With continued uncertainty in key global markets, here is a look at what the “smart money” is doing right now.
The Smart Money isn’t buying it
From Jason Goepfert at SentimenTrader: “Almost six months ago, in July 2016, mainstream financial headlines were remarkable similar to what we’ve seen lately:
Dow 20,000? Don’t laugh. Bulls are alive and well (CNN Money, July 15, 2016)
Don’t let desperate bears scare you into exiting stocks (CBS News, July 18, 2016)
Investors have every conceivable time frame, but it’s true that if one had a longer time frame and held on to their stocks, they’d likely be better off now than they were then, so huzzah. But the curious part is that while mainstream sites like the above were making fun of being bearish, smart money traders were happily selling to them…
To hear which legend just spoke with KWN about $8,000 gold and the coming mania in the
gold, silver, and mining shares markets CLICK HERE OR ON THE IMAGE BELOW.
At the time, Smart Money Confidence had dipped below 20%. Just like now (see stunning chart below).
Since we began compiling this model in 1999, there have been 82 trading days when Smart Money Confidence was 20% or below and the S&P 500 was within 0.5% of a multi-year high. Of those 82 days, only 16 showed a positive return over the next three months. The S&P averaged a return of -2.0%, with risk nearly three times larger than reward (-6.0% versus +2.2%).
Those days were clustered into 7 distinct time frames, shown on the next page when the Smart Money first dropped below 20%. We can see that even using that first day as a trigger, stocks showed a positive return three months later only 1 out of the 7 times. The thumbnail charts show how any further short-term animal spirits were beaten back quickly enough and led to those gains being erased during a subsequent pullback.
It Has Paid To Sell Any Further Rallies
We rarely see such a disparity being Smart Money and Dumb Money like we have now other than initial thrusts out of protracted bear markets. When we do, it has paid to sell any further rallies with a medium-term time.
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 now released the extraordinary audio interview with the man who advises the most prominent sovereign wealth funds, hedge funds, and institutional funds on the planet, Michael Belkin, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***KWN also released one of Marc Faber’s greatest audio interviews ever and the overseas line was crystal clear for the recording. Faber covers the great danger facing the financial system in the coming year, what his predictions are in 2017 for global markets, stocks, bonds, gold, silver, mining shares, etc, what investors should be doing with their money right now, what has the wealthy so worried in 2017, how Trump will impact major markets, and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Jim Brown, Jeff Gundlach, Doug Kass, Art Cashin And Others Discuss What Surprises To Expect In Major Markets CLICK HERE.
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