Death comes to us all. Life's but a walking shadow | Sorry about that, I made that chart a couple of weeks ago and just got around to adding the labels last night late but I think the message is the same. Sure there was a lot of money injected into the market in 2010-2012 but even with the decline since then a good deal is still there. I didn't take the time to calculate and show it but I suspect that the total maximum positions of both long & short in 2013 (roughly 400,000 each or roughly 800,000) is higher than the total of 700,000 in 2010. My point is: when the traders see a opportunity they'll be there.
I don't know if the large traders collude or not but given that in almost every other sector of the economy that kind of collusion has been discovered it wouldn't surprise me. However it is possible that even the big traders just understand the system and each other well enough to feed off the economy without needing to actually talk to each other. It's kind of like wolves sharing the carcass, as long as there is enough they don't need to fight.
PS: you do bring up a good point about "short covering" being the initial phase of a rally. In fact I originally went looking for exactly that kind of evidence in the record. It's more apparent to me now that if and when something happens we'll see those shorts retreat quickly. The fact that currently the shorts are only about half as short as previous suggests they are already positioned for a move.
Edited by 1234 1/4/2016 07:13
|
Sat, comment on Funds "leaving" or "not leaving".
