World Blog by humble servant. There all short and the fuel...The slingshot.

The recent report by the Commodity Futures Trading Commission (CFTC), shows that the professional investors have continued to bet on falling Dow Jones “short” as private investors are starting to bet heavily on rising prices ( “Long”). Professional investors remain suspicious of a further rise in the US stock market. The private investors’ view is exactly the opposite. The question is; Who will be right? There have been plenty of times that the professional is dead wrong and the average person on the street has actually outperformed the professionals. Reuters reported that 69% of hedge fund investors expected the second half of 2022 to be worse than the first half. So why are the professionals so pessimistic? When you live and breath the market every single day, it is hard to get a grip on vertical markets. The professionals, more so that even the average street investor, tend to do worse in such markets because it makes them uncomfortable. Then there is the self-gratifying notion that the market is over when the retail invest comes in. But they tend not to look at the fact that there is a huge difference between the average retail investor and the person who has never invested who rushes in to join the party at the top simply because everybody else is there.This is what I mean is the difference between the average retail investor and the fool who rushes in at the end because everybody else is there. It is when that final group of people rush in that marks the end of the market – not when simply average investors buy who follow the market generally. We have four actual groups: smart strategic big money (long-term portfolios) professional short-term traders the day trader who think he is limiting his risks program traders who try to arbitrage ticks the average retail investor the fool who rushes in at the last minute In most real good vertical markets, it is the professional short-term traders who keep trying to sell the new highs. This has been the group that has been bearish ever since 2020. They never saw new highs coming, and they still will try to sell every new high today. They falsely believe that they are “professional” and so they will be right and the average investor is the fool. But the average investor sees the trend for what it is, goes with the trend, while the short-term “professional” keeps trying to beat the market. Usually, the day trader who thinks he is limiting his risks and the program traders who try to arbitrage ticks will typically get caught when they suddenly find the lack of liquidity traps them in a position they cannot get out of.This is simple physics. The more you pull back on the projectile, the further it will travel. Why has Dow Jones Industrial in  the US share market continued to rally yet the vast majority keep calling for a crash? This is precisely how a slingshot operates. The fuel to the upside is created by that false move which can last for several years. They are still fighting the market and trying to sell the high, but they are constantly forced to buy it back.