WHAT THE MARKET WANTS: A Clarification
Several comments to this week’s article on SeekingAlpha (“What the Market Wants: A Week of Murk and Fog”) have prompted me to make a few points of clarification.
First, regarding the controversy over my comment about “cash on the sidelines,” Sabrient uses a proprietary formula to track this very thing, with a combination of mutual fund cash, money market cash (cash that is frequently in the market instead of in money market funds), cash available from pension and endowment funds, short interest in the aggregate, and estimates of foreign funds available for domestic markets. We use this information internally, but not in any significant way since we normally are agnostic to short-term (less than one year) market direction. It is my personal opinion that there is a larger than normal amount of such cash on the sidelines at this point in time, and in my article was commenting that such cash was probably responsible for inexplicable bullish reactions to bearish news days. Read more…
