CONSENSUS SENTIMENT: POSITIVE
(Bear Market Indicator)
Gentle Ben’s 50 basis-point carpet bomb last Tuesday
triggered the second largest single-day investment into mutual funds. A total
of $10.4 billion poured into U.S. equity funds. To give you an idea how huge
this is, during the whole month of July, $10.75 billion was invested in US
mutual funds. This can explain quite a bit why the market surged 335 points
after the Fed announcement.
Consensus Watch’s Take: The July stat is
particularly interesting. The surge of cash from retail investors in July was
during the period where the Dow Jones average was making numerous record highs.
We all know what happened in August. Again pity the poor retail investor.
Always late to the party and alas first to feel the pain. Now we see the retail
investor jumping in again after Gentle Ben’s bailout. It doesn’t bear well for
the market in the short-term.
AKR
