Don’t Be The Dumb Money
One type of indicator in the stock market is known as the “contrarian signal”. This is a market indicator which indicates the opposite of what one might intuitively conclude from the signal itself.
One such stock market indicator is the “dumb money confidence index”. For better or for worse, it is generally regarded that institutional and hedge fund investors are smarter than individual retail investors.
Consequently, individual retail investors are known as “dumb money”. The theory behind confidence indicators is that if everyone is bullish and/or confident, then all of the people who could be buying securities in the stock market are already in the market. That suggests that the market is closer to a top.
The reverse is also true. If everyone is bearish and/or not confident, then all of the people who could be selling securities in the stock market have already sold out of the market. That suggests that the market is closer to a bottom.
The chart below is a contrarian indicator.
Bitcoin an ‘Unstoppable Force,’ US Congressman Tells Crypto Hearing
Bitcoin’s (BTC) plight in Congress has seen attention focus mainly on naysayers, but this week’s hearing also saw United Statespoliticians accept it was always beyond their control. ‘Governments cannot stop this innovation’
During testimony on July 17, U.S. Congressman Patrick McHenry, who represents North Carolina’s 10th District, told lawmakers directly that attempts to stop Bitcoin were futile. “The world that Satoshi Nakamoto, author of the Bitcoin whitepaper envisioned, and others are building, is an unstoppable force,” he said.
McHenry runs in sharp contrast to other Congressmen making the headlines over Bitcoin, with Brad Sherman again gaining the spotlight after making dubious claimsabout cryptocurrency’s role in crime. Others broadly failed to draw a distinction between Bitcoin and permissioned digital currencies.