Wednesday, October 5, 2011

It is Halloween yet for Wall Street? Paranormal occurrances in stock markets do exist!

In one of the strangest and illogical occurrances taking place on Wall Street over the past few days, massive selling in Mutual Fund holdings has been countered by an INCREASE of the Dow by more than 250 points.

How is this possible?  Mutual Funds arent selling stocks, even though the equity markets are bracing for a huge bear market fall.

Because these same mutual funds, despite having record low cash holdings, continue to refuse to sell their stock holdings and replenish cash. The only reason we can attribute to this is that slow money managers keep hoping Bernanke will pull something out of his sleeve and create another Hail Mary market rush into year end, saving quite a few P&Ls, not to mention careers. Alas, with stocks where they are it is increasingly looking like Operation Twist may be the only thing they will get for 2011 - Bernanke needs the S&P in triple digits to have a strong case for a $1-2 trillion LSAP. As such funds find themselves in no man's land, where they will be redeemed at the end of the year unless stocks soar for whatever reason, but will refuse to sell before they absolutely have to, which will be end of December, or whenever the Nash equilibrium fails. - Zerohedge
Maybe... we now have a strong reason for the massive selling taking place in gold and silver.  Dump the profitable stocks to accumulate cash as a buffer to stave off mutual fund holders until Uncle Ben swoops in with QE infinity.


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