Guest post by Doug Short.
The previous week’s rally turned into a rout last week, except for China. The Shanghai Composite was the top finisher with a 0.90% gain with Hong Kong’s Hang Seng close behind with a 0.59% weekly close. The other six markets on my watch list finished deep in the red, ranging from the third-place FTSE 100 at -1.32% to the Nikkei 225 in distant last place at -3.71%. The S&P 500 finished sixth at -2.21%, just fractionally ahead of the DAXK at -2.24%. It was a grim week!
This week two indexes on the watch list are in bear territory — the traditional designation for a 20% decline from an interim high — unchanged from last week. See the table inset (lower right) in the chart below. At the bottom of the Bear Zone is, of course, the Shanghai Composite, which is a sobering 39.36% off its interim high of August 2009. The other bear-zone index is Japan’s Nikkei, which slid deeper into the red, 24.43% from its interim high of April 2010. At the other end of the inset, the S&P 500 is now 2.54% off its interim high.
Guest post by Azizonomics.
Most of us are at least passingly familiar with the theory: the completion of a new tallest skyscraper presages a market crash. Over-exuberant construction reflects over-exuberant markets, and over-confidence often spills over as the hyper-bullish slowly (and then quickly) realise that the good times are over
Here’s the story so far:
In case you missed it while you were busy eating easter eggs.
The NFP was a small disaster with the ES futures dropping hard.
The JPM Trader Bruno Iksil, is “distorting the index”. From Bloomberg.
A JPMorgan Chase & Co. (JPM) trader of derivatives linked to the financial health of corporations has amassed positions so large that he’s driving price moves in the $10 trillion market, traders outside the firm said.
Iksil may have “broken” some credit indexes — Wall Street lingo for creating a disparity between the price of the index and the average price of credit-default swaps on the individual companies, the people said. The persistence of the price differential has frustrated some hedge funds that had bet the gap would close, the people said. Full article here.
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