We know the odd lot theory... A technical analysis theory based on using odd-lot trading behavior as a contrary indicator, under the assumption that odd lots are traded primarily by small investors who are on average less experienced than institutional investors. The theory has declined in popularity as historical data has failed to support it. http://www.investorwords.com/3384/odd_lot_theory.html We all know the booming housing market is coming to an end. Does 24-7 broadcasting of shows like "Flip That House", and "Sell That House", and "Curb Appeal" and ... (-> infinity) replicate the odd-lot theory for the housing market?
This is just an endless variation on the JP Morgan story: In 1929... when Morgan was given a stock tip by his shoe shine boy... He realized that stock Mania was out of control. As a general rule... When totally unqualified/unsophsticated mooks are eager to "speculate" in a particular market... It signals a Mania and is a strong sell indicator. In 1999... I got dozens of inquiries from friends who knew next to nothing about the markets... About how to invest in "Technology Funds". My standard response, "I don't give investment advice." The really, really "smart" ones... Were loading up on Northern Telecom at > $100/share.
From watching days/weeks of T/S sales the odd lot theory does not carry much weight. The only times that it warrants attention when the order size is significant. i.e. 134 vs. 56,431 shares being traded.
Sentiment is one thing; a well-timed signal another. How many got taken to the cleaners trying to short tech in 99 to the first quarter of 00?