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« A Useful Trading Tip from the World of Futures and Options | Main | Cherry Picking in Data Analysis »

July 01, 2007



Bill -

Thanks for this helpful analysis, showing the diverse effects in the market.

Regular readers know that we think there is plenty of fear reflected in current market prices.


Bill aka NO DooDahs!

On another thread, someone remarked that equity markets seemed unfazed by the subprime situation, and that reality would soon set in. My response was that equity markets HAVE reacted to it. Response is localized.

From 6/1 to 6/29:
Cons. Cyclicals - Homebuilders, XHB, -13.8%
Financials - Real Estate, IYR, -9.7%
Financials - Banking, KBE, -5.6%
Financials - Brokers, IAI, -4.8%
Financials - Capital Markets, KCE, -4.6%

SPY in that timeframe, -2.5%.

Others in the same timeframe had gains:

Industrials - Aerospace and Defence, PPA, 0.5%
Industrials - Environmental Services, EVX, 0.8%
Telecom - Wireless, WMH, 1.2%
Technology - Electronics, PHW, 2.1%
Technology - Networking, IGN, 2.4%
Technology - Semiconductors, SMH, 2.9%
Energy - Oil Services, OIH, 3.0%
Energy - Clean, PBW, 3.1%
Energy - Oil Equipment and Services, IEZ, 3.4%

The index is not monolithic.



thanks for stopping and pointing us to this discussion. You seem to have a good sense of what is happening -- as you often do.


Bill a.k.a. NO DooDahs

You might enjoy my comment at Mike's place.

"...aside from a few companies and funds, and spillover into the sector’s stock prices, this is a non-event. Quote me on it, and see if the market doesn’t recover quite nicely everywhere else (and in aggregate indices as well)."

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