Today's Selloff (No Drama Necessary)
- Thread starter MKTrader
- Start date
yeah i agree with you. but you dont think the market put high bar on this g20 this weekend? this market always expects governments to come up with some program to help the markets
there where key moments this market ran up in antisipation this week.. i think everyone was keying on this event all week.
hey it may of just happened at the same moment by chance, but the second those comments came out the market dumped 300 points.
Good one!
This reminds me of a running joke my Speech / Comm roommate and I had during college to see who could come up with the most negatives in a sentence. We started with the foundational, "I don't know nothing nohow", and worked our way up from there.
The phrases quickly went down hill. After a few iterations we would always stop for fear of someone thinking we were serious. Nothing makes a person look more stupid than throwing in a series of negatives in any given sentence.
I wouldn't read too much into the "HF redemption" hype. Prime Brokerages already now report record cash levels held by their clients (hedge funds) and record low net long exposures.
If a fund is long 100% on their long book and 80% on their short book that gives them a 180% gross leverage and a 20% net long exposure.
If they get redemptions worth $1bln they won't have to sell a net $1.8bln of stock but rather sell a net of $200mln (100% long - 80% short) as they sell long and buy back shorts at the same time.
If a fund is long 100% on their long book and 80% on their short book that gives them a 180% gross leverage and a 20% net long exposure.
If they get redemptions worth $1bln they won't have to sell a net $1.8bln of stock but rather sell a net of $200mln (100% long - 80% short) as they sell long and buy back shorts at the same time.
I was watching the action the whole time on Friday had a bunch of stuff up I was watching, but the most interesting was the ES quotes vs the S&P cash index. Pretty obvious they were trying to use the futures to push up the index and were running into some trouble (the price differential they trade at shrank to almost nothing), the trending traders (I guess most are bots) do this and most of the time a fire gets lit under the cash index (so, the stocks themselves). The fire didn't get lit, the cash index refused to be pushed up further, so the trending players had to bail.
It was mostly just these super-short term players not being able to push up the index anymore and having to bail out of the effort, IMO. It means a lack of buyers in the underlying stocks on a longer timeframe, which since the weekend was coming up would mean a couple of days. I'm not sure that means much beyond Friday, though, since that G20 summit might just be making buyers nervous. Might be, though, that we've ran out of buyers for longer than that. I'll just have to wait until Monday to know anymore than that.
It was mostly just these super-short term players not being able to push up the index anymore and having to bail out of the effort, IMO. It means a lack of buyers in the underlying stocks on a longer timeframe, which since the weekend was coming up would mean a couple of days. I'm not sure that means much beyond Friday, though, since that G20 summit might just be making buyers nervous. Might be, though, that we've ran out of buyers for longer than that. I'll just have to wait until Monday to know anymore than that.
One other interesting twist re: Friday's action and this week. It's options expiration. This has been about the only bullish seasonal pattern for stocks this year. Stocks have moved up 80% of the time during expiration this year (Jan. and June were the only exceptions).
So now we have a bullish engulfing candle on Thursday (possible triple bottom to boot), a typical 40-50% retracement on Friday and all the fun and fireworks of expiration.
So now we have a bullish engulfing candle on Thursday (possible triple bottom to boot), a typical 40-50% retracement on Friday and all the fun and fireworks of expiration.
Here's your hogwash:
"Saturday is (was) the last day for thousands of investors to notify hundreds of hedge funds if they want their money back by year's end."
http://www.reuters.com/article/americasDealsNews/idUSTRE4AD04220081114
I didn't say it was the only crucial deadline for hedge fund selling, just one that might have thrown a kink in Friday's trading.
"Saturday is (was) the last day for thousands of investors to notify hundreds of hedge funds if they want their money back by year's end."
http://www.reuters.com/article/americasDealsNews/idUSTRE4AD04220081114
I didn't say it was the only crucial deadline for hedge fund selling, just one that might have thrown a kink in Friday's trading.