Reply #21: I find this a bit disturbing in light of what I posted in #11. [View All]

[54anickel]

This is just IMHO, but it concerns me that there is perhaps a bit of an attempt to take advantage of ordinary folks for a bit of fleece. Probably nothing to it other than coincidence, but there's that bit of paranoia, CT in me that calls for caution.

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Bullish action should bring in new buyers. Instead, this past week we saw the market probe into new high territory and then reverse sharply. The absence of buyers emboldened sellers who appear to be taking to the task with a vengeance.

Bullish sentiment is at major extremes. Market Vane Bullish Consensus recently reported that 70% of market advisors are bullish. That's a two-year high and it stands well above the 61% reached in January of 2000.You remember 2000, don’t you? That was when the biggest stock market bubble in history finally topped out and sent the Nasdaq skidding more than 80% while the S&P 500 lost half of its value over the next few years. And today market advisors are even MORE bullish than they were when the bubble topped out!

Individual investors are not any more rational these days. The AAII reports that 61% are bullish, well above the 47% observed last year. In terms of mutual fund inflows, that translated into $40.8 billion in January. Individual investors have once again grown recklessly bullish, throwing record amounts of capital at the markets. Sound like an emerging, healthy bull market to you?

I realize that some of that bump in the January in-flow is caused by the way some 401Ks are set up. It would be nice to know what percentage that is.