Good chance Market near a short term high.

this rally is different from others the past years -- this is foreign money inflows, company stock buybacks, hedgies took some longs in October, and institutional liquidity piggy backing rally {ride those foreign inflows!} .

foreign money came in strong several days in october to beat everyone to the start of the November buying as did many companies with their own stock buy backs. ma and pa are not buying into this rally yet and the foreign money hops around like a frog in a pond. this rally is like a bunch of toothpicks balancing end to end vertically. :eek:

we also have another factor for this year in December --- what happened at the beginning of January this year {after the election rally up til the last days of December}? the last week or two of December this year may have some people pulling profits prior to any early January "rug pulling" maneuver {sell-off caught many off gaurd this past January}.

the other thing that has happened in the last couple of days is the amount of commercial shorts are building {big pit futures equities hedging and short trade position building} --- other then an unplanned news event, the institutions already know when they are going to rip this market the other way. plus the more the institutions and others add to their equities positions the more they need an increasing hedge {they have no clue how long the foreign money will stay}.

i am getting the feeling this is going to be a December very different then in the recent past --- the inflow groupings are of a different mix, with higher then usual and questioned {unknown} position longevity. i am sure the institutions and hedge funds do not have a measurable clue as to how long the foreign dollars will stay {lots of middle eastern countries monies here now also --- probably at record levels}.

if the foreign monies move out fast {for whatever reason --- if they do} then we will see the institutions and hedge funds dumping right along with them --- they have no choice because they can't replace that much liquidity.

if there has been enough "wink and nod" to the foreign monies from the commercials, then they will keep the rally going til years end and get their bonus checks --- the only problem with this situation is that the commercials will then need to "trust" that arrangement until years end. :D
 
Quote from GreenDog:

only a rookie would be short here (that doesn't mean you can't take a little off the table on the long side, though).
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Forgetaboutit, I'm short all kinds of dogs and I'm barking with glee
 
Quote from MacroEvent:

this rally is different from others the past years -- this is foreign money inflows, company stock buybacks, hedgies took some longs in October, and institutional liquidity piggy backing rally {ride those foreign inflows!} .

foreign money came in strong several days in october to beat everyone to the start of the November buying as did many companies with their own stock buy backs.
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Thanks for the post. How did you come by this info regarding foreign inflows?
 
i have a few contacts that i follow up with weekly and they are keeping me informed of the situation. interesting too, there have been several brokerage principals talking about this the last few months in the media {business channels} --- for instance i just saw Jack Bouroudjian {Brewer Investments} talking about this the other day. the U.S. Treasury Dept officially tracks all foreign inflows to U.S. securities {bonds/equities}, but the news is all after the fact.


what i know from my information is the foreign investors put another 25 billion into equities in September {5 year record high --- the most since just before our March 2000 market burst}, and then in October they yanked that out quick for the first part of the month and then started coming back in at the very end of the month. November again now they have poured in more monies for equities {may set a new record}. the main problem with foreign inflows to our markets is the longevity of those funds remaining here --- a large portion of these funds tend to move in and out fast, so it is hard to track or predict the "willingness" of these funds to remain invested in our equities markets.
 
It's interesting. Foreign inflows ramped up as the dollar declined over the last 3 years. But the decline has reversed, somewhat.

How can you know if the money is indeed of a foreign origin as opposed to an off shore hedge fund, which is funded principally by US dollars?

What would account for a quick in and out? (no pun intended)
 
Quote from dgabriel:

It's interesting. Foreign inflows ramped up as the dollar declined over the last 3 years. But the decline has reversed, somewhat.
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Just another correlation thrown out the window the last three months. Foreigners are MUCH more prevalent players in U.S. credit markets than in equities. Unlike a generation ago most every developed nation has a vibrant exchange traded stock market. Investment money stays home on the most part. You can see that in global p/e's. America doesn't trade at a premium anymore. So I do think those Macro Event numbers are off shore funds.

I posted this in another thread Tuesday:

"Tons of funds shorted the October selloff. Many investors took profits in the aftermath of Katrina/Rita/Wilma and $70 oil. A few more sold deep OTM calls that blew up into deep ITM calls. All of that short covering equals a LOT of buying pressure into these thin markets. Not to mention 1245 in SPX was not some random high. Any of you guys who use measured moves with a bit of creativity know what I'm saying about that level.

The longs correctly guessed that the shorts were hung and haven't been interested in supplying much stock to let those guys out. Last I heard this is an auction market, eh?"

That covering could be over. However DG while I think the market may come off a bit I don't see anything dramatic. EVERYONE I talk to is under invested and needs to buy a pullback.
 
well in the new world of measuring who's money is where and when, the government through regulations over brokerages and institutions have this down to a science --- they have their eyes on the movements of money all the time.

foreign money has become almost like you and me but on a much bigger scale --- much of the foreign monies are "daytraded" in a sense. the money seems to be shifting from one market to the next on any whim to catch the next move or to gain value {look at the nikkei 225 right now ---- they are getting foreign dollars too}. when the U.S. markets sold off in october then our market became the best "value" at the time and so we have had a big rush of inflows. the only problem though is that these monies have zero "loyalty" to the market they are in ---- more like a "player" out looking to score the next hot chick.

March of 2000 is a perfect example of a massive foreign "dropping" of our market for some other area of value ---- who knows what spooked them {clinton's justice department going after MSFT or maybe the 50 basis point Fed rate hike --- who knows?}. knowing this we have to then be aware of how fast these monies can leave our market {like early october of this year} and then how fast they could come right back {end of october of this year --- realization that the EU and Nikkei markets may be overbought, so where was the best value after our october sell-off --- yes right back here in our markets}.

this is a lot of money we are talking about, and the shifting of these amounts of liquidity {with the speed they can move these funds} are hard to instantly replace for a market to hold current values. i just see added volatility in all the worlds market going forward as this affect remains active {and this does not even cover what is happening with the bond markets}.
 
Really good thoughts....
Quote from MacroEvent:

well in the new world of measuring who's money is where and when, the government through regulations over brokerages and institutions have this down to a science --- they have their eyes on the movements of money all the time.

foreign money has become almost like you and me but on a much bigger scale --- much of the foreign monies are "daytraded" in a sense. the money seems to be shifting from one market to the next on any whim to catch the next move or to gain value {look at the nikkei 225 right now ---- they are getting foreign dollars too}. when the U.S. markets sold off in october then our market became the best "value" at the time and so we have had a big rush of inflows. the only problem though is that these monies have zero "loyalty" to the market they are in ---- more like a "player" out looking to score the next hot chick.

March of 2000 is a perfect example of a massive foreign "dropping" of our market for some other area of value ---- who knows what spooked them {clinton's justice department going after MSFT or maybe the 50 basis point Fed rate hike --- who knows?}. knowing this we have to then be aware of how fast these monies can leave our market {like early october of this year} and then how fast they could come right back {end of october of this year --- realization that the EU and Nikkei markets may be overbought, so where was the best value after our october sell-off --- yes right back here in our markets}.

this is a lot of money we are talking about, and the shifting of these amounts of liquidity {with the speed they can move these funds} are hard to instantly replace for a market to hold current values. i just see added volatility in all the worlds market going forward as this effect remains active {and this does not even cover what is happening with the bond markets}.
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another point i have forgot to mention in all this --- about the EU markets. the EU {and their markets} has big problems ahead imo if their dealings with people of middle eastern descent degrades {the middle eastern people living within their countries} or becomes a pronounced internal political debate --- hey guys who's buying your markets up, thats right middle eastern "petro wealth" monies. there is no way the EU markets {with their current economies} would be where they are now without all this added liquidity.


what is that saying? "If you are walking on eggs - don't hop" :eek:



oh good --- the turkey and fixin's are reheated and ready for round two --- oh and i will be real bad and have another piece of pumpkin pie! :D
 
anecdotal evidence from my wife's recent out-of-work experience with a MASTER'S DEGREE...in... get this: HEALTH CARE LAW coupled with a nursing degree saws one thing: THIS USA ECONOMY SUCKS MAXIMUS. There is absolutely ZERO leverage for higher wages for white collar, non-union, non-govt workers. 30k reduction from GM, 10k reduction from Ford, 40k reduction from HPQ ? HAAALLLOOO...."knowledge (bullshit) workers" are a DIME-A-DOZEN right now. Construction workers, masonry workers ARE KICKING BUTT WAGE-WISE.
Note: She did finally receive an offer after 10 weeks of "looking"....but it wasn't a great one...VERY DISAPPOINTING relative to the COST AND EFFORT of abtaining an ADVANCED DEGREE.
Anyone going after an advanced degree in ANYTHING right now for purposes of WAGE ENHANCEMENT should have their HEAD EXAMINED.
Strategically, longer term, I would be short APOL, CECO, COCO, and anything related to this advanced-degree-is-better theme B.S.
 
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