The Dow was off 500 points, S&P down 60 points, and the Nasdaq down almost 150 points.

Quite astonishing to see the US 10 year bond with a one handle. Kudos to David Rosenberg, who wins his bet with Mark Faber over the below 2% yield.

As noted August 1, I have limited exposure to equities — mostly value indices, some managed funds that can run up heavy cash positions. Our tactical portfolio flipped form 100% stocks in June to 50/50 stock/bonds in July to 100% bonds in August.

All told, not a bad day to be a bear . . .

>

Previously:
Lightening Up on Small Caps, Emerging Markets (August 1st, 2011)

There’s Something Happening Here . . . (August 2nd, 2011)

Sell the Bounce (August 3rd, 2011)

Man the lifeboats: This is not a drill! (August 7th, 2011)

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

22 Responses to “US Markets Off 5%; 10 Year @ 1.97%”

  1. rktbrkr says:

    Those euro bank rumors have legs.

    That Philly Fed number was astounding, expected +2 from last months +3 and got -32??? WTF

    The TBTF will be rockin and rollin. I think BAC will dump Countrywide into BK sooner rather than later, Labor day weekend would be a good time

  2. rob says:

    Barry, I don’t want to sound ungrateful for your predictions and statuses, but wouldn’t it just be easier to post your travel itenerary? A few days in advance of course!

  3. Didn’t you have a bet with someone on the shiny yellow stuff that no one needs? How is that working out?

  4. royrogers says:

    not a bad day for a bear, one that is also holding gold .

  5. SivBum says:

    Selloff gotten worst from the start. The shorts are plain lucky ahead of option expiring this Friday. May be it’s time to begin buying back in.

  6. BTW,

    Trading positions:

    25% cash in oil
    80% cash in gold

  7. royrogers says:

    we should be all thanking Barry for raising a red flag for us the past few months.

    This is why i always check in here almost everyday, though I am a novice.

  8. Mike in Nola says:

    Well, it looks like Faber is heavily shorting Treasuries to keep them above 2 :) Don’t think it will hold though.

  9. Mike C says:

    BTW,

    Trading positions:

    25% cash in oil
    80% cash in gold

    Huh? First, that doesn’t add to 100.

    Does that mean 100% in CASH or that you are fully invested in oil and gold.

    FWIW, still holding a good chunk of gold although I sold 1/2 the investment position with GLD at 171.

  10. MayorQuimby says:

    Don’t worry everyone. Bernanke will be at Jackson Hole where the intelligencia (who know exactly what they are doing of course) will come out with an inflation target and threaten to print print print until we get there because deflation must NEVER EVER in a MILLION YEARS EVER occur even though inflation is a byproduct of real economic activity and any attempt to force it results in the theft of purchasing power of hundreds of millions of individuals which undermines capital formation and makes things worse long term into a gvmt accruing exponential and increasingly unserviceable debt at a faster and faster rate! There won’t be anywhere for the wealthy to hide before long.

    Enjoy the loss of reserve status which should cause oil to rocket and push things right over the edge. Keep believing in free lunches and pain free credit contractions and insolvent banks. Keep believing we can have deleveraging and lower prices while at the same time having healthy capital formation, inflation AND credit expansion!!!!

    Cake and eat it too. Doesn’t work. Won’t work. Grow up before it is too late.

  11. Mike in Nola says:

    @MayorQuimby: Imagine what happens to stocks if BB feels politically constrained from promising more QE. We’ll be looking at the old lows again.

  12. BenE says:

    Congratulations on the wicked good timing.

  13. MayorQuimby says:

    Mike-

    Maybe. Very possible.

  14. foosion says:

    Great day to be a bear. However, in the immortal words of Peter Lynch, “More money has been lost anticipating bear markets than was ever lost in them.”

  15. OK Avenger says:

    Massive Big Government Intervention through socialist public works??….Please!!

    Time to build NCC-1701? The Klingon Empire is a clear and present danger to the USA.

    Anything that will increase G……. since C, I, and net X aren’t doin’ the trick.

    Lord Keynes, call your office.

  16. MaxThrax says:

    People who scream that lunch isn’t free are often the ones who got the most free lunches, and dessert too.

  17. Joe Friday says:

    Mike C.,

    BTW, Trading positions: 25% cash in oil 80% cash in gold

    Huh? First, that doesn’t add to 100.

    Max Bialystock math.

  18. nofoulsontheplayground says:

    As I mentioned early last week, this looks very similar to the move off the 840 SPX area in Oct. 2008. We moved up quickly, then re-tested that area again before consolidating in a range.

    It’s interesting that in 2008 money flowed out of risk assets and into the USD. Today the risk-off money is flowing into Gold rather than the USD.

    I wonder if Jim Rodgers is still short Treasury bills.

  19. @Mike C.,

    I was wondering if that was going to trip someone up. I thought I’d let it go unless it got challenged so as not to clutter the thread

    Here is clarification:

    Trading positions:

    25% of the money allocated to my oil trading position is in cash

    80% of the money allocated to my gold trading position is in cash

    I also have buy and hold positions that I add to from profits in my trading positions

  20. nofoulsontheplayground says:

    Man, there are some whopping high put/call numbers printing so far this session. Equity put/call is at 0.90 and total is almost at 1.50.

    The incredible high volume of the index activity is what’s blasting the total put/call number up so high.

    This is still looking very much like a re-test of last week’s low. Watch the VIX to see if we print a lower high on a re-test.

    The Euro/USD trading has looked a lot like the Chinese Yuan/USD trading lately. It’s almost as if it’s there’s an attempted peg going on. I assume it has something to do with the naked EU CDS exposure US banks have.

  21. machinehead says:

    Our tactical portfolio flipped form 100% stocks in June to 50/50 stock/bonds in July to 100% bonds in August.

    WELL DONE!

    Without giving away anything proprietary, an elaboration on the methodology would be welcome — all technical, or is there a relative value component?

  22. Mike C says:

    Without giving away anything proprietary, an elaboration on the methodology would be welcome — all technical, or is there a relative value component?

    I’ll second that although I highly doubt Barry is going to give the store away for free.

    Some butt-kissing here. I follow a shitton of strategists and bloggers, Hussman, Grantham, you name it. Absolutely no one that I know of has navigated the last several years better then Barry’s calls. From the topping process in 2006/2007 to navigating 2008/2009, flipping long in March 2009 to the summer 2010 correction to now Barry is batting 1000. On the flip side, some people are like talking parrots who only know “stocks are cheap relative to bonds based on forward earnings” and are bullish 100% of the time including the Oct 2007 top and the recent April/May top.