Australian (ASX) Stock Market Forum

Money flowing into the market

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I have been reading media articles recently about how money has been flowing into the stock market lately. Given that someone needs to be on the other side of this trade (ie. seller), equal money has to flow out so that the end result is the net flow has to be zero, right? Am I missing something here? I hope someone can explain this to me.
 
At the individual trade there is a seller and buyer so the overall transaction is 0. That is not taking note of the price the seller had previously paid. For prices to be going up then it takes more money to be going in.
 
"The Australian dollar has opened higher, as a fresh bout of US dollar weakness and firmer commodities prices pushed the local currency towards $US1.05". 'As the Dollar rises, you would expect the share market to take interest. etc
And Vice Versa...........Supply & Demand..........? I really don't believe there is equal money business. After all the world is round right!.......
 
"The Australian dollar has opened higher, as a fresh bout of US dollar weakness and firmer commodities prices pushed the local currency towards $US1.05". 'As the Dollar rises, you would expect the share market to take interest. etc
And Vice Versa...........Supply & Demand..........? I really don't believe there is equal money business. After all the world is round right!.......

The USD is very close to a key level. Not only does this provide a great trading opportunity, but it will obviously impact the other currencies as well as metals and commodities.

For those interested, you can see that price has been clearly rejected at the 82.25 ish level a few times. Now we appear to be rolling over so if we don't find initiative buyers this time then the DX could be in for a substantial decline. Something to keep an eye on.

CanOz
 

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I have been reading media articles recently about how money has been flowing into the stock market lately. Given that someone needs to be on the other side of this trade (ie. seller), equal money has to flow out so that the end result is the net flow has to be zero, right? Am I missing something here? I hope someone can explain this to me.

danb, there is a constant nett stream of money coming into the market and this shouldn't be confused with the value of the market which can obviously fluctuate or the internal movement of the same money from one investor to the other. Also there needs to be, and is, a great deal of churn between different types of product.

For example, say a bank issues some fixed or variable interest bonds. Money enters the market to buy the bonds. Interest rates change, the bonds are sold or mature and the share market is buoyant so the money may then go into shares. That shareholder receives a dividend and dividends are re-invested - more money into the market. The company then has a capital raising - more money into the market. Then there are the IPOs - more money into the market.

As you can see there are numerous ways that new money is introduced into the market. The fact that there is an ever increasing amount of superfund money finding a home shows that the new products or places for money are being constantly created.

Cheers
Country Lad
 
I was predicting a fall in overall market value, in May.

I'm not so sure now.

The Chinese engagement with Australia is beginning. If there is a present dip it may be a buying opportunity.

Good trading in April/May to all, but the money needs to flow in to the stocks outside of the Top 20 by value, to be sustainable.

gg
 
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