Stock Market Analysis: 03/15/11

The liquidity of ETF bond funds, however, builds on the willingness and capacity of authorised participants – typically the same dealers that provide immediacy services in bond markets – to make markets for ETF shares. Daily Finan. Bull 3X Shs(ETF)(FAS) – FAS continues to be dead as the financials lag the overall boutiques near me market. The combination of over-levered energy companies dependent on the HY market for funding, a collapsing oil price, an illiquid bond market and diminishing risk appetite are the ingredients for a bond market meltdown. The consequence of this is that market liquidity is now becoming more dependent on the portfolio allocation decisions of only a few large institutions. However we did see similar patterns in past market peaks as well. Yet, past episodes of large redemptions occurred at times when fund holdings were much smaller, both in absolute terms and relative to trading volumes and dealer inventories.

 

For your wealth grows, take into account that you will likely have to also increase the amount kept in your emergency fund. Now consider that the latest BoAML Fund Manager Survey shows managers to be highly overweight Technology, both at a global and US sector level. While the characteristics of US large and small capitalization stocks are not directly comparable, this chart from UBS shows the differential in EBIT margins between the two. The middle panel shows the ratio of Rydex bear to bull assets and the bottom panel shows the ratio of flow to bearish Rydex and money market assets to bullish assets. However, I can make a case that traders can find useful signals when the bear/bull asset ratio (middle panel) reaches a near-term extreme and the bear/bull flow ratio (bottom panel) reaches an extreme as well. Strictly from a bear/bull asset ratio viewpoint, I would therefore not be overly bothered by the all-time lows of bear/bull assets shown on the middle panel chart.