Monday, September 20, 2010

Need retail investors/punters to push the market higher.

If you look at the trading value by investor category, you can see that retail investors "were there" prior to market peak. Just look at those runs - '93, '97, '99, '07, their level of participation is above 40%. Reaching 50% will make the market very hot. They tend to buy with their hearts rather than with their heads.

This group of investors, unfortunately, tends to have higher level of denial while the market began to slide down. They also tend to over-react by selling out at a distressed price., I am not talking down the market here. I am talking the current level of 20% participation from retail investors will be difficult to make the market very hot and spicy.

This post is just for information only.

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