Is the Market Rigging Story Bullish for Stocks?

As we head into the last day of the quarter, many are hoping that the second quarter will offer clearer trends in the major averages. The price action in the major averages last week was pretty symbolic as the S&P 500 was down 0.5%, the Dow Industrials were up 0.1%, and the Nasdaq Composite lost 2.8%.

After a stellar market performance in 2013, it has only taken three months for investors to start souring on equities. Of course, an increase in bearish sentiment is a positive factor when the major trend for stocks is positiv

Individual investors have become less bullish as according to AAII, the bullish % has dropped to 31.16% from over 41% two weeks ago. Most of the bulls moved to the correction camp as the number of bears is up to 28.61% from 26.82% just two weeks ago.

Last night’s 60 Minutes story “Is the US stock market rigged” is likely to scare even more individual investors away from buying stocks. This, I think, is a mistake as the individual investor, who uses limit orders, should see little impact from high-speed trading. Large institutions or short-term traders who trade ahead of or just after important economic reports might see a slight disadvantage.

The effect of this story is likely to give the average investors another reason not to buy stocks. This will likely keep the public ownership of stocks at record low levels until prices are much higher. Just remember what the general press has told the public about the stock market at most of the panic lows since the bull market began in 2009.

As the skepticism over the stock market has risen, another measure of the stock market’s health has improved, let’s take a look.

by Amazon Auto Links
Is the Market Rigging Story Bullish for Stocks?

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