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. AnonymousFebruary 10, 2008 at 2:59 PM

    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

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