Was Tuesday's FOMC equity rally for real? Or should we take Wednesday's pullback as the real trend in the stock market?
A check in with the smart funds show that they are still more defensive than the consensus. Smart funds are showing a market beta that is lower than 1, or the market. By contrast the consensus funds' beta is at or slightly above 1.
There are very good technical reasons why this market should rally. It is extremely oversold and due for a bounce. However, smart funds don't seem to be convinced yet that this is THE BOTTOM. By this measure, rallies should be viewed as trading opportunities to sell into strength.
Welcome to my blog Humble Student of the Markets. These are my observations and musings about the markets (mostly equities), hedge funds and investments in general.My experience has been a quantitative equity manager in US, Canada, EAFE and Emerging Markets and commentator on hedge funds and their returns patterns.
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