with Oli | Strategies

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Just a short research piece …

Just a short quote from the Hedge Fund Monitor … published by Merill Lynch

Large Specs still long the SPX, short the NDX

Note: Commitment of Traders data reflects positions as of last’s Tues close

Equities:
Large specs continued to reduce their significant net long position in the S&P 500 futures last week. We assume part of this position is hedged,

…but historically when equity markets bottom, HFs are net short the market.

They marginally covered their net short position in the NDX while modestly adding to their shorts in the R2000. HFs are still a source of liquidity for the markets but less so with a potential buying power of ~$7.5b, consisting of ~$3b R2000 and ~$4.5b NDX

hmmm …

more pain to come …

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This entry was posted on Dienstag, Februar 17th, 2009 at 16:17 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Just a short research piece …”

  1. Oggo Says:
    Februar 17th, 2009 at 20:03

    Ever thought Oli that for every Long there is a Short? I find this type of analysis always not to helpful but rather misleading. It makes more sense to question how big the equity quota taking into account the whole wealth and the bond quota especially is in relationship to the overall wealth.

    We know: Treasury holders made big gains. Sub-Debtholders and Equity-holders made big losses in 2007/2008.

    Question is as with affiordability of housing: Give low interest rates and fallen prices affordability is as great as it hasn´t been for many years.

    And if I can buy a whole blue chip Co: Ar least at that point every fall will stop. There is a fundamental support level to everything from oil to water to houses to … equity. And that is the point where traditional relationship are way out of sync. Are we already there? Possibly not. SP 600 is possible. But from a long term perspective at some point further down there will be the support. And we are closer to the buttom then to the top.

    Very easy indead. We were at SP 1500. We are at SP 800. We won´t fall below 100 points. So the biggest part of the journey down has passed. Never forget this ;-)

  2. Oli Says:
    Februar 17th, 2009 at 21:12

    yes … I sometimes even think about that ;)

    What you mention about the S&P is as true as Banks are bankrupt and fell lower than you ever thought about :)

    I will see the bottom … if there is one … funnily I remember buying the market in March 2003 and did that 1 point above the low … LUCK and a bit knowledge.

    Take care my friend!

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