Prognightmare said:

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That was institutional buying that skyrocketed the markets in the last 10 mins.

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you'll want to see that chart on April 2

Prognightmare said:

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That was institutional buying that skyrocketed the markets in the last 10 mins.

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To add to my prior post right before this. Add in the explosion of derivatives.

How much is the market effected by things like huge short positions that then have to be corrected? Are those type of trades impacting the appearance the people/institutions are buying because we think they "want to" or "have to"?

Every knee shall bow and every tongue shall confess

OverSeas AG said:

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I wonder if they (IIs) were actively making decisions or if they were rebalancing ETFs and/or MFs? I think it is too late in the month to rebalance most ETFs. I would have thought they did that at the beginning of the month. However, maybe they do it month-end it to be ready for the beginning of the month.

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How does rebalancing work? I get the bonds to stocks. How the heck does selling some and buying others with the same dollars change it by that much? I hear hedge fund managers say it but never understood how.

Maybe more to do when buying stocks or industry etfs so selling winners and buying into losers while they're low

I am not positive, but it looked like we had a 90% up day. Seems like the math wouldn't work for that.

I rebalance monthly into different funds using a risk-parity calculation. I usually just do it on the first trading day of the month, but since so many other people are on monthly cycles, it might be better for me to do it towards the end.

HustlerAggie said:

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I rebalance monthly into different funds using a risk-parity calculation. I usually just do it on the first trading day of the month, but since so many other people are on monthly cycles, it might be better for me to do it towards the end.

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I'm getting towards the discipline that you have and have been wondering the most logical or best time to do so. I'm wondering about the 1st or 3rd week of every month due to the automatic contributions for people's 401k/TSP taking place on the 15th and 31st of each month ususally.

Harkrider 93 said:

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OverSeas AG said:

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I wonder if they (IIs) were actively making decisions or if they were rebalancing ETFs and/or MFs? I think it is too late in the month to rebalance most ETFs. I would have thought they did that at the beginning of the month. However, maybe they do it month-end it to be ready for the beginning of the month.

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How does rebalancing work? I get the bonds to stocks. How the heck does selling some and buying others with the same dollars change it by that much? I hear hedge fund managers say it but never understood how.

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Let's say you are a 60/40 equity to fixed income investor. After a significant stock market drop you are maybe 50/50. So when the market recovers it takes you longer to get back to even. If you sell enough bonds, (which has presumably gone up in value or at least not lost as much as stocks) to get back to 60% stock, when the inevitable recovery happens, you have more stock that is getting the recovery. That's why you want to rebalance.

Monywolf said:

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Harkrider 93 said:

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OverSeas AG said:

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I wonder if they (IIs) were actively making decisions or if they were rebalancing ETFs and/or MFs? I think it is too late in the month to rebalance most ETFs. I would have thought they did that at the beginning of the month. However, maybe they do it month-end it to be ready for the beginning of the month.

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How does rebalancing work? I get the bonds to stocks. How the heck does selling some and buying others with the same dollars change it by that much? I hear hedge fund managers say it but never understood how.

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Let's say you are a 60/40 equity to fixed income investor. After a significant stock market drop you are maybe 50/50. So when the market recovers it takes you longer to get back to even. If you sell enough bonds, (which has presumably gone up in value or at least not lost as much as stocks) to get back to 60% stock, when the inevitable recovery happens, you have more stock that is getting the recovery. That's why you want to rebalance.

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I think he understands that. In fact I know he does.

He's asking about hedge funds specifically

Monywolf said:

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Harkrider 93 said:

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OverSeas AG said:

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I wonder if they (IIs) were actively making decisions or if they were rebalancing ETFs and/or MFs? I think it is too late in the month to rebalance most ETFs. I would have thought they did that at the beginning of the month. However, maybe they do it month-end it to be ready for the beginning of the month.

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How does rebalancing work? I get the bonds to stocks. How the heck does selling some and buying others with the same dollars change it by that much? I hear hedge fund managers say it but never understood how.

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Let's say you are a 60/40 equity to fixed income investor. After a significant stock market drop you are maybe 50/50. So when the market recovers it takes you longer to get back to even. If you sell enough bonds, (which has presumably gone up in value or at least not lost as much as stocks) to get back to 60% stock, when the inevitable recovery happens, you have more stock that is getting the recovery. That's why you want to rebalance.

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And to take it one step further, say within your equity side you have different exposures to Large cap, Mid cap, Small cap, International, Real Estate, etc..... so when those get out of balance you sell whatever is overexposed "sell high" and purchase whatever is underexposed "buy low"

Monywolf said:

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Harkrider 93 said:

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OverSeas AG said:

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I wonder if they (IIs) were actively making decisions or if they were rebalancing ETFs and/or MFs? I think it is too late in the month to rebalance most ETFs. I would have thought they did that at the beginning of the month. However, maybe they do it month-end it to be ready for the beginning of the month.

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How does rebalancing work? I get the bonds to stocks. How the heck does selling some and buying others with the same dollars change it by that much? I hear hedge fund managers say it but never understood how.

---

Let's say you are a 60/40 equity to fixed income investor. After a significant stock market drop you are maybe 50/50. So when the market recovers it takes you longer to get back to even. If you sell enough bonds, (which has presumably gone up in value or at least not lost as much as stocks) to get back to 60% stock, when the inevitable recovery happens, you have more stock that is getting the recovery. That's why you want to rebalance.

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Does a robo account automatically re-balance in this scenario?

That makes more sense, but if almost all is up at highs for the day and with large volume, I don't see how it would work.

barnyard1996 said:

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Monywolf said:

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Harkrider 93 said:

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OverSeas AG said:

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II wonder if they (IIs) were actively making decisions or if they were rebalancing ETFs and/or MFs? I think it is too late in the month to rebalance most ETFs. I would have thought they did that at the beginning of the month. However, maybe they do it month-end it to be ready for the beginning of the month.

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How does rebalancing work? I get the bonds to stocks. How the heck does selling some and buying others with the same dollars change it by that much? I hear hedge fund managers say it but never understood how.

---

Let's say you are a 60/40 equity to fixed income investor. After a significant stock market drop you are maybe 50/50. So when the market recovers it takes you longer to get back to even. If you sell enough bonds, (which has presumably gone up in value or at least not lost as much as stocks) to get back to 60% stock, when the inevitable recovery happens, you have more stock that is getting the recovery. That's why you want to rebalance.

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Does a robo account automatically re-balance in this scenario?

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It likely does. It would be interesting to see if bonds and stocks were both up. If they were, and it is likely, I don't see how rebalancing caused the market to go up today, Maybe they mean on normal days.

TLT 3/27 168.5C had a lot of action today.

From a personal standpoint whether you're 60/40 or 90/10 (equity/fixed income) is all about risk tolerance. And rebalancing allows you to capture gains/profits and reinvest in those losing to help you stay within your risk tolerance. So you're not taking on more risk than you want or less.

That's from a personal planning standpoint, you may be asking more towards the large institutional investors selling of millions of positions because they're becoming over exposed to a certain company or sector than is within their investment guidelines. I honestly don't really know how that works..

ETA - yes if you're asking about market movement. Robo advisors rebalancing personal IRA's is not going to move the needle. They were referring potentially to the hundreds of millions moving out of certain places (again that's beyond my education)

There is a lot of discussion about pension funds rebalancing prior to the end of the month. They would need to purchase a large amount of equity, contributing to the gains today and maybe tomorrow.

Got some TLT 4/3 170s in the 60s today. Almost 20k volume on those.

jj9000 said:

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Welcome to the new Bull Market, boys.

Enjoy the next 11 years of month over month new highs.

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Lol as futures are nice and red right now

BOOM

FAT SEXY said:

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Is MRO a safe long play at this point? I guess there are no safe plays in stocks, but I'll ask anyways. It's at the lowest stock price in over 5 years.. It's been hovering at the same level since the March 6th nosedive.

Think it'll dip a little further?

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I got in today at 3.80 so fingers crossed.

I wouldn't long play any O&G now, except maybe refineries. Sure many will survive and eventually the price of oil will go up, but I bet it won't keep up with the rest of the S&P.

Horrible oil busts have always followed oil booms. It always got ugly - companies go out of business and the survivors merge together out of necessity. We're not there yet, but I bet that's where this is going.

Obviously I could be 100% wrong.

It seemed like the laggards led the rally past 2 days.
Has to be a trap.

Pioneer's CEO said on CNBC today that OVV and MRO aren't cooperating to try and cut back U.S. production because they'll go bankrupt if they do. Sheffield obviously has his own motives so TIFWIW. I'm no expert.

This is a fun thread to watch. The stress and angst of it all. Such drama!

Every knee shall bow and every tongue shall confess

Since I've started dabbling in this I've held a couple o&g stocks but the only one I have now is XOM. A lot of uncertainty out there for the little guys right now

Edward Jones managed accounts rebalanced portfolios over the last two days, there's around 500 billion invested amongst them. Obviously all the rebalancing was bond to equity.