It is widely known that people fund their pension at the beginning of the year (and quarters), resulting in an inflow to the markets. Many traders try to front run the funding. I am hoping that some of you can tell me approximately when the pension money actually hits the markets. Thanks in advance.
Hi, When NASDAQ reached its all time high in March 2000, my friends were telling me that it would go up for another few years, because the baby-bloomers, retirees, fund managers, etc will continue to pump money into the stock market. When NASDAQ dropped from 5,100 to 4,200, people told me that there were trillions of dollars on the side line, ready to hit the market. Then NASDAQ hit to 3,200. I heard the same story again. Of course, later NASDAQ plunged to 2,200. Same story again. I have been waiting for the trillions of dollars to go to the market for almost three years. I have given up on front run the funding. The funny thing is that housing foreclosure is at 20-year high(or something like that). One of my friends is telling me that there is a lot of money on the side line ready to pump into the housing market. Should I believe them ?
Same cause same effects. On short term cycle the housing market (as the bond or gold markets) benefits from down stock market but on long term the flood money on stock market will break also the housing market. I don't really follow housing market but the cycle pic is shifted by a few years so it is longer than for bonds (only a few months). Welcome to the hypercorrelated world : there is no diversification safety for long term cycle. They created an inherently risky global system and they sell that under the name "market efficiency" and people will believe in it until even when it will collapse since marketing around it has been so great. In 1998 when Elliott Guru Prechter predicted 4000 for Dow Jones at the end of December I didn't believe him although I did believe in a crash for that year and believe for a new bullish market afterwards. Now 5000/4000 next year would not be so ridiculous.
WDGann: No, I haven't lost a lot of money recently. In fact I've been net short and making. I am looking to go long in the near future for a short term trade. Just wondering if anyone knows the specifics when 401K money actually hits the markets. I would guess a week after the end of the year.
shadow, I have it on good authority that it will hit the tape on Feb 5th 2003 between 1pm and 2:30pm. Brace yourself!!
Can a 401K contribution be made at any time during the calender year and up to April 15 for the preceding year? This is the case for IRA contributions. So there may not be a wave of funds hitting the banks and markets in a discrete time window.
Babak, Good try, but unfortunately, you are incorrect. The boyz are surprising everyone and putting in big orders to buy at the Market at the opening of trading. I heard it was leaked that day is going to be a down day(glitch in the Matrix), so they wanted to take advantage of the pre-market sell off.