Tuesday, January 25, 2011

1/25 Markets

What was that last hour?  Was it nervous short covering?  Was it desperate buying?  Was it an algo gone mad?  One thing we know about markets tops is volatility is present and we have certainly seen volatility the past few days.

Oil and Copper both have served as excellent guide to the future of equity prices and since the highs of copper on 1/3 the following divergence has occurred.

Copper - down 5.7%
Oil - down 6.8%
SPX - up 1.6%
IWM - down 3.5% from its 1/19 high

Seeing that move down in the USD towards the end of the day was a little ominous and may have triggered some equity buying perhaps?  These markets are very confusing right now.  What's happening across the globe in terms of uprisings against the government are equally scary.  All it takes is one shock event and treasuries and the USD will catch a very solid "flight to safety" bid at the expense of equities.

We are at very high levels of optimism with risk assets and very high levels of leverage.  A very toxic combination when the day arrives.



  1. "What was that last hour?"

    Good question. But heaven forbid we see the Dow down 100 points on the day of the SOTU address...

    Sometimes ya gotta wonder.

    Did you really run the Canyon -- South to North Rim and back??

  2. Should be a highly "motivational" speech tonight for sure. I'm going to fix the deficit, spend more on highways and work with my friends from across the aisle. OK...

    I did run the canyon rim to rim to rim. Amazing experience. Wish I had more time to spend in the canyon but with limited daylight we had to hustle the whole time.

  3. Pretty awesome accomplishment -- my hat's off to you.

    Having been there, there is no way I can even imagine running it, especially both ways in one day. We've hiked the canyon twice -- South to North, then both in and out the North side the second time, but with a couple of rest nights at Phantom Ranch both times.

    Amazingly enough, the second time we were hiking into the canyon was on the morning of Sept. 11, 2001. Just imagine the confusion at Phantom Ranch that afternoon, trying to figure out what was true and what wasn't. Luckily the ranger down there had an internet connection, and filled us in with some news articles that evening.

  4. Would love to spend a night at Phantom Ranch.... Crossing the Colorado River on the suspension bridge in the dark was one of the fonder memories of the run for me..... Bridge was swaying with the sound of the water below....

  5. My wife planned quite a bit in advance (two years?) to get us a cabin down there -- at the time they were mostly reserved for the mule riders (no idea what the policy is now).

    I should have said that we went North to South the first time, and chose to avoid the South Rim the second time as it was much, much busier. Though we were surprised the second time at how much the North Rim had 'grown' from the first time we were there.

    Yes, we spent our days soothing our sore muscles in the rushing water of Bright Angel Creek, and spent evenings taking sunset pictures off that suspension bridge, and swapping stories with other hikers and campers in the canteen. Good food there too! It is an enjoyable experience, to be sure.