7-figure accounts surge along with mo-mo market

Seven-figure surge

Retail traders are becoming manic about trading stocks. The constant drumbeat of new highs combined with zero commissions has proved to be irresistible, and a record number of them have account balances worthy of bragging rights.

According to Fidelity, there has been a surge in the number of accounts worth more than a $1 million.

Fidelity millionaire 401k retirement accounts

The rate of growth over the past year is among the most impressive we've ever seen. The only time that can compare is in 2009, but that was coming off a very low base following the financial crisis. This is more indicative of a runaway market than a recovering one.

Bollinger Bands and momentum

As Seth Golden noted, the S&P has gone many days without a -5% pullback and is currently more than 2 standard deviations above its 200 day average.

When the S&P went 117 days without a -5% drawdown from 1 year highs while it was more than 2 standard deviations above its 200 dma, the S&P's forward returns on nearly every time frame were more bullish than random.

This is the main contradiction right now in stocks - things are stretched to a degree that usually precedes flat or negative returns over the short- to medium-term, but when it gets so stretched, it has an even stronger tendency to lead to higher returns longer-term.

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.

We also looked at:

  • 2020 has had one of the best-ever first 30 days - we look at what happened after the others
  • The ratio of the Nasdaq to S&P 500 is one of the most overbought in history
  • Stocks have rallied 15 of the past 19 weeks
  • Tech stocks have levitated above their 50- and 200-day averages for months on end
  • What happens after the euro suffers almost 9 straight days of declines

The post titled 7-figure accounts surge along with mo-mo market was originally published as on SentimenTrader.com on 2020-02-14.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.

Follow us on Twitter for up to the minute analysis of market action.

Not ready to signup up for a free trial yet?

Signup for our Daily Lite email to receive highlights of our daily report, research and studies.

Follow us on Twitter:

Subscribe to our Youtube Channel:

RSS Feed

Subscribe to the Blog RSS feed