# Mutual fund cash to asset ratio lowest ever in Dec 2016



## lonewolf :) (Sep 13, 2016)

Monthly

Ratio was @ 4.0% in 1973, 7 months before peak S&P then 48% drop

Ratio was @ 4.0% in Jan 2000 before 51% drop in S&P

Ratio was @ 3.5% exact month DJI peaked & 3 months prior to S&P topping then 58% drop in S&P

Ratio was @ 3.0% in Dec 2016


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## logical (Feb 3, 2017)

Is this the data for US based mutual fund? Or canada based?

Are they the only time Mutual funds' cash ratio was 4% or lower? Or these are 4 random data points picked from numerous times cash ratio went below 4%?


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## dubmac (Jan 9, 2011)

What is the significance of the ratio? Does it have something to do with anticipating a market drop?


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## lonewolf :) (Sep 13, 2016)

logical said:


> Is this the data for US based mutual fund? Or canada based?
> 
> Are they the only time Mutual funds' cash ratio was 4% or lower? Or these are 4 random data points picked from numerous times cash ratio went below 4%?


 chart goes back to start of 1960s these are the only times below 4% except last few years cash to assets levels have been below 4% with December setting a record. All the peaks in cash to asset levels strong rallies have occurred 1974 low, 1982 low & the lowest low in the decade of the 1990s. Chart can be found @ Elliott wave international was on one of their free videos


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## lonewolf :) (Sep 13, 2016)

dubmac said:


> What is the significance of the ratio? Does it have something to do with anticipating a market drop?


 It is a sentiment indicator & a good one as money is on the table. The market price pattern is fractal in nature depending on the size of the fractal that is causing the market to rally will be in direct proportion to how low the reading has to go before top is formed. Since this is the most extreme reading of the data going back to the 60s the move in the other direction should be larger then anything seen since the 60s.


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## dubmac (Jan 9, 2011)

lonewolf :) the move in the other direction should be larger then anything seen since the 60s.[/QUOTE said:


> if there was ever a time in the US like the 60's, I'm not convinced that it would be under Trump's term....:smile:


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## lonewolf :) (Sep 13, 2016)

Dubmac The S&P percentage drop should be larger then any of the drops seen in the last 55 yrs based on this indicator in the next bear market


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## james4beach (Nov 15, 2012)

It shows a very pervasive bullish mood. And with CAPE above 28, no less.

Does that mean the rally is over? Not necessarily.


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## dubmac (Jan 9, 2011)

lonewolf :) said:


> Dubmac The S&P percentage drop should be larger then any of the drops seen in the last 55 yrs based on this indicator in the next bear market


My response was meant more as light humor than anything else. 

I have been watching a few US Business news channels - the word "over-valued" keeps coming up. I'm not sure what will prompt a correction, but we'll see I guess.


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