Toro's Running of the Bulls Market Blog

Greece Gets Bailed Out. Who is Next?

First, right up front, full disclosure - I am long the US dollar, so I'm talking my book.

A deal has been struck between Greece and the EU.  Greece may receive a loan of €30 billion, paying ~5% interest.  Merkel must be pretty confident of upcoming regional elections.

China's Currency Peg and Bubbles

The global economy is characterized by enormous imbalances, particularly the $2 trillion or so in reserves parked at the People’s Bank of China.  This build-up of reserves is one culprit of the asset-driven economy.

Options Sentiment at Extremes

First, let me congratulate the algobots, hedge funds and prop desks – who are all trading with each other and pushing the market higher and higher – for cracking the 4 billion volume share mark.  It was touch and go, but we were able to get over the hump on the last few ticks of the day, otherwise it would have been three days in a row of NYSE Composite volume printing sub 4 billion shares.  In fact, the past three

Melt-Up on Lightest Volume Day of the Year

As the machines did their usual thing and threw money into stocks, they did so on the lightest volume day of the year.  A grand total of 3.78 billion shares on the NYSE Composite hit the tape today, which does not say a lot following the much anticipated jobs report on Friday.  Allegedly, this light volume was because market participants were awaiting the super-secret meeting of the FOMC, who are deciding whether or not to hike the discount rate another 25 bps.

Cluelessness at the Very Top of Government

From Michael Burry, who ran Scion Capital and successfully foresaw the collapse of the housing bubble, in  The New York Times.

Stocks are Expensive

I look at a variety of stock market valuation methodologies.  Below are several, but I look at many others as well to get a sense of valuation.  Of course, valuation means absolutely nothing in the near-term.  It is, however, the single biggest determinant of long-term returns in the stock market. 

Assuming, of course, we do not go the way of Argentina.

Banks Feast, Seniors Starve

One of the many negative ramifications of the Fed’s grossly incompetent monetary policy over the past few decades has been to reward speculators and punish savers.  Charles Schwab makes this point, only in a much nicer way, in today’s Wall Street Journal.

Book Log Update

It has been awhile since I recommended any good investment books.  I have been reading but have not kept up with my purchases.  On Amazon, I am like a hungry man shopping at a grocery store, buying more than I will ever consume. Now, I have several stacks of unread books piled high on my floor since I have run out room on my bookshelf.

Of the several books that I have read since my last review, I would add these six to my recommended list.

NonFarm Payrolls Suggest Higher Market

There are two reasons why the market is screaming higher – enormous liquidity and an improving economy.

An ocean of liquidity has flooded the markets, thanks primarily to the Federal Reserve and government programs.  One can either surf the ocean (by going long) or drown in it (by going short).  The tricky part is getting safely to shore on the surfboard when the tide goes out. 

After the Melt-Up, the Next Move is ... Higher?

If the month were to end today, the Russell 2000 would be up 9.8% in March.This would be the 11th strongest month since 1980, in the 97th percentile of monthly performance.

The question is, what now?