XJO 0.11% 6,057.7 s&p/asx 200

very interesting from sp floor broker

  1. 581 Posts.
    Food for thought in front of FOMC/month end Re-balancing (T + 3 Securities rule) and our still risk averse Equity environment psychology:

    Traders talking about research that suggest "US balanced funds may have to make some of the largest month-end re-allocations of assets since the end of Oct 1987. Talk is that the wild swings in both bond and stock markets have left the average balance fund of 60% equities and 40% bonds set for a 4.1% re-balancing out of bonds and into equities after the recent volatility. The talk is, the last time the re-balancing approached these levels was back in Oct 87 in the wake of the Crash, and then it helped provide a much needed footing and put a floor under what proved to be the market low. In Oct 87, the last 4 days of the month saw stocks surge over 10% while bonds were lower".

    If any footprint is to be seen, or market impact to be had, conventional wisdom would suggest that since the forced hedge fund de-leveraging/liquidation has for the most part, globally occurred.
 
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