Warning: Declaration of YOOtheme\Theme\Wordpress\MenuWalker::walk($elements, $max_depth) should be compatible with Walker::walk($elements, $max_depth, ...$args) in /home/customer/www/lmtr.com/public_html/wp-content/themes/yootheme/vendor/yootheme/theme/platforms/wordpress/src/Wordpress/MenuWalker.php on line 112

THE LMTR EDGE:

Join over 25,000 investors and get alerts for:
  • Market Timing Reports
  • Sentiment Updates
  • Chart of the Week
  • Weekly Podcasts
  • The Magic Number - Top Stocks

“Dumb” Money in Control

By John Del Vecchio and Brad Lamensdorf

Last week, we highlighted the TIR indicator as being very oversold and stretched to the downside. We suggested the odds favored a bounce.

Boy did we get one.

Stocks exploded higher. Especially low-quality stocks with a bit of “hair” on them. It was a tough week for short positions.

Even though these indicators have swung around a lot in recent months, major headwinds still exist for stock prices.

One headwind is that “dumb” money is in control.

Take a look…

“Dumb” Money in Control
“Dumb” Money in Control

The chart, compliments of SentimenTrader, shows the spread between Smart and Dumb money. It should be ovbvious…we want to follow the smart money. Those investors are in hiding. Smart money investors were very bullish at the lows in March and April. Since then they have retreated.

Now the dumb money is bullish.

What’s more is that dumb money is becoming more and more bullish. The trend is working toward the pre-pandemic levels.

Right before a major ass kicking.

The short-term bounce we expected has occurred. Intermediate-term though, there is a risk all of those gains and then some will be lost. 

Making big bets here on higher stock prices is placing a wager on the dumb money.

Did you know that Active Alts has teamed up with SentimenTrader to launch a long / short strategy? To learn more about how these indicators can guide your investments in these uncertain times, schedule a call with Brad here.


Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

Leave a Reply

Your email address will not be published. Required fields are marked *

2018 - All Rights Reserved © LMTR, LLC

Privacy Policy - Contact Email: info@lmtr.com