What is Dumb money?
In this article we raised possibility of what might happen in the coming months in the U.S. stock market in the wake of several signs that are evident in the middle of the euphoria.
The SPX market had a steady rise since 2008 of about 150%, it’s really encouraging an exaggerated increase in part by expansionary policy by the Fed has already announced that will stop.
The price-earnings (P / E) ratio reached values of 100 when a ratio of 30 is considered high. Small investors to enter the market perceived belatedly increasing euphoria and entry dumb dumb money or money. The bull / bear ratio indicator is above the bear almost 4 times indicating that the majority believes that market is bullish tendecia confirming a strong correction soon.
This time will no be different to what happened in 2011 when it fell to 10%. For some who see an opportunity countertrend positions this would be the time to act.