{"id":524822,"date":"2010-04-12T12:23:00","date_gmt":"2010-04-12T16:23:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/net-speculator-positions-predict-a-20-collapse-in-the-nasdaq-2010-4"},"modified":"2010-04-12T12:23:00","modified_gmt":"2010-04-12T16:23:00","slug":"speculators-predict-a-20-collapse-in-the-nasdaq","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/524822","title":{"rendered":"Speculators Predict A 20% Collapse In The NASDAQ"},"content":{"rendered":"

Here’s a quick view of where speculation is huge right now, based on data we pulled from Morgan Stanley<\/a>.<\/p>\n

Net speculative positions (as a % of open interest) are more than two standard deviations above the mean for oil and the Nasdaq, as shown below. Copper has substantial speculator activity as well.<\/p>\n

\"Chart\"<\/p>\n

Moreover, Morgan Stanley has done a back-test to give the most recent data perspective, and this is where it gets most interesting.<\/p>\n

As shown below in the top section of the table, the average six-month performance for the Nasdaq under similar speculative conditions as today<\/strong> (with speculator open interest over 2 standard deviations, ‘>2SD’) has been a horrendous -20.7%.<\/strong><\/p>\n

Looking at the bottom section of their back-test table, the Nasdaq has never risen over the next six months (0 hit observations) after having such speculator activity as we have today.<\/strong> To get further and important detail on this back-test, such as the exact time period covered and the number of observations used, you’ll have to chase up Morgan Stanley.<\/p>\n

It’s also just a back-test, it’s not gospel and the future can be far different than the past. Also note we’re not describing a specific Morgan Stanley market call right now.<\/strong> But we still can’t ignore how bad this looks, below. If the Nasdaq ends up doing well over the next six months, it will be a historic rally given current speculator activity:<\/p>\n

\"Chart\"<\/p>\n

\"Chart\"<\/p>\n

(Via Morgan Stanley, 12 April 2010)<\/em><\/p>\n

Join the conversation about this story »<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s a quick view of where speculation is huge right now, based on data we pulled from Morgan Stanley. Net speculative positions (as a % of open interest) are more than two standard deviations above the mean for oil and the Nasdaq, as shown below. Copper has substantial speculator activity as well. Moreover, Morgan Stanley […]<\/p>\n","protected":false},"author":6205,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-524822","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/524822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/6205"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=524822"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/524822\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=524822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=524822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=524822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}