Friday, January 11, 2013

That Manic Moment

Biggest Pump and Dump Since Y2K
I don't know why it has to always be like this, but it's some sort of immutable law. This week, after four years of sitting on the sidelines, small investors have decided now is a good time to join the party, as they  moved more money into the stock market than they have since March 2000 - which was the all time high in the Tech Bubble. And yet, despite seeing near record inflows this week, the market closed less than half a percent higher for the week. Because, just as we learned the hard way back in March of 2000, there are always institutions on the other side of that "exuberance" trade, who are more than happy to dump their shares at these lofty levels only to buy them back at much lower levels from the little guy who is puking them back into the market. Been there, done that. Scroll down to see the Nasdaq back in March 2000 when we all thought Cisco was going to be the first trillion dollar company. Sound familiar?

And if Tom Demark is looking for a blow-off top with an overthrow, he should be looking at the Russell 2000 instead of the S&P 500, because we just found it:

Russell 2000 as of today's close:

Nasdaq, circa Y2K. What the fuck were we thinking?