Fundamental Trading Diary

Fundamental analysis of the capital markets

Markets Thoroughly Trashed

Money Flow

Money flowed from

  • Bond yields: -2.2%
  • USD: -0.5%
  • Stocks: -2.17%

into

  • Gold: +0.84%
  • Oil: +1.13%

Looks like value has left the system for OTC hard assets and non-USD cash. At some point, I would like to devise an indicator which looks at the various asset classes *traded* value (not notional value) and determine more precisely how much money has gone where. We can easily view this in the microcosm of the stock markets through market capitalisation, but it is of course not a closed system. We can probably inference how much money is on the sidelines in the various currencies by examining it more broadly.

FOMC

The Fed is owed 5.5 billion from repurchase agreements today. Mortgage backed securities make up for 5 billion of it. With the Euro falling 50 pips in the past while before US open, this leads me to believe that the USD will be somewhat buoyed. We’ll see what they did in half an hour or so, and whether that sets the day’s temperament. Will we get the typical Friday market boost?

Joulien: I don’t have time to give you a statement, but I’m currently sitting with an equity gain of +$1,782.

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July 25, 2008 - Posted by | Uncategorized

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