Look at the last four rallies. On a percentage basis they ran up into
the low to middle teens before correcting.
This has been the rhythm of the rallies for the past few years.
The S&P 500 and Dow stalled several days ago… the small and
mid caps has seen some recent profit taking.
A replay of the spring of 2011?
An hour and a half into the market – the initial shock has
worn off – there is a little buying – oops, it’s being met by selling -
if the market doesn’t manage to come back today by more
than half of its fall, tomorrow could be another ugly day.
But I know that nobody cares about this stuff, so I apologize
for disturbing your sleep. Care on.
Comments
No sleeping at this house. Pretty smelly all around the globe, eh?
Although we don't have a high % exposure directly to equities; looking at the list again.
I have continued to watch and noted here that the Treasury areas have continued to stay in a tight and narrow range, in spite of the numbers being placed by many equity sectors.
Treasuries are showing this again today.
Thanks for stopping in and noting.
Take care,
Catch
for disturbing your sleep. Care on." lol.
The market has to drop a fair amount before everyone can demand QE3.
I did start leveling back into the SOIL etf a little and I was going to buy another round of BIP (Brookfield Infrastructure, actually up for the day), but now am waiting it out.
BND 83.79 +.26%
EEM 42.28 -3.62%
IYR 60.29 -1.05%
PEJ 20.50 -1.11%
GDX 51.85 -3.30%
HYG 89.79 -1.18%
EMB 112.77 -0.83%
TIP 118.40 +.47%
LQD 116.85 0.00%
IEF 105.38 +0.56%
• The “Correctionists” are having their day as today is the first day of de-risking day all year. Evidence of this (besides the obvious) materializes as:
o The hedge fund long index underperforming the market by 60 bps
o GLD/SLV getting hit hard
o High yield bonds under significant pressure with HYG down 1%
o Cyclical sectors in the S&P 500 underperforming
• Volumes today are strong, tied for third highest of the last 30 trading days, though still not as high as one would expect.
• Small caps underperforming and are equal to recent relative low. In fact, the Russell 2000 has underperformed the S&P by over 500 bps over the past month for only the third time since 2002!
• Many of the heaviest volume stocks relative to their average are in the material sector including FCX, BTU, CNX, etc as these stocks have come under sharp pressure into and including today. The high volume is notable.
• The tendency in environments like this is to want to buy the dip since we haven’t had one in months. Accordingly, shorts who have been waiting or people who are underinvested feel compelled to buy.
• The CBOE futures exchange said that, on March 5th, VIX Index open interest hit a record 282k contracts, vs prior record of 256.9k on March 1st. The VIX index was up as much as 17% to 21.1 earlier today.
Thank you.
This is the problem; whether to proceed with slight (25%) reductions in some holdings, based upon current actions, and especially the HY bond sector that is more in line today with declines of equities. Generally, from my watching over the past few years; the HY bond sector may decline only 1/3% for every 1% down in the broad equity area.
My biggest "twitch" today; is whether this Thursday and the Greece debt holders have an agreement or not; and whether this is already built into the markets. Or that it really won't matter. And will there be some late buying today and buying tomorrow from the equity bulls???
There appears to many talking heads/writers who are still more bullish on the equity sector. Obviously, our house has not been in agreement with this thought, or we would be more than 50% in equities. However, we will still take a hit today from our metals, materials, HY bonds and equity fund holdings; while getting some support from some bonds sectors. The stronger dollar is also going to whack FNMIX.
Picture me scratching my head.
Take care,
Catch
We'll see how this goes, eh? Never a fun time for this house to sell.
Remember that nothing in the investment world is forever, including interest rates, the current strength (or lack thereof) of the dollar, the obsession with the euro (and Greece - is this nuts or what?), the price of gold and silver, oil demand, and our shallow politicians.
There will always be times when John Mauldin and the other end-of-worlders will have their few minutes of credibility and the rest of us doubt our sanity, but it won't last. As another astute poster has said here many times, keep some powder dry and don't be afraid to buy when others become screaming mimi's.
Will the markets go up tomorrow? I don't have a clue, and neither does anyone else. If you worry when days like this occur, you should reduce your market exposure. Turn off the TV, and remember that every one of the so-called experts have a bias and therefore probably an agenda. My take is that the current conditions are neither as good as the left wants us to believe, nor as terrible as the right insists they are.
Instead of trying to time whether you are in or out, or whether to capture gains or not, keep your long-term goals/targets in mind, stick to your risk tolerance, and hang on. Own some alternative investments that should help reduce volatility, whether it be bullion, long-short, currency, arbitrage.
Be smart, be consistent, and stay the course. Those who did in 2007-08 and in the tough period of 2011 have done ok. Is it easy? Nope. But it's a lot easier than selling during a panic and missing out on the gains when things turn positive.
I am thinking cutting back in the private account, may 20s-25% cash. Looks like a big dip is coming soon
"Turn off the TV, and remember that every one of the so-called experts have a bias and therefore probably an agenda."
Well, yeah. They're cheerleaders, in the way a realtor is never going to tell you its a bad time to buy a house.
Otherwise, personally I've just become long-term out of the irritation and exhaustion of timing. Sticking with hard assets, including things like Brookfield Infrastructure (BIP), and continued allocation to emerging markets and alternatives (Marketfield, which I may add to.) May also start to buy back into energy MLPs again if SMF comes down further.
This pullback was expected (although took longer than expected to occur.) The Greek news today was an element, but I think the China growth expectations/numbers the other day were a big part of it (note the particularly negative performance in some materials and EM today.) I still think emerging markets are worth being overweight, and pullbacks should be viewed as opportunities. That said, I think there's a good deal of discussion on the EM consumer and refocusing some EM economies, and plays like ECON and BRAQ are among consumer plays.