Down goes the Dow

Yes...even with all these wild swings the VIX ("fear index") has stayed in the 20's which shows not much fear...it hit almost 60 at the 2009 low. Interesting to note that the VIX is pretty much the same number as it was at the beginning of the year when the DOW was 1,500 points higher.

Ghost of Igloi wrote:

Today from Doubleline's Jeffrey Gundlach:

"The reason the markets aren't going lower is people are holding and hoping," Gundlach said in a telephone interview with Reuters. "The market bottoms out when people are selling and sold out — not when they are holding and hoping. I don't think you've seen real selling in risk assets broadly. Markets need buying to go up and they need volume to go up. They can fall just on gravity."

Mr. Vix,

It was interesting that biotech was one of the big winners today. I suspect institutional traders were riding momentum of their own buy orders. I think it is a wrong assumption that we move higher from here.

Igy

" Interesting to note that the VIX is pretty much the same number as it was at the beginning of the year when the DOW was 1,500 points higher."

For what exact reason is it interesting?

********************

Huge intraday swing today, a trader in my building did well on sbs. He has done that on a few other days this year as well.

Ghost of Igloi wrote:

Today from Doubleline's Jeffrey Gundlach:

"The reason the markets aren't going lower is people are holding and hoping," Gundlach said in a telephone interview with Reuters. "The market bottoms out when people are selling and sold out — not when they are holding and hoping. I don't think you've seen real selling in risk assets broadly. Markets need buying to go up and they need volume to go up. They can fall just on gravity."

Wow, I am surprised at the lack of negativity regarding the market in this post. Are we witnessing the moderation of Igy?

POTO,

Gundlach "people are holding and hoping." You hope, like many other investors, and hope is not an investment strategy. Here is the full article. We will reach our 13,000 Dow bet. The trading in the market gets more bizarre every day.

http://www.cnbc.com/2015/10/02/doublelines-gundlach-expect-another-wave-down.html

Igy

POTO,

Also see my post of 2:52 pm, far from moderation.

Igy

POTO,

Even the Atlanta Fed can see what you ignore:

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

Igy

I'm not ignoring anything. How is reading what you post interpreted as ignoring?

You posted a quote suggesting the market won't bottom out. It's a little early for you to be waving the white flag on our bet, but I'm happy that you've come around a bit.

POTO,

No white flag yet but I will fall on the sword if I am wrong.

On a serious note I am concerned about the economy and market valuations. The global economy appears to be tetering on the brink of recession. If my concerns are misplaced we will all be in a better place.

Have a good weekend.

Igy

Given your record here, I was hoping you'd say something like that. I feel a lot better now.

This week saw positive data on US consumer spending. However, US employment improved less than expected. US manufacturing activity appeared a little weaker, but still grew. In the Eurozone, low inflation prompted the prospect of further monetary stimulus for the region. We also saw the end of the third quarter of the year, which marked the worst quarter for global financial markets since 2011, as concerns over Chinese growth and global commodity pricing weighed on markets. While many investors have not been pleased with the direction markets have headed in recent months, you should always keep in mind that such pullbacks and volatility are actually quite a common component of financial markets and a normal part of investing. Furthermore, recent weeks have seen lower volatility.

This week we want to discuss the bonds (aka fixed income) that you may have in your portfolio. Fixed income, just like equities, is a diverse asset class. Factors such as how long until a bond is expected to be repaid, and the credit quality of the entity issuing the bond can cause different bonds to respond in diverse ways to market events. For example, a short-term government bond can be a very stable investment in most scenarios. On the other hand, high yield bonds can, at times, appear to trade more like a stock than a traditional bond. It is also worth noting that, contrary to popular belief, bonds have generally offered positive returns during periods of tightening monetary policy according to the recent book Invest With The Fed: Maximizing Portfolio Performance by Following Federal Reserve Policy, by Robert R. Johnson.

At FutureAdvisor we typically implement or recommend portfolios that include fixed income investments that are generally high credit quality, internationally diversified, and of moderate duration. These properties mean that the fixed income element of our portfolio helps to offer stability during times of equity market weakness, which is one of the many reasons why we believe bonds can help smooth portfolio returns over time. As you would expect, we generally use fixed income ETFs that can contain thousands of different bonds. We also diversify fixed income instruments by including foreign bonds. At a time when the US may be close to raising rates, many countries internationally are moving in the other direction. Finally, we also include or recommend Treasury Inflation Protected Securities (TIPS) as part of fixed income exposure, like the real estate component of your portfolio, we expect to help offer stability - especially when inflation rises.

lads, I hope you are all well.

It's been 41 days since the August 25th lows

The US market is still around 8.9% below its 52 week highs

Over 52 weeks the US is up around 2%

over 5 years, around 13% per year

agip wrote:

lads, I hope you are all well.

It's been 41 days since the August 25th lows

The US market is still around 8.9% below its 52 week highs

Over 52 weeks the US is up around 2%

over 5 years, around 13% per year

The sky is falling! The sky is falling!

WW3 has started, and global capital is rushing into US markets. 'Murica, baby!!!

Casper Says wrote:

agip wrote:

lads, I hope you are all well.

It's been 41 days since the August 25th lows

The US market is still around 8.9% below its 52 week highs

Over 52 weeks the US is up around 2%

over 5 years, around 13% per year

The sky is falling! The sky is falling!

here's a good one:

Bill Gross, manager of billions (mostly bonds to be sure)

in late 2011 said that between 2011 and 2016, 5% returns from stocks or bonds would be the 'upper echelon'

how's that going?

grossfail

since he said that 3.84 years ago the US stock market has risen 9.67% per year.

to be fair, we will have 1.16 years to go on his prediction.

Now this is a long thread.

agip,

Bill's been right so far this year and my bet is the trend will continue. Gross probably underestimated the length central banks would go to inflate the equity markets. That can only go on for so long.

Igy

Ghost of Igloi wrote:

agip,

Bill's been right so far this year and my bet is the trend will continue. Gross probably underestimated the length central banks would go to inflate the equity markets. That can only go on for so long.

Igy

well that's the thing, isn't it?

predictions go wrong because the forecaster misses something - he doesn't see something coming down the pike. Whoops.

It's not like gross has been right - he's been dead wrong, because the market has risen strongly when he said it wouldn't. He didn't understand the dynamics of the market.

Really what I am saying here is that it drives me a little nuts when a forecast is wrong but he defends it by saying 'but he was actually right - who would have thought that....' well it doesn't matter - he was wrong.

small caps up 5.5% in 4 trading days - that is panic among the shorts

god I'm glad I'm not a hedgie - that is a berry berry difficult job. being expected to make money good times and bad.