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(9/3/16)
The % of Mutual Fund Cash held by Mutual Funds has dropped back
to historic lows for the 3rd time in the last 12 months.
 If we look at the
action in the S&P 500 when the % of Mutual Fund Cash has dropped to the 3.3%
level or below in 4 out of 5 events there was a decent correction. The
last event was in late January (point A) which was followed by a 7% correction
in the S&P 500. 
Another event
occurred in late July of 2015 (point A) which was followed by a 12% correction
in the S&P 500. 
Meanwhile the only
case were the % of Mutual Fund Cash dropped to 3.3% and a correction didn't
occur was in late January of 2013. In this case the S&P 500 continued
to move steadily higher although there was a brief pullback in late February
(points B to C). 
Finally the last two
events occurred in late April of 2012 and late August of 2011. The April
2012 event (point A) was followed by a 10% correction. 
Meanwhile the event
in late August of 2011 (point A) was followed by a 13% correction. So in 4
out of the 5 cases there was a correction ranging from 7% to 13% in the S&P
500. Thus it will be interesting to see how the market acts in the
Fall. 
Amateur Investors
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