Monday, August 2, 2010

Investment Sheep

Last week I did a telephone interview with David Pescod’s Shop Talk (CANACCORD Wealth Management) and this is a clip

BC: There is nothing wrong with the market, the only thing wrong with the market right now is that people are afraid to take on risk and that could change on a dime. It could change at midday of any day. When it changes, it will change very quickly and catch most by surprise. It could change in the last hour of trading today, you know you just don’t know when that will happen but it will be a very sudden, quick, take everybody by surprise. So I wouldn’t wait until the fall, I would be ready for it right now. All we need is
a change in sentiment; there is nothing technically wrong with the markets.

DP: One thing we notice as brokers of course is the amazing quiet out there. Volumes are just nonexistent it seems.

BC: Everybody is asleep.

DP: Is it that they are asleep or that they are afraid?

BC: They’re afraid. They are sort of in a fearful, almost comatose state. Fear of doing anything, and that will change very quickly. It’s like a bunch of sheep cowering in a corner waiting for a storm that doesn’t happen, and all of a sudden when the clouds part the sheep are right back in the meadow again and very quickly they will just move all together.

Our chart is the inter-day NYSE action on transportation bellwether Canadian Pacific up almost 2% - we are above a rising 40 wk MA, the relative is strong and we are flirting with a new 52-week high. I have no idea why the investment sheep are on the sidelines.


chrispycrunch said...

Another way of describing the market as being asleep is that the market is mostly being traded for ETFs and HFTs. Flash crash in May 2010 illustrates what can still happen even though the market appears to be "stable"

雅王任 said...

GOOD IDEA~thanks............................................................

玄王季玄王季玄王季 said...

信心是命運的主宰!! trust yourself!!!............................................................

Anonymous said...

Hello Bill Carrigan

Definitely got a rise out of me with the term "investment sheep". Firstly, some context before I res[pond to your comments; After 20 years of watching "Professionals" ( Portfolio Managers) consistently lose my money, I decided I couldn't do any worse. So as a retail trader with 15 years experience , I have now become very cautious ,particularly on the S&PTSX. IN my opinion, a retail trader stands no chance in a low liquidity market- JUST TOO EASY TO MANIPULATE. Wall St corruption, The incompetence of the SEC ( Does Ont have a Regulatory Body? - Seldom hear from them, the Flash Crash ( I did not lose one cent but it sure shook my confidence.
So what to do? Answer: Step Aside if you believe the market IS NOT Fair, Free or Stable.

So I prefer to casll it a lack of confidence, based on years of trading in the trenches. Not FEAR Bill.

So I trust you distinguish "investment sheep" from some traders that have the descipline to Step Aside.

Always appreciate your bligs and articles. R.