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A word on bear markets from our friends at Jurojin Weekly
Jurojin Daily
July 2, 2008
CHART OF THE WEEK
The S&P 500 is in official bear market territory. Over the past 40-years US stocks have experienced seven bear markets. Here are some commonly agreed upon definitions:
“A prolonged period in which investment prices fall, accompanied by widespread pessimism.”
“Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.”
“A price decline of 20% or more over at least a two-month period.”
Including intraday market highs and lows, the S&P 500 was by definition in a bear market as of March 17th of this year, breaching the -20% mark. With the market low of 1260 on yesterday, again the broad market benchmark was positioned 20% off its October 2007 highs.
DAILY ACTIVITY:
There was no actionable activity in the portfolio today. Please note most markets will close by 12:00P.M. tomorrow (July 4th) and all U.S. markets will be closed on Friday in observance of Independence Day.
Hold: October 2008 Sugar 15.00 calls (SBV8C15.00) @ 84 ($940.80) No Stop. Profit targets PT1=120 ($403.20); PT2=161 ($862.40) Sugar is technically breaking out and talk of the increasing demand and decreasing stocks have commodity funds taking new long positions. This option settled at 0.67. Hold
Hold: December Euro$ futures 97.50 call options (EDZ8 C97.50) @ 18.5 (Initial premium): $462.50 per contract) Stop: 0.0350 ticks (loss: $375 per contract) Profit-target: PT1=48.5 ticks ($750) This option was inactive today and settled at 0.0775. Hold
Hold: August 2008 Live Cattle (LCQ8) @ 103.85 (Initial margin: $1,080) Stop: 100.450 (Loss: $1360 per contract) Profit-targets: PT1=107.25($1360) PT2=108.95 ($2040) Live cattle closed 67.5 ticks higher today. Support came from higher cash values as well a weak U.S. Dollar. August Cattle settled at 104.00. Hold
Hold: September 2008 Crude Oil 110 puts (CLU8P110) @ market No Stop: (Loss $1100 per contract) Profit-target: PT1=220 ($1100) This option lost 2 ticks today as Crude Oil rallied on lower inventory numbers. This option last traded at 0.65. Hold
Hold: Jan 2009 Orange Juice future (OJF9) @ 132.10 Initial margin: $1,890 Stop: 128.80 (loss: $495.00 per contract) Profit-targets: PT1=142.10 ($1500.00) Profit taking set on the Juice market today as its rallied to a 4 month high. Lots of talk of Citrus greening in Louisiana as well as California. This should prove to be supportive. January Juice settled last traded at 135.05. Hold
Stay Short: September Japanese yen (JYU8) @ 95.13 (Initial margin $3,375) Stop: 96.13 ($1,250 per contract) PT1: 93.63 ($1,875); PT2 93.13 ($2,500) The Yen sold off in early trade but then bounced back as the market tested the 200 day moving average and it held. The September Yen is currently trading unchanged on the day at 0.9472. Hold
UPDATED POSITIONS
Meet KEVIN KERR,
a member of the
Supreme Council of the Secret Order of Jurojin
in the Investment Cafe at FreedomFest
(July 10-12) in Las Vegas,
where the world’s great thinkers come together to talk, strategize, and socialize.
