This is what I meant by lack of retail investors in the stock market. The stock market is now traded mainly by hedge funds, and large banks being funneled money by the federal government. How else do you explain an increase in prices with a decrease in volume? It can happen, but it doesn't justify the move. It is the most dangerous place to trust your money over the long term. But then again with the Fed program QE to infinity, the stock market may never come down. It may actually accelerate. But then again so did the stock market in Weimar Germany in its early days of hyperinflation.
Just something to think about.
If they were ever to stop the QE program(which they can't) stocks would fall over a cliff and make the crash of 2008 look like a picnic. The only thing holding this thing together now is speculative money. Which changes its mind all the time. The last place I would choose to be.
http://www.zerohedge.com/article/nyse-common-stock-volume-plunges-sub-2001-levels
I couldn't agree more with you Chris. A healthy market is one which balances bull runs with more than 2-3 day corrections. This market is controlled by the algorithms of the hedgies and other professional managers.....once they kick into sell mode and the Plunge Protection Team is unable to stop the decline, it could be a big wakeup call as the public that still has 401K's goes into shock as the value of their retirement again gets sucked away by those who control the markets.
ReplyDeleteIt's a scary thought, yet seems inevitable. Waking up the public is the hardest part. And that's very unfortunate.
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