The market is looking to the green again today, even though the employment data that just came out is, again, disappointing. I find it interesting that the market is trying to go up after so much emphasis was put on the employment report this week. It seemed a do or die situation come today, yet ….
It might be that things have settled down, the fear has dissipated, the panic is over. Those who took profit are now waiting for the bottom and those who jumped ship, it might be a while before those folks get back in at all. Those folks are shorting the market, if they are doing anything, so we might not see their long money for some time or, we might see their shorts bearing fruit for the bulls in a short squeeze.
That’s fine. We don’t need that paltry amount of money anyway.
- Investors pulled a record $28.3 billion from equity funds during the week ended Feb. 5 MarketWatch reports. About 95 percent of the money taken out of stock funds came from exchange-traded funds, according to Citi Research data.
As of December 31, 2013, the total value of the global equities market stood at $65.3 trillion. Did you read that right? Yup, you did. By the way, this amount is a record. So, why is the breathless media freaking out? Why are some spewing nonsense that the market is going to crash?
- At the same time, investors put $14.8 billion into bond funds.
The above explains the dip in bond yields, which, over time, will draw money back into equities, so what is all the fuss about?
And what about the price of gold, you know, the safe haven in times of trouble? As I wrote earlier this week, the price of gold, is, well, stable, for lack of a better word. It doesn’t seem to be doing anything. So, what happened last week and earlier this week? Why did the market react as if the second coming of 2008 was upon us?
- Investors also pulled $6.4 billion from emerging market funds.
Okay, so what the heck are we talking about here? The total value of global emerging market funds is way higher than that.
Okay, just one more, what does the price of oil tell us? Well, the price action is not indicating a market that believes the global economy is coming apart. In fact, it is behaving as if it believes the economic future is rather bright, given the surplus of oil around the globe.
The point of all this is to say that we might have reached the market bottom, and, if not, we are closing in, getting close. Since we just had some rain, the first serious rain in well over a year, it is easy for me to keep my powder dry, but for those of you who get plenty of moisture at this time of the year, pay attention to keeping your powder dry. You are going to need it soon enough.
Trade in the day; Invest in your life …
