Monday 23 August 2010

A quiet August - quiet before the storm?

The market has no volume this year. That this is a real phenomena and not just speculation you can see in the results of the LSE and other traders who all report very weak volumes.

Where has the money gone? Well undoubtedly some has gone into bonds, also some has come out of Hedge Funds and Prop Desks and gone into Gold and commodities, plus potentially out of UK and global markets into more exotic stuff - the art market is in a bubble like boom.

But a lot is sitting on the sidelines, waiting to see whether the recession returns or whether things muddle through.

Certainly the FTSE100 is following this path this year, picking up when the Tories were doing well and economic news turning good, but selling off afterwards through lack of faith.

Now in September and October we will have an answer I feel. The markets are more volatile than ever for numerous reasons, the low volume being one of them. Investing is now more correlated than ever to the overall performance of markets rather than individual stocks, so direction is key.

My guess is up from here, but don't bet on it.


Steven_L said...

I reckon up too, went long on BP this morning at 385p.

BrianSJ said...

Yes up because the sheep can be fleeced one more time before the big crash. I hope Steven_L has stops in place.

Steven_L said...

At 359p, it's only a small spread bet, we're talking £1,500 notional.

Lighten up Brian, it's just a bit of fun :)

Mark Wadsworth said...

"A quite August"?


CityUnslicker said...

MW - urgh.

Demetrius said...

It's a bit like playing bridge only with a deck full of jokers.

JMS301 said...

My money is defo on down. Well my money is under the mattress but you get the idea ;)

Anonymous said...

This is the problem with Stagflation. Do you worry about the Stag (where will corporate profits come from?) - or the flation (will fixed interest bond holders feel their capital shrinking away?).

I am just buying companies that provide things people use (Power generation, mobile networks) or make stuff people need (food etc.) The game is not to get rich - it is about floating or sinking. Money under mattresses gets lost when the flood washes away your bed.

I hate the international rentier class with their billions of unearned cash sloshing around the system.