Quickly Collapsed…
If you look at the chart below you can see that after the middle of 2015 the Dow Jones also collapsed quickly (a stunning 14.3% decline in just 4 trading days) when cash levels had plunged to record lows! (See chart below).
Today KWN will be releasing interviews with Art Cashin, Andrew Maguire and more!
The chart and commentary above are from SentimenTrader. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
***KWN has released the remarkable audio interview with Michael Belkin, the man who counsels the biggest money on the planet, discussing the mining shares, gold, silver, global markets, and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Rick Rule – I’ve Only Seen This Bullish Setup Twice In My 52 Year Career CLICK HERE.
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