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"Mutual Fund Monday" Update: 16 Out Of 17 Winning Mondays; Two Standard Deviation Event
Time to update our "Mutual Fund Monday" analysis: since December 7, there have been 17 Monday, during which there has been just one down day. Statistically, this is even nuttier than Goldman's Q2/Q3 2009 profitable trading days. At 94%, we are two standard deviations away from statistically probable distributions. Furthermore, since the beginning of September, when the Mutual Fund Money phenomenon became especially pronounced (read our initial observations here), there have been 27 out of 31 profitable Mondays. There is no spoon. And this is considered perfectly reasonable market performance? It is time for Nassim Taleb to denounce the statistical wackyness that equity markets have become.
with Erik Hane
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Guess you have to play it until it doesn't work any longer.
data mining alert.
is there a point where it doesn't become data mining for you?
Yep. I noticed this crap pretty early on and made sure to rarely be short over the weekend. Interestingly, there is a gap around 8200 and one near 6500 that SHOULD fill. I don't know if the gap filling rules apply to a manipulated market.
ok will someone take a very long 2 x 4 and beat me over the head - senseless! this is CRAZY and my brain hurts, and i want to dull the pain with pain.
It's just building cause for long term out of the money short plays and puts. And that's how the big money is made when insanity is considered normal.
This is insanity. A Fed meeting with no announcement. A bond market about to go parabolic in the wrong direction. And equity market where every Monday fewer than 10 stocks makes up about 60% of the total volume on the NYSE.
I know we are getting near the top as the news stories locally start to appear about the "new day traders" and that is always your sign when you hear those stories and customers starting to discuss how well their 401K is performing this year; even though if they've held it for over a decade it hasn't broken even.
Too many stupid people, not enough freedom to short their life span due to stupidity either.
Also, lots of chatter now that the ISM numbers and jobs number have confirmed beyond a doubt that we've recovered and the market will continue higher. Two guests in a row on Bloomberg said they would be advising clients to buy here. We're clearly going higher.
Let's see.
I'm looking at some alternative measures. We've recovered alright. Back to 2004 levels.
this is the part i personally find most fascinating -- all these economic releases with the attached label "best since 2006" or "fastest since 2007" in which somehow the fact that they are all universally coming off "the worst reading in the history of the data series" is glazed over
and its the end game that i truly dont understand altho im sure the stock market has it totally figured out because it is forward looking and all -- the recovery that took place starting in 2003 resulted in negative job growth, ie, there were more jobs destroyed in the downturn than were created in the upturn - never before the case in postwar US history
why was that the case? well, because the economic rebound manufactured in 2001 with 1% interest rates was characterized by too much borrowing, too much consumption and too little saving (in fact big negative saving)
sound familar? well it should, it is exactly what we are doing right now, only a much bigger scale.
so, back to the initial premise / question - if the last time we did this we blew more jobs up than were created and this time the starting point is much higher unemployment, much higher debt levels and much higher commodity prices - then this time we have smoothsailing to sustainable economic recovery? huh?
and why exactly again, because consumer stocks are "telling you" things are better? sorta like tech stocks were "telling you" the coast was clear in march 2000?
again im sure im wrong because the 200 day moving average on the S&P is upward sloping so clearly the market has wrestled with this and determined its really no big deal
Anyone see Schiff offer to pay Greenspan his speaking fee to debate him?
Also read three separate articles today saying we're in a "Goldilocks" environment again. And, no, Kudlow was not one of the authors. We're not at implosion point yet but we'll get there.
I know the market is about to roll over because I'm tempted beyond all reason to jump in. I'm torn: do I go ahead and jump in and get slaughtered, but bring all this madness to a conclusion, or do I continue to sit on the sidelines, relentlessly losing ground, and ensure that everyone else who's in can continue their race to infinity and beyond. Nothing makes sense.
I feel like I'm trapped in a Dali painting, where everything is warped and distorted, my wealth perpetually dripping into the bottomless yawning abyss of Ben B's distended jaws while a miniature Timmy G rides a stick pony around his mouth and in the background Maria Bartiromo is singing opera I can't understand. What does it mean?
Take one for the team, Roscoe; go all-in.
The market is absolutely October '87-esque...
come on thats nuts im not sure a comparison to 1987 makes a lot of sense
GDP grew 7% in Q4 1987 -- we dont have a prayer of growing that fast during this year
weird that the market managed to crash with such "robust growth"
know how fast GDP grew in Q2 '00? 8%. somehow defying belief the nasdaq dropped about 20% that quarter, on its way to an ultimate 50% drop.
but look at the bright side at least we are levered in a way that has no relevant historical precedent so that should make for much smoother sailing this time around
As a fellow also named Roscoe... Ignore it.
If you've got a plan stick to it. Don't throw away the hard work. Do what makes sense.
The time of insanity is upon us, the sane will seem insane, the insane will seem sane.
Remember this is all psychology; If your are harmonious in spirit with yourself, there is no need for the stock market.
The stock market needs you to play to exist. Ignore it and laugh at the insanity!
"Two standard deviation event"
Yeah, in a real market perhaps. In this market, 100% probability event. Nothing to see here.
Seems to be its a race to November elections on holding up the market to lessen GOP wins then the old wispers of higher taxes start and BOOM.
Errrr....yeah,and this is at the same time journo's like Ambrose Evans Pritchard of the UK Telegraph announce the end of money printing by the Fed,either the Fed is still printing or the market is in for a Wile E Coyote type plunge from here.There is no way the Fed will stop printing,as Marc Faber said recently,you will never see 666 on the S&P again,if the market does drop appreciably,Bernanke will print until sparks come out of the presses before the notes,however I still think there is a potential for a small correction from here,as a result of the well publicized large S&P futures purchases recently.Still short the Q's incidentally.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7553511/Deflation-on-the-prowl-as-Bernanke-shuts-down-his-printing-press.html
I just checked with fat tony. He says the dice are loaded.
Interesting thing to point out is that on Tuesday, 19 Jan (i.e. following Monday Jan 18 being a public holiday in the US with markets closed) the significant drops in all major indices observed before the weekend (Friday 15th Jan) were countered completely. I wondered if these Tuesdays were included in your analysis of the Monday-effect. It is clear, nevertheless, that overnight futures are being manipulated. But why especially in weekends? Is it, or how is it connected to the daytime manipulation of stock prices? Another clear intra-day manipulative trend in European stocks and indices is the quasi linear ramping up of prices at or around 15:30 (GMT+1) in Europe, when Wall Street opens, usually reversing the trend that was followed up till then. Have a look at CAC40 chart today - or check the chart of Belgian KBC bank (to pick just one example):
http://finance.yahoo.com/q/bc?s=KBC.BR&t=1d&l=on&z=l&q=l&c=
Did optimism suddenly come back after 15:30 (after downtrending since 11:00)? Thanks, optimists in America!!
Perhaps helped by a little short squeeze, manufactured by HFT programmes that are launched on EU markets at 15:30?
the study is the first day of the week versus the last day of the previous week, sometimes they include Thurs and Tues when Mon or Fri is a holiday as you mentioned.
Heres another one for ya,since 8th Feb this year there have been 40 trading days and the market(including today) has only gone down 8 of those days,thats 32 to 8 or 4 to 1,ya can't lose I tells ya!!!.Roll up roll up...........
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