Don't Worry, Be Happy

Yet another day when caution did not pay. Maybe when I finally get the hang of it the market will finally correct. It feels like people are shutting down for the year as stocks are trading well below average volume.

For those focused on seasonality the strongest days are between Christmas and New Years, so there is some room in the next couple of days for a down day. We might even see a dodo bird. Have a good night.


Anonymous said...

Just wondering where you got that bit of info? I always figured the last couple of trading days are usually lower due to tax selling? Y/N?

Then a bounce higher in the New Year.

Tsachy Mishal said... Its a paid site.

Anonymous said...

I was a little surprised we didn't here more about muni's today. I guess people do ignore it until it's at their doorstep.

From Dave Fry..the

There have been only a scattering of stories regarding negative conditions in the muni bond market; but, finally with the collapse in prices news of troubles are now taking on tsunami conditions. Meredith Whitney brought this story out a few weeks ago and did so again on 60 Minutes while governors like NJ Governor Chris Christie also discuss the same problem. I know something about this since cutting my teeth as muni-bond salesman and trader during NYC's problems in the mid-1970s. The crux of the matter revolves around unrealistic pension benefits for public employee unions. Greece comes to Sacramento?

I haven't seen the VIX this low since the spring just before the previous sell-off. A warning? It could be as complacency is high and volume remains low.

The muni market troubles are like a lot of problems out there that drip on us from afar until they are presented front and center. It's no different than euro zone issues that bob to surface now and again. As mentioned I was a muni bond salesman and trader in the mid-70s when the NYC bond contagion rippled throughout the northeast. Each day I'd come to the office and NYC Mayor Abe Beame would be facing a crisis with budgets and public employee union demands. I remember one day coming owning a large lot of NYC general obligation bonds with 3 year maturities yielding 25%. That was unusual but many bonds traded with yields in the teens for a few years. Then Carter came in and bailed the city out and a deeper crisis was put off once again. But now the contagion of public employee benefits has spread to all states. So the problem is larger than ever.