Seriously? Corporate officers have been huge net sellers over the past 2 years. See insiderscore. Figures reported by ICI shows retail investors also huge net sellers over past several years.
Why does that matter ? The market is what the market is and things are worth what people are willing to pay for them. If anything, your premise that there is no retail participation would lend further credence to the "smart money" arguement supporting the rally. Corporate "insiders" are taking money off the table for their own company's discounted shares. The fact that the market has spent considerable TIME rallying and showing higher highs and higher lows over the long term means that market participants have accepted these current valuations as "fair" - and even "cheap" !
The Standard & Poorâs 500 Index will gain as much as 4.2 percent by mid-March if it ends the week above 1,365, according to Roelof-Jan Van den Akker, senior technical strategist at ING Groep NV in Amsterdam. âMost people are not believing in this rally. Prices are climbing a wall of worry. That means there are still buyers to support the rally,â Van den Akker said.
Really ? Isn't the assumption of good value based on the hypothesis that there is no double dip ? In 2007, the market was fairly valued as well. The question asked is relevant. IMO the market is propped up in part by intraday activity of HFT's, then hedge funds who play the musical chair game until mad Ben is out or decides maybe no more QE.
Well, if you trade for a living you get paid on price and not your own opinion about the "quality" of that price print you are looking at. And since HFTs and HFs are not going away, so what ? You buy them cheaper than you sell them - case closed. The market could really care less about what your opinion or my opinion is quite frankly. Did you not participate in the rally 20 percentage points ago because of QE and HFTs and HFs ? Wishing it so isn't going to change other market participants behavior. You really can't trade like that for a living. You accept it and build your system around price action and not your opinion.