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Bank Of America Quant Update: Buy Into The Euphoria Phase Of The Market

Tyler Durden's picture




 

A completely worthless analysis on quant factors from Bank Of America (probably written in conjunction with David Bianco), which concludes that momentum quants have ruled so far this year. What is amusing is that in the very same report, BofA confirms that Momo outperformance such as the one seen currently and evidenced by the appearance of numerous services catering to momo trading echochambers in twitter and elsewhere, is associated with the Euphoria phase of markets, which usually precedes at least a 20% drop. Brilliant.

First, the bank notes that momos have outperformed...

...even though a few charts later BofA confirms that momo outperformance is associated with the euphoria phase of the market, better known as the one where Cramer says buy everything one day, buy gold the next, sell everything the third, all the while theStreet.com is investigated by the SEC.

For those who want to lose about 100 IQ points, click here.

 

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Tue, 05/18/2010 - 16:04 | 358972 BlackBeard
BlackBeard's picture

You first, BAC.

Tue, 05/18/2010 - 16:06 | 358977 Goods
Goods's picture

I wonder if they have been taking advice from Leo?



Thanks for quoting me, and as far I can tell, calm is restored and the markets are heading up again. Not good for gold.

Tue, 05/18/2010 - 16:07 | 358982 Sudden Debt
Sudden Debt's picture

the pdf link don't work and your servers are getting a bit overloaded.

You guys should put your images and files on extern servers to lighten the traffic dudes.

Tue, 05/18/2010 - 16:54 | 359056 adeptus
adeptus's picture

ZeroHedge... PLEASE upgrade your bandwidth and/or servers. Your site is consistantly unavailable for LONG periods of time  anytime significant news breaks out. We love you, we really do, but please upgrade! Also let us know if donations actually make a significant difference in regards to your upgrades, because otherwise we might just assume you guys are all making millions with all your insider info.

Thanks!

Tue, 05/18/2010 - 19:59 | 359422 ColonelCooper
ColonelCooper's picture

I'm sure T.D. is right now as we speak soldering diodes to a Kirby vacuum motor, and hooking it up to an exercise bicycle to keep the show running.  This place doesn't exactly have a ton of big corporate sponsor's ads glued all over the page, if you haven't noticed.  Personally I'm grateful for the effort.  Andrew Maguire blew the whistle on ONE aspect of the B.S. going on right now, and they tried to run him down in the street. 

Do you people who keep asking him to upgrade really think he's not aware of the problem?  Good effin Christ!

Tue, 05/18/2010 - 17:01 | 359075 Tart
Tart's picture

Completly worthless? I'd assume ZH's selectively skipping over good earnings like HPQ is in itself worthless. How about something other than the negative  mirror image of CNBC's one sided bs. That's actually a disgrace to CNBC because they actually have two sided coverage. Give us your negative spin on HPQ's numbers and make it a topic. Not to mention every time the wind blows this site goes down.

Tue, 05/18/2010 - 17:21 | 359129 Strider
Strider's picture

HPQ? Do you read charts? A big WOW to HPQ for moving the needle $1 on a 28% boost in profits. You can go back to sleep now the market didnt care. HPQ going down now.

Tue, 05/18/2010 - 17:10 | 359099 MaxVernon
MaxVernon's picture

I'm fairly new here; what the eff is a momo?

Tue, 05/18/2010 - 17:22 | 359133 Goods
Goods's picture

Momentum. It's mentioned on the charts.

Tue, 05/18/2010 - 18:34 | 359247 Strider
Strider's picture

Momo:

http://www.investopedia.com/terms/m/momoplay.asp

 Investopedia for financial queries. The rest of the answers are on this site.

 

 

Tue, 05/18/2010 - 19:30 | 359369 Hephasteus
Hephasteus's picture

Or if you're visual you can watch this video to explain it.

http://www.321gold.com/mustread/spotgold500_grrrrrr.html

Tue, 05/18/2010 - 21:08 | 359553 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

A momo is what B. H. Obama wears when he gives Goldman Sachs a good one.

Tue, 05/18/2010 - 17:12 | 359107 Strider
Strider's picture

Anyone remember a post from last month about  Goldman to sell huge blocks of SPY at.....  was it $111.30?  Any recall ? Thanks I want to watch that depth charge.

Tue, 05/18/2010 - 20:42 | 359506 mephisto
mephisto's picture

Always curious - how does momentum not end up buying after big upticks selling after big downticks??

Surely just a fancy trend following algo, crushed on the turns.

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