Buzz Bits: Dow, Nasdaq Dip Down
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Gonna Leave This Brokedown Palace - Todd Harrison - 3:33 PM
The Asset Class Pupil - Lance Lewis - 12:32 PM
Over the past four years, all asset classes have tended to move together, as "liquidity" (better known as "inflation"). Generally, the selloffs in commodities were even more violent than those in equities simply as a function of the fact that commodities had rallied so much prior to the selloffs.
This most recent break in financial assets, however, is somewhat different, as commodities (as a whole) have barely even moved. The equal-weighted CRB (in red in the charts here and here) is down just over a percent from its recent all-time high, whereas the SPX is down over 4%. Something is "different" here. I'm not sure what it is, but rather than a general liquidity problem, which one would think would be hitting all asset classes across the board (especially commodities where we have seen so much "financial demand"), we're only seeing a liquidity crisis of sorts in financial assets, mortgage-backs, equities, etc).
Could this be an important inflection point as we draw closer to the day that the Fed is forced to ease in order to cushion the housing bust, and the result is a lower dollar and accelerating inflation? I'm not sure, but I am watching with interest. Perhaps I will regret it next week, but I've also been buying the dip.
Position in gold shares
Randoms... - Fil Zucchi - 11:57 AM
- I have let "Stumpy" out of the closet and gotten a bit more aggressive with silver (YIK07) as it broke through $13. What I tend to do in these rapid fall scenarios is to buy two contracts to flip one, and keep the other for a longer term position.
- In equity land, I am covering some of my StreetTracker (GLD) short which I use as a hedge for my long stocks.
- The Palm (PALM) trade is pretty much over for me. Playing the takeover game in this one is not what I am interested in.
- The longer the markets bounce around these levels, the more this may be a consolidation before another leg down.
- Since Feb. 15, there is a 0.86 correlation between a falling dollar vs. yen, and the falling SP 500 (SPX). It may only matter for the here and now, but it sure seems to matter for the here and now.
- If Akamai (AKAM) could make it down to the 200 DMA, I think we could make a "deal."
Posiiton in AKAM, SPX, PALM, GLD, YIK07
Third Time's a Charm? - Rod David - 8:59 AM
S&Ps converted an overnight gain of 6 points into an 11-point loss. This is getting ugly - not just because several sell signals have triggered in the past five hours, and not just because the last two signals quickly dropped 7-8 points each.
Actually, it is those things, and more, but all viewed through the extraordinary lens of this not being triggered by new news (St. Louis Fed Pres' comments notwithstanding). The only thing "new" is that two days of illiquidity are just hours away.
The market might still make a stand here. With Fridays, it either happens early or it doesn't happen at all. And in this pattern, if it happens today, then it only gets worse Monday.
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