Quote from RichardRimes:
Very interesting post MO...that was exactly my thought that the SPX would just muck about for the next couple of months based on the recent poor showings of the GDP and ISM as well as a loss of confidence in current US leadership. However I've been thinking a lot about "dumb" money and honestly most of the people I know who have money to invest and don't follow the markets closely put their money to work in mutual funds or with money managers and don't even try to follow the markets or chase stocks....so who really is the "dumb" money?
edit...AND YOU have WAAYYYY too much time on your hands 
RR,
When speaking of "dumb money" there are a few big sources that I am familiar with from advising.
Individual investors actively reallocate their money across different mutual funds. These days there are a ton of people who somewhat actively manage their own portfolio due to recent efforts of firms like Chuck Schwab. Some manage a personal IRA while others do it through a 401K, and some just have a cash account with a broker like CS, Scottrade, or Ameritrade.
Anyway, these people are notorious for jumping on the end of a trend. A bunch of people pulled their 401K out of stocks last June during that bear trap. They just move their money into a money market fund or other ultraconservative investment. By the time SEP came around they were already mad that they didn't hold on, but the market must be hitting a top again. Right? Then by mid OCT they are sick of hearing how much money their neighbor is making in stocks and how we are in "blue sky" territory and the economy is in great shape. Finally they access their 401K or IRA and move their monay back into stocks.
Generally speaking, mutual funds try to keep a certain amount in cash to handle withdrawls. Recently however, mutual fund managers have had very low levels of cash, meaning that they are over committed by industry standards. They also get pressure to make money during these rallies, but they are pretty quick to sell off losing positions right now because it is the end of the year and they need to get back to their 5-7% cash basis. So the money flowing in from individuals hasn't been maintaining proper allocation.
A couple things to notice are the flow of money out of gold and silver in SEP, as well as the flow of money out of bonds during OCT. These are safe havens in times of uncertainty, and both have picked up recently.
{edit} I'm with Mo in that I'm not sure that I'm not dumb money also.
