West Coast Commentator

Ongoing Observations on NYSE Volume

The "curse" of the 401(k): Trillions are sitting on the sidelines (money market with negative return after inflation - ours just yields 0.14%, no typo) and more flowing in constantly. There is no stop when this tide rises back into the market, as cautios and burned the fund managers might be.

Look at the cash ratios of the mayor stock funds (not counting individual investors going back into equities) - they are all increasing and burning a hole into the mind of their managers. A self-fulfilling prophecy of well-educated lemmings (which of those wants to fall behind in relative performance to the peers?). The market would be much lower if not for the 401(k). Don't bet against the market.Disclaimer: Just got back in Yesterday after the turn in the job numbers (second derivative > 0 as far as I can tell).