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•The Fed speaks, and in my view, market participants got the message WRONG. •The crude oil trade continues to determine the direction of the equity market. Perhaps a “signal” and change of sentiment has arrived. •Earnings are not as bad as expected, but they continue to go unnoticed amidst the obsession over crude oil and the Fed. •Investors need to mesh the good headlines with the bad and lose the confirmation bias which leads to bad decisions.
Thanks for posting the Seeking Alpha article. Below are some of my own recent observations and thinking.
I, myself, have been wondering what triggered the January sell off in the markets ... and, came to the conclusion that it had a lot to do with electronic program trading. It seems, there were some big money accounts that sold assets, as I have read, perhaps even some sovereign wealth funds to raise money to support domestic programs. No doubt, selling pressure in the capital markets was generated; and, I believe, program trading keyed on this selling pressure resulting in a good sizeable downdraft. Perhaps some might even say a selling stampede resulted.
From my own research, year-over-year earnings in the S&P 500 Index have been in decline for most of 2015 and had been trending downward until about September in which I noticed that they began to improve. From the reference source I use to follow earnings, earnings are currently projected to rise and to continue upward through much or 2016. With this, it seems to me, technical market trading patterns took over fundamental based market research and trading.
Within my own portfolio I have a good number of hybrid mutual funds (sixteen of forty seven funds) that invest in a combination of cash, bonds, stocks and other assets. In my recent month end study (January Ending Instant Xray Report), I detected that there was some good movement from stocks to bonds in these hybrid funds, as a whole, enough to the point that it raised my portfolio's overall allocation to bonds by 2%. Due to the delay in reporting mutual fund trading activity some of my hybrid mutual fund managers must of have had a feeling there was going to be a possible stock market sell off coming and began to move to bonds sometime back in late 2015 or because they felt stocks were overbought.
It will be interesting, to continue to follow this asset movement in my hybrid funds and see if this movement to bonds continues or if the hybrid fund managers change course and begin to now load equities perhaps following a fundamental path since earnings seem to be now improving and stock market prices have recently declined perhaps now to the point of becoming oversold.
I am wondering if anyone else, that closely follows their portfolio’s asset makeup, might have also noticed this?
Comments
Thanks for posting the Seeking Alpha article. Below are some of my own recent observations and thinking.
I, myself, have been wondering what triggered the January sell off in the markets ... and, came to the conclusion that it had a lot to do with electronic program trading. It seems, there were some big money accounts that sold assets, as I have read, perhaps even some sovereign wealth funds to raise money to support domestic programs. No doubt, selling pressure in the capital markets was generated; and, I believe, program trading keyed on this selling pressure resulting in a good sizeable downdraft. Perhaps some might even say a selling stampede resulted.
From my own research, year-over-year earnings in the S&P 500 Index have been in decline for most of 2015 and had been trending downward until about September in which I noticed that they began to improve. From the reference source I use to follow earnings, earnings are currently projected to rise and to continue upward through much or 2016. With this, it seems to me, technical market trading patterns took over fundamental based market research and trading.
Within my own portfolio I have a good number of hybrid mutual funds (sixteen of forty seven funds) that invest in a combination of cash, bonds, stocks and other assets. In my recent month end study (January Ending Instant Xray Report), I detected that there was some good movement from stocks to bonds in these hybrid funds, as a whole, enough to the point that it raised my portfolio's overall allocation to bonds by 2%. Due to the delay in reporting mutual fund trading activity some of my hybrid mutual fund managers must of have had a feeling there was going to be a possible stock market sell off coming and began to move to bonds sometime back in late 2015 or because they felt stocks were overbought.
It will be interesting, to continue to follow this asset movement in my hybrid funds and see if this movement to bonds continues or if the hybrid fund managers change course and begin to now load equities perhaps following a fundamental path since earnings seem to be now improving and stock market prices have recently declined perhaps now to the point of becoming oversold.
I am wondering if anyone else, that closely follows their portfolio’s asset makeup, might have also noticed this?
I wish all ... "Good Investing."
Old_Skeet