Chart Shows Dumb Money Sold in May While Smart Money Bought

Pinnacle Digest writes: Gary Tanashian wrote a compelling piece on the likelihood of a market rally in the second half of 2012. In his article, Gary breaks down the money flow index. He includes a telling chart of the ‘Dumb Money’ mass exodus from the market this May. Gary provides a chart of the ‘Smart Money Confidence’ rising rapidly at precisely the same moment ‘Dumb Money’ exited the market.

What’s important to note about the market right now is that the last time sentiment was in such a compelling bullish structure, it was towards the end of last summer’s euro crisis. We all remember ‘euro crisis part II’ in 2011 right? And we all know what happened after September’s bottom (a massive rally).

Gary points to the fact that policy makers have succeeded in making the general public believe inflation is under control (with gold, oil, copper and basically all commodities collapsing of late). This will allow Bernanke to flex his inflation muscles once again. And as we’ve stated several times in 2012, it is an election year and it’s now or never for Obama. QE is coming.

Find out every reason why Gary Tanashian of biiwii.com believes we are due for a market rally in the second half of the year. Click here to read his article and see the contrasting confidence between smart and dumb money.