The Most Important Number of the Week Was 30
Equity positioning is in the 30th percentile of a 15-year range. That means stocks have room to run.
We’re in the 30th percentile.
Photographer: Roberto Schmidt/AFP/Getty Images
The popular narrative around the GameStop Corp. saga this week was that the episode exposed the excessive froth in financial markets. What other explanation could there be for how an army of neophyte day traders was able to push shares of the down-on-its-luck retailer from less than $20 earlier this month to an intraday high of $483 on Jan. 28 and force some heavyweight Wall Street hedge funds that were betting against the stock to capitulate? There could be no clearer sign that a market top had been reached, even if Warren Buffett had appeared on the floor of the New York Stock Exchange and waved a checkered flag.
After all, most have heard of the Wall Street adage that when the dumb money — small investors — is buying, it’s time for the smart money — institutional investors — to sell. Such thinking would help explain why the S&P 500 Index had its worst week since October, falling 3.31%, and the MSCI All-Country World Index tumbled 3.57%, also the worst since October.