Toro's Running of the Bulls Market Blog
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Prescient Quote of the Day
“I think there are a lot of very rich people out there whom we can tax...”
- Barney Frank, Chairman of the House Financial Services Committee
- Barney Frank, Chairman of the House Financial Services Committee
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Protect Your Capital
As of the close Friday, the S&P 500 is down 39% from the highs set last October. If you held stocks at that time, you are down 39%.
To get back to that level, the market would have to rise 63%.
On any given trading day, how often has the stock market gone up 63% one year later?
There have been 20,291 trading days since December 30, 1927. On only 145 occasions did the S&P 500 rise 63% a year later, or 0.7% of the time.
And when was the last time the market rose 63% or more in one year?
October 18, 1935.
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September Hedge Fund Withdrawals, $43 Billion
From The Financial Times
Investors pulled at least $43bn from US hedge funds in September as market turmoil led to unprecedented withdrawals, an analysis by a leading research house shows.
The data from TrimTabs Investment Research – which was to be sent to clients late on Wednesday – come as hedge funds are working to prevent far bigger redemptions by the end of the year, when many funds give investors a chance to take out money.
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Semiconductor Update
I have traded the semiconductors over the years. It is one of my favourite groups since the swings can be so wide.
The SOX is down 57% from its high in this bull market. It is within 10% of the decade lows. It is 22% away from the 1998 low and 40% from the 1996 low.
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Hedge Fund Liquidation $400 Billion?
If so, the decline in stocks is not over.
From Free Exchange
JPMorgan Chase has estimated that hedge fund outflows could total up to
$150bn over the coming year. As investors take their money out of hedge
funds, the funds have to sell assets.
But because they use so much borrowed money, the amount of potential asset sales is far larger. For example, JPMorgan expects that an outflow of $150bn will lead to sales of about $400bn.
But because they use so much borrowed money, the amount of potential asset sales is far larger. For example, JPMorgan expects that an outflow of $150bn will lead to sales of about $400bn.
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Chinese Exports Fall 0.5%
This cannot be a good sign for the global economy.
[W]hen adjusted for inflation and the Chinese currency’s rise against
the dollar, Chinese exports actually fell 0.5 percent in August from a
year earlier, and are likely to be flat for September, for which
inflation data has not been released.
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Well, I @%^%^$)( Hope Not!
Let the 2 & 20 Masters of the Universe burn.
U.S. Treasury Secretary Henry Paulson said his plan to inject capital into financial companies
is focused on banks and thrifts, indicating unregulated firms
such as hedge funds won't initially get government aid.
I'm troubled by the word "initially."
How about "never."
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Market Action, October 15 2008 - Liquidation Continues
It is difficult to put a positive spin on today's market.
But I will try.
Volume on the NYSE Composite was 6.2 billion, the third lowest volume day of October and the lowest since October 2. A low volume re-test of the previous lows is positive.
As long as the lows hold.
The lows may not hold. What is amazing is that the market cannot solidify any gains.
The news that the government is going to take a stake in banks is good, at least for the market, or at least it should be.
The market does not care.
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Stopped Out
I was stopped out of my longs I put on a few days ago.
That probably means we are going higher.
Frankly, the market action has been very bothersome. Any time the market pops its head up, the sellers hit the offer.
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