Hoora! We are Saved! — S&P 500's Best Month Since 1974

Proof that we are still living historical times, the S&P is about to complete it's best month in 37 years while the Dow Transports it's best month since 1939. Isn't that amazing to attend? I sure am marveled by the magnificence of the markets.

We are saved, there's no doubt!

Well. Actually, the rally really started 2-3 weeks ago and markets where already up about 15% without any announcements from the European Lemming leaders. Moreover, the announcements are completely blurry and foggy. Clarifications and details are need. But not by the markets which decided to jump massively.

My point? It's not about being bearish or bullish, it's more about the fact that the markets wanted to rally, and they did. The reason doesn't really matter. What matters is whether you get hammered or not, and whether you manage your trades correctly. And although I did a fair bit of changes in my delta exposure on my options portfolio which avoided a completed disaster, I am not happy with my results. But it was yet again an amazing learning opportunity, and helped me improve the way I should be doing things. That was an expensive training, but no regrets.
Oct. 27 (Bloomberg) -- Stocks surged, extending the biggest monthly rally for the Standard & Poor’s 500 Index since 1974, and the euro strengthened as European leaders agreed to expand a bailout fund to stem the region’s debt crisis. Treasuries sank, while metals and oil led a rally in commodities. 
The S&P 500 jumped 3.4 percent to 1,284.59 at 4 p.m. in New York, sending its October gain to 14 percent and erasing its 2011 loss. The 20 percent monthly advance for the Dow Jones Transportation Average, a proxy for the economy, is the biggest since 1939. 
Benchmark gauges in France, Italy and Germany rose more than 5 percent as German and emerging-market stocks extended gains from this year’s lows to more than 20 percent. The euro surged the most in more than a year and 10-year Treasury note yields rose 17 basis points to 2.38 percent. Equities, commodities and the euro rallied as the European region’s rescue fund was boosted to 1 trillion euros ($1.4 trillion) and investors agreed to a voluntary writedown of 50 percent on Greek debt. 
French President Nicolas Sarkozy spoke with Chinese leader Hu Jintao as Europe sought help in funding the bailout effort. U.S. data showed the world’s largest economy expanded last quarter at the fastest pace in a year, easing concern that the economy may relapse into a recession. 
Europe has done enough for the time being,” Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., said in a telephone interview. His firm oversees $3.3 trillion as the world’s largest asset manager. “It will remove near-term pressure,” he said. “In the U.S., the GDP report was decent and it was encouraging to see the consumer hold. The fear of a recession is fading.”


Tiho said...

I told you that you were going to get killed shorting the Aussie Dollar, but you wouldn't believe me. Now you blaming it all on a phoney EU rescue plan, which we all know sucks.

However, this has nothing to do with "news and noise", but markets. And when everyone thinks alike, they all get killed - in this case perma bears hahahaha!

Don't worry, eventually you will be right, because a downturn has to come. They always do, every 4 to 5 years!

pej said...

Dude, you are interpreting and rephrasing me. I never said the words you put in my mouth.

Whatever you believe, what matters is that you make money. You could be a crazy lunatic like Sprott, if you make money, it doesn't matter. Or a genius like Prechter, but you don't make money, it does matter.

In the end, the bottom line is the only thing that matter.

Tiho said...

I'm surprised you are still staying afloat with all your calls.

pej said...

me too :-)

Tiho said...

Hahahahaha love the honesty. That's better!