This is what the past 5 months have looked like in terms of Monthly S&P500 closes:

May

-1.35%

June

-1.83%

July

-2.15%

August

-5.68%

September

-7.18%

October

?

Hat tip @TBPInvictus

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.

21 Responses to “Monthly SPX changes”

  1. kevin says:

    Crazy market performance.

    past performance is not indicator of future results. Interesting data on the often looked at ‘Dr. Copper’. Looking at historical data it should be viewed as more of an indicator of future RISING stock prices than a predictor of upcoming equities bear market. Just an observation. Historical data does not lie.

    http://takingmoneyseriously.blogspot.com/2011/09/dr-copper-needs-license-revoked.html

  2. Francisco Bandres de Abarca says:

    For starters, October will be gloomy. Period.

    For the approaching Q4 and Q1/12, it will be a matter of concatenation. That is to say, what degree of a ‘piling on’ of events might we face? If we merely face decreasing earnings/profitability/sales, what have you, we may consider ourselves fortunate. However, if the much dreaded credit event(s) arise, then the Lehman event may indeed appear pale by comparison. But, one must bear in mind that the bond market is typically a rather phlegmatic market, often taking much longer to play out it’s maladies than many anticipate, due largely to persistent governmental actions, and many an investor’s willingness to believe in the comforting words on institutional communiques spritzed with perfume and promises. So, we may indeed see Greece hobble successfully all the way to March.

    One concern I’ve not seen addressed is the impact of increasing costs of ‘insurance’–the upward price trend in credit default swaps. When CDS prices increase in rather esoteric or less widely held segments of the credit market, the drain on market capital is generally small enough to not be of concern. But, when the cost of insuring against loss in what may be considered cornerstone assets (e.g. sovereigns), the thinning-out of capital resulting from such frictional costs could be substantial. At some point, any given investing institution may resolve to begin the liquidation of the underlying asset if the insurance costs make holding the asset unprofitable.

  3. “… At some point, any given investing institution may resolve to begin the liquidation of the underlying asset if the insurance costs make holding the asset unprofitable…”

    nice Point~
    ~~

    for ‘smaller Fry’, they should ken.. http://search.yippy.com/search?query=Protective+Puts+as+Insurance&tb=sitesearch-all&v%3Aproject=clusty at the minimum..

    and, as they’ll see, much to BR’s, repeated, and repeated, and, no less accurate, thereby, Point..~”The best Time to Plan for the Storm, is before it begins to Rain..”

  4. RW says:

    When the 28-day T-bill gets auctioned at a zero nominal interest rate and Treasury receives more than five times as many tendered offers as there are bills to be sold …well, I’ve gotta ask, why not offer five times more and do something with it — infrastructure, extended unemployment benefits, give it away, who cares — the dough is free and a little more money velocity in an economy headed for the dumper could do a lot of good; could make a bad year a little better for a lot of folks who are hurting too.

    This Austerian quackery really has put the developed world into a nutcracker but I would have thought Americans were made of bolder, tougher stuff or at least were sharp enough to pick up a billion-dollar bill when they saw it lying on the sidewalk …and generous enough to hand a tip to the bums who didn’t notice it and passed on by.

    Oh well (shrug).

  5. bobbyd says:

    equity markets went up because QE allowed banks to hold more reserves, which they lent out to Hedgefunds via the repo market. The hedgefund used the capital to leverage up, pushing equity prices higher, and higher.

    Now Hedgefunds are deleveraging, so equity prices are falling, and falling. The acceleration in declining share price is a function of every hedgefund heading for the exit at once.

  6. This losing streak is very similar to the one which opened up the last crisis. From Nov’07 to Mar’08, the S&P500 decline five months in a row for a grand total of -14.6%. We are opening this crisis with a five-month losing streak too, and this time around the loss amounted to 17.0%…

    Numbers side-by-side:
    http://penguinsgoldenegg.blogspot.com/2011/09/s-5th-consecutive-month-in-red.html

  7. Chief Tomahawk says:

    Larry Kudlow was a little despondent on tonight’s show.

  8. Thx, Barry…And here’s a look at the 3rd quarter and the year, so far, for the Dow 30, S&P 500, Nasdaq Composite & Russell 2000: http://strawberryblondesmarketsummary.blogspot.com/2011/09/who-won-pinball-game-in-3rd-quarter-of.html

  9. pintelho says:

    interesting…i always feel smart when i am looking at the same things the big guys are lookin at.

    not only are the monthly percentages ugly BR and Invictus…the MACD on the monthly went negative…plus we are now 2 closes under the 13 month EMA.

    These last 2 months look very much like Jan and Feb of 2008 from a candle perspective.

    Anyway more fun and a chart at the following:
    http://mourotradingjournal.blogspot.com/2011/10/macd-negative-on-monthly-s-500.html

  10. rktbrkr says:

    RW, good point

    Why doesn’t Treasury eliminate 0% as the floor on TBill auctions? In effect charge a holding fee like BONY?

    It didn’t all happen on the first day after QEII ended but falling securities, commodities and interest rates all point to the absence of QEIII and all Ben Shalom can do is bleat about the unemployment crisis.

  11. Doctor Bang says:

    As I stated at the end of last week this market is about to go straight up for 4th quarter, all sentiment indicators are pointing to at least a double digit move in the 4th quarter. good luck all.

  12. dead hobo says:

    Just wait. Take a look at the S&P from Aug 2011 to the current date. You will see a double head and shoulders formation. Yes! A H&S within a H&S. Real cool. Unless trusting Martians show up with folding money and a fully intact banking system, there will probably be a big supporting dip in Oct. I mean really big.

  13. dead hobo says:

    pintelho Says:
    October 1st, 2011 at 12:25 am

    interesting…i always feel smart when i am looking at the same things the big guys are lookin at.

    reply:
    ———
    Come back to earth, buddy. A lot of those guys still think commodity prices are a function of supply and demand for the commodity, as opposed to how they are now really set. Today, new cash enters the financial markets, bidding up all asset prices. Included with these assets going up are commodity oriented long only ETFs. Their rise is a function of market liquidity and animal spirits, not supply and demand for the related commodity. The underlying is the PRICE of the commodity. As the EFT rises, the related commodity also rises in price due to arbitrage. Sellers, who are normally on the other side of buyers, just say Thanks. This also means that QE2 contained the seeds of economic destruction since oil prices rose and crushed the recovery, all thanks to poor commodity regulation and the Fed’s QE2 pump and dump.

  14. dead hobo says:

    How the Earth will really end:

    Martians come to Earth. They bring money and a fully intact banking system. They have no idea of what a derivative is, nor have they ever heard of leverage. Friendly members of the investment community teach the visitors how to make enough money to turn Mars into a lush paradise. They learn about off the books accounting entities, credit default obligations, reserve banking, money printing, and the miracle of unlimited credit for all who ask for it. Earth bankers earn a fee for their services, of course, and participate in a few, cherry picked, commercial ventures on Mars and Martian financed developments on Earth.

    Eventually, Mars experiences it’s first and only credit bubble burst since nobody could possibly pay back all the loans that came from money that was manufactured out of thin air. Mars becomes a desolate planet as a result of financial innovation.

    To express gratitude for Earth’s participation and educational efforts in Mars’ decline and fall, Mars decides to repossess Earth and evict the original residents. It takes 5 days to complete the foreclosure as Mars isn’t sophisticated enough to know about mortgage law.

  15. EDF says:

    This may seem off-topic but given some of the apocalyptic comments above:

    Looking at the charts (incl those of SB — thanks): To me, it looks like a system out of control. Systems that vibrate like this don’t stabilize; they get worse. Is the basic problem HFT?

  16. ancientone says:

    But don’t forget, gang, we’ve always been told that October is the bear market killer month (except when it isn’t).

  17. wunsacon says:

    >> Is the basic problem HFT?

    I doubt HFT is “the basic problem”, though it aggravates the situation.

    Identifying “the” basic problem depends on how far down the rabbit hole you want to go.

    - You could start with the fact that the Establishment (Wall Street, DC) is preventing “price discovery” of fake assets on their books. How do you assess the value of a share of stock without mark-to-market? Or without knowing which way the political winds will blow vis-a-vis the next bailouts or more QE?

    - You could move on to corruption. As Bill Black says, Wall Street is a criminogenic environment. (And these plunderers contribute to campaigns. So…) I think NYC and DC are “hives of scum and villainy”.

    - You could move on to lack of transparency, which facilitates corruption. So much of what DC, the military industrial complex, and the financial complex (e.g., the Fed) do is hidden from view. The problem is so great that — as the late great Chalmers Johnson pointed out — American citizens cannot even analyze an event like 911 properly.

    (I’m pretty sure I’m skipping some levels…)

    As you evaluate a problem at any level (e.g., TBTF), you sometimes discover the problem is a symptom of a deeper root cause. “Lack of transparency” might be one of the deeper root causes. (As you might recall from “Econ 101″, one of the basic assumptions for markets to work efficiently is: perfect information.) But, some might argue that human psychology offers even “deeper” root causes. (I don’t argue that, because we can’t really change that.)

  18. ThatsNotAll says:

    Two questions to RW,

    (1) How long can a government print currency before something bad happens?

    (2) What are the various bad things that might happen when a government’s debt exceeds any realistic expectation that said government can repay its debt without greatly devaluing its currency?

  19. pintelho says:

    @ dead hobo
    ” Today, new cash enters the financial markets, bidding up all asset prices. Included with these assets going up are commodity oriented long only ETFs. Their rise is a function of market liquidity and animal spirits, not supply and demand for the related commodity. The underlying is the PRICE of the commodity. As the EFT rises, the related commodity also rises in price due to arbitrage. Sellers, who are normally on the other side of buyers, just say Thanks. This also means that QE2 contained the seeds of economic destruction since oil prices rose and crushed the recovery, all thanks to poor commodity regulation and the Fed’s QE2 pump and dump.”

    OK then by your analysis we are about to have a rip snorting rally cuz QE3 a.k.a. Operation Twist is $400 bil where QE2 was $600 bil…

    I disagree with your analysis…QE2 helped inject massive liquidity, Twist is just QE3 fancier….it should do the same…yet…markets don’t seem to agree.

    stick to the charts…they will tell you all you need to know…regardless of what the big boys are saying, thinking, or doing…it’s all right there in the chart.

  20. [...] Friday, we noted that September was the 5th consecutive month the S&P was in the [...]

  21. dead hobo says:

    pintelho Says:
    October 1st, 2011 at 9:29 pm

    OK then by your analysis we are about to have a rip snorting rally cuz QE3 a.k.a. Operation Twist is $400 bil where QE2 was $600 bil…

    reply:
    ———-

    1) Twist involves buying $400B in long term debt and selling $400B in short term debt. No new money is being printed. Thus, it will raise rates in areas where businesses rely on borrowed working capital and lower them in areas where long term debt is required, such as stock buybacks and mortgages. However, regarding mortgages, lowering rates is much like pushing on a string at this point. Twist will not pump te markets and it is not a pump and dump like QE2.

    2) I was describing the concept of arbitrage and the law of unintended consequences when I discussed how ETFs affect oil prices. While ETFs were sold as easy ways to buy the market for small investors, they are actually the tail that wags the dog in that arbitrage prices the related physical securities and commodities. Look up this work in the dictionary.