Random Thoughts for the Day: Thursday Aug 17 2007

Well, today was a wild day in the markets. Many of the markets were down more than 2% during the day, with the higher-beta emerging market or commodity-sensitive ones down a lot more, but there was a massive rally near the end of the day and the losses were pared. S&P 500 even finished in the positive (just barely). Here is a chart of the S&P/TSX Composite which finished with a loss of -1.53% but was down around -4% during lunch.


(source: The Globe & Mail)



Almost everything sold off and ended up with losses. If it weren't for the big rally near the end, some sectors like materials and energy would have been down quite a bit. The S&P/TSX is close to negative, if it isn't negative already (same goes for the Dow and S&P500).

The most important thing to note is that there was a massive rally in the Yen:


(source: StockCharts.com)



This is an amazing appreciation for a currency in one day. Things like this just doesn't happen often so one should pay attention to it. I don't know if this is a permanent unwinding of the Yen carry-trade or not.

The verdict is still out on whether this is just a correction within a bull market or if this is the start of a bear market. Hard to say at this point but whatever it is, I am thinking of my next move. As I have remarked before, I will most likely buy ABN or TRB in the hope of profiting from the announced merger.

Comments

  1. You can use www.madmergers.com to quickly find merger data, because, as you said, it is so important to stay on top if it!!

    ReplyDelete

Post a Comment

Popular Posts

Thoughts on the stock market - March 2020

Warren Buffett's Evolution and his Three Investment Styles

"The Markets They Are A-Changin'"