22 replies to this topic

[typicalbear]

The current liquidity pool is made up of profits being re-invested into stocks.

 

It seems that this requires several liquidity pools.  Assuming that those in the "profits" liquidity pool sold stocks to those who now own stocks, where did those who now own stocks get their liquidity?  Further, as the market goes higher, will those in the "profits" liquidity pool be re-buying

stocks at higher prices than they previously took profits at ?

[fib_1618]

.Assuming that those in the "profits" liquidity pool sold stocks to those who now own stocks, where did those who now own stocks get their liquidity?  Further, as the market goes higher, will those in the "profits" liquidity pool be re-buying

stocks at higher prices than they previously took profits at ?

 

Yes, it's called rotation...money moving from those issues that are deemed "overvalued" to those that are "undervalued" (buy and sell programs and the like).

 

Also remember that although the FED here in the U.S. has been tightening for over a year, global monetary policies have been near zero in both Europe and Japan (among other countries) and this capital is also in play here as it seeks out areas from which it can grow, and equities currently give the most bang for the buck in this relationship. Traders chase and more and more "stimulus" as it enters the market, and like an avalanche rolling down a hill, momentum then takes over more and more which produces times of which some may call "irrational exuberance" which can include melt ups and crashes.

 

So, for now, long and strong has been the best position to be in since the end of August no matter what's happening either fundamentally nor on a geopolitical level as the liquidity pool is deep enough to absorb any and all bearish ambushes both deemed actual and those perceived as such.

 

Fib

[CLK]

Liquidity just got a dent put in it. A/D vs. NYA.