Buyers & Sellers Are Not Monolithic Blocks

 

This week was the one year anniversary of the March 23, 2020 market lows.

These sorts of things always lead to a media spasm of coverage, followed by my annoyance of the same. I am working on a piece that pushes back on some of the hot takes that were filled with usual lack of context  and foolish street myths.

One thing especially worth noticing is the tendency to treat buyers and sellers as a monolithic blocks.

They are not.

I am only spitballing here, but based on my experiences and some decidedly anecdotal information, different kinds of buyers and sellers come out at different times. I think it might look like some variation  of the chart above.

More on this next week . . .

 

Buyers & Sellers
Trend/Momentum traders           On sustained moves higher
401(k)s
Panicked Hedge Funds
Contrarians
Target Date Funds
The Very Lucky                               Lows
Structural Money*
Value Investors
Trend/Momentum traders            On sustained moves lower
GARP Buyers
Passive Indexers, DCA
401(k)s
Technical traders                             New breakout highs
Active Stock Pickers
Meme Speculators ?
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* Sovereign Wealth Funds, Market Makers, Prop Desks, Endowments & Foundations.

 

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