Mint Partners: "What's Going On Is That Strong Hands Are Selling To Weak Hands"

Tyler Durden's picture

Instead of the daily Bill Blain commentary (who today is caught in a deeply introspective debate whether or not climate change is or is not man-made) here are some observations from his Mint Partners stock-picking colleague, Steve Pervis, on where we are, and where the market may be going next.



Friday was another one of those days when the market basically went nowhere. Therefore, as we have stated time and time again, when the market doesn’t move, the technical picture doesn’t change. 


The conventional technical indicators remain mixed with fresh buy signals on the daily time frame and sell signals on the weekly time frame. Meanwhile, sentiment indicators remain as optimistic as ever. 


While speaking about sentiment, we have received some push-back from readers who have questioned our comments about just how optimistic sentiment is. We can assure you, without a doubt, that it is very optimistic. But don’t just take our word for it.


We suggest you click on the following link that will take you to the Gallup web site. As you will see, investor optimism is at a 17 year high. In fact, at 68%, optimism about the stock market is tied for the highest percentage on record! Just take a thorough read and let us know what you think.



Otherwise, in case you haven’t noticed, the SPX remains firmly ensconced between 2400 and 2500 where it has been since late May. So it’s going on four months that the market has been stuck in this range. We believe what we are experiencing is distribution.


By that we mean strong hands are selling to weak hands. The strong hands represent the smart money while the weak hands represent the less informed money. We’ve seen this many times in the past.  And believe us, the smart money usually comes out on top.


As we write, the December S&P 500 future contract is up 11.80 points indicating the bulls are rarin’ to go. If the market stays at this level or higher going into the open in N.Y. we will likely see a big rally day.

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Arnold's picture

Bag holders.
A dime a dozen.
Just ask Shoeshine.

YUNOSELL's picture

The crash always comes after the smart money can pass the hot potato to dumb money and grab that chair when the music stops

The_Juggernaut's picture

"Smart" money doesn't have a great track record.  Is Buffet selling?

indygo55's picture

Go get your shine box!

grasha87's picture

I have devised a free market currency/scrip to help alleviate recesions and unemployment that the Federal Reserve System has caused:

YUNOSELL's picture

nothing new here -- this basically is the business cycle!

buzzsaw99's picture

no such thing.  it was barzini (the fed) all along.  [/don corleone]

myne's picture

Is there an index for lot sizes?

In a strong market, you'd expect the lot sizes to be bigger. As hedge funds buy from each other, they'd do so in large lots. But when they're bailing out, to the suckers, lot sizes should fall.

Even just the top 10%of lot sizes should be telling. 

grasha87's picture

I have devised a free market currency/scrip to help alleviate recesions and unemployment that the Federal Reserve System has caused:

buzzsaw99's picture

sentiment my mutant behind.  distribution my freakish ass.  permanently high plateau is much more likely to be what we have.  lulz

Bill of Rights's picture

Ill just keep adding to my short eventually it will pay large...time is of no consequence.

ReturnOfDaMac's picture

Hope you don't run out of gas.  Central bank fuelled markets can remain irrational, orders of magnitude longer than you can remain solvent!  In other words:

a) Don't fight the FED


c) BTFD.

Anarchyteez's picture

I keep doing it too. But it is painful.

konadog's picture

If price discovery had any semblance of free market legitimacy, I would be right in there with you on the short side. With central banks printing money to buy stocks, I humbly suggest covering and hiding in tangibles and PMs until the everything bubble unravels. SNB (below) is just one. BOJ and others are also in on the action. This is cuckoo-ville.  New Tee-Vee show idea: Keynesians Gone Wild

RockySpears's picture

Edit a post/blog OK, but to miss out most of Bill Blaines blog is a bit silly,




allamerican's picture

yea dah..

those crazy enough get long flipping out, same for those that were short.

just sit back, watch the side show and pick spots.

no worys, just have fun printing..

A. Boaty's picture

Technical picture in a rigged market does not exist.

grasha87's picture

I have devised a free market currency/scrip to help alleviate recesions and unemployment that the Federal Reserve System has caused:

OverTheHedge's picture

Well, you could claim it was a double (triple) post, if they were all replying to the same person, but they aren't.

If you keep this up, you are going to come in for some seriously unpleasant abuse. FYI and all that.

Oh, and your corporate scrip idea is...interesting, but not relevant, in my oh so humble opinion. But I did read the page, from your spam over the weekend. See - it does work, but only if you are subtle.

Of course, if you are a shiny new bot, there's no hope for you (or us).