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aussiebear

World Stock Markets Trading Discussion - Bedraggled blips

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MORE THOUGHTS ON INDEX FUNDS

Index funds are a great idea and will beat the majority of hedge funds over the long term.

However their archilles heal is value.

At the end of a bull market index funds will typically be stuffed with over valued large capital stocks.

Which will tend to give up a large part of their value.

There needs to be some mechanism which allows index fund to hold large cash balances (or even bonds) when a fairly long term moving average technical indicator such as the 200 DMA is on a downward slope.

A sort of "Get out of market free" card.

But I guess a smart beta etf would have this covered already ????? 

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On the shut down; there is an asymmetry in effect between the financial markets and the GNP economy in that the $100bn+ not borrowed from the financial economy and not put into the GNP economy has a larger and much faster effect on the markets to the plus side, mainlined into the market with every bill paydown,  than it does to the GNP economy on the downside with checks not being sent out.

Any negative GDP  economy numbers will only just now begin to show in the reported numbers. An  irony is that many numbers will not be coming out, because of the shutdown. Negative numbers news are always a hook to bring the market down. I would expect at least a few days of worry here and there to stall this meltup with drips of news about the shutdowns effect on the economy dribble out.  Then I would not be surprised if there is  a brief  explosion to the upside when the shutdowns end is announced.  

The wildcard is the length if  it drags on into? March? 

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All Ords 5-day chart

big.chart?nosettings=1&symb=AU:XAO&uf=0&

http://bigcharts.mar...com/default.asp

 

An orderly decline today with All Ords closing -0.5%.  Consumer Staples/REITS gained +0.3% and Financials -1.2% was down the most.

Over in Asia, China -1.2%, Hong Kong -0.7%, Japan -0.5%, India currently -0.5%.

UK/Europe just open and it's down so far, FTSE/DAX/CAC all -0.2%.

 

big.chart?nosettings=1&symb=UK%3AUKX&uf=

  

  

big.chart?nosettings=1&symb=DX%3ADAX&uf=

 

 

big.chart?nosettings=1&symb=FR%3APX1&uf=

  http://bigcharts.mar...com/default.asp

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I can't figure out how ES and other futures traded or at least had quotes all day yesterday.  I get they are electronic trading but the exchanges were listed as closed. What is the meaning of closed?

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NAR:

 

After two consecutive months of increases, existing-home sales declined in the month of December, according to the National Association of Realtors®. None of the four major U.S. regions saw a gain in sales activity last month.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.4 percent from November to a seasonally adjusted rate of 4.99 million in December. Sales are now down 10.3 percent from a year ago (5.56 million in December 2017).
...
Total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November, but represents an increase from 1.46 million a year ago. Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months a year ago.

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The NAR SA data is nonsense. Only use the NSA y/y and compare the changes month to month for the true picture. 

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I only use y/y. What they are reporting is consistent with what I'm seeing in our local market in California and surrounding states.

 

For California CAR reports:

 

December’s sales figure was down 2.4 percent from the revised 381,400 level in November and down 11.6 percent from home sales in December 2017 of 420,960. December marked the fifth month in a row that sales were below 400,000 and the lowest level of sales sold since January 2015.

“The housing market continued to shift in December and drift downward as sales have fallen double digits for the past three out of four months,” said C.A.R. President Jared Martin. “This trend is expected to continue, as buyers remain cautious about the murky housing market outlook due primarily to the volatility in the financial markets and uncertainty in the economic and political arenas.

“Additionally, housing markets in and around the wildfire areas have been exhibiting unusual patterns that could remain unsettled for the next few months. The impact, however, is confined mostly within the region and should not have a noticeable effect in the housing market at the state level.”
...
Statewide active listings rose for the ninth consecutive month after nearly three straight years of declines, increasing 30.6 percent from the previous year. All major regions recorded an increase in active listings, with the Bay Area posting the highest increase at 65 percent, followed by Southern California (34 percent), Central Valley (24 percent) and the Central Coast (12 percent).

The Unsold Inventory Index, which is a ratio of inventory over sales, increased year-to-year from 2.5 months in December 2017 to 3.5 months in December 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate.

 

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