What to Make of the Recent “Whipsaw” in Market Leaders
It’s been just over two weeks since that wild Monday when the yen carry trade “broke” and forced a bunch of overleveraged hedge funds to liquidate just about everything they owned. If you recall, contagion from that trade’s unwinding caused a wave of panic selling in the stock market. As of the close of August 5, more than 12 stocks trading on the New York Stock Exchange were lower on the day for every one stock that had edged higher — though intraday, the ratio of bearish-to-bullish stocks was closer to 25-to-1.
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