# Markets are rallying. Where is the money coming from?



## MrsPartridge (May 15, 2016)

The stock market is soaring but where are people getting this money? Are they exiting other positions? Were they sitting on a lot of cash? Such a surge but doesn't something have to go down?


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## Spudd (Oct 11, 2011)

Bonds are going down.


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## mordko (Jan 23, 2016)

Cash reserves have gone down too. And gold. And defensive/low volatility stocks. And EM. And tech. It's a risk on mode for US stocks in the financial and a couple of other sectors.


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## Oldroe (Sep 18, 2009)

Trump is the big business .


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## madmoney (Jan 17, 2015)

http://www.reuters.com/article/us-usa-banks-conference-blackrock-idUSKCN11J1ZX
http://www.businessinsider.com/50-t...delines-good-news-for-stocks-and-gold-2016-11

Interesting the amount of money sitting on the sidelines waiting for an opportunity could be the very reason the markets aren't dropping.


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## mordko (Jan 23, 2016)

$10 trillion in cash in the US... That's about half of US market cap. Seems like a lot, but it's only ~$30K per person which isn't all that much.


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## james4beach (Nov 15, 2012)

Money is rotating out of bonds and foreign investments, and into US stocks. As mordko says money is definitely coming out of emerging markets and other defensive plays.

Indeed it looks like "risk on" for the moment, with a heavy US bias

You never know how long such phases last, impossible to forecast. That's why the best thing is to figure out your investment strategy and allocations, and stick with the plan.


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## lonewolf :) (Sep 13, 2016)

MrsPartridge said:


> The stock market is soaring but where are people getting this money? Are they exiting other positions? Were they sitting on a lot of cash? Such a surge but doesn't something have to go down?


 US Mutual fund cash levels recently were @ record lows. NYSE margin debt was 7% below its all time high in Oct 2016. Another market does not have to go down for the stock market to rally. All it takes for the market to rally higher is one higher bid then the last to go through. When market drops all it takes is one trade to go through @ a lower price to drop the market with no other trades to bid it higher. One single share traded @ a higher price with no one willing to sell lower will bid market higher. A lot of money does not have to come into market to bid market higher.


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## new dog (Jun 21, 2016)

This is why the plunge protection team is so successful, lonewolf.


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## CPA Candidate (Dec 15, 2013)

The "smart money" that sold out at January lows in anticipation of the next great recession and chased bonds up to extreme levels now wants back into equities at the highs. It would be funny if it wasn't so sad.

Mr. Market is a terrible forecaster, but he never gives up trying. My general inclination is to do the opposite of what the herd does and I am reducing my exposure to equities.

If the last president could have done something to stoke high growth, he would have. Trump is no magic bullet. How can he cut taxes when the US deficit and debt is so high? Remember, congress is full of fiscal conservatives.

Mr.Market is going to be disappointed again and when that happens the chance to increase exposure to equities will be at hand.


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## new dog (Jun 21, 2016)

If bonds keep dropping, I am looking here and I think after the rate hike or not in Dec. they will probably rally into the new year.


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## janus10 (Nov 7, 2013)

On the first day of Christmas, my true love gave to me, a MrsPartridge in a pair trade. :cheerful:


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## humble_pie (Jun 7, 2009)

^^

on the 2nd day of christmas my true love sent to me, 2 Trumpy doves


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## Pluto (Sep 12, 2013)

on the third day of Christmas my true love sent to me
3 French hedges
2 Trumpy doves
and a MrsPartridge in a pair trade.


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## humble_pie (Jun 7, 2009)

i skipped a verse so as to be able to include the 4 sisters in lingerie
sorry


on the fifth day of christmas my true love sent to me
five french nuns
4 in tempting thongs
3 topless in a hedge
2 trumpy doves
and a missus Partridge in a pair trade

.


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## olivaw (Nov 21, 2010)

On the sixth day of Christmas my true love sent to me
6 Humbles humming


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## lonewolf :) (Sep 13, 2016)

Negative interest rates in Europe, Pension funds need a return to survive, war on cash, Europe falling apart, confidence shifting from government bonds to private sector. Real estate in Canada dropping, the rich of the world need to park their money somewhere the US stock market. Phase transition maybe then crash & burn


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