When Goldman announced it was putting up $2 billion dollars into the sagging Global Equities Opportunity Fund, and an additional $1 billion was being deposited by two influential investors, a story came to mind. It seemed similar to the events told by John Kenneth Galbraith in his book The Great Crash: 1929. He described how, in the face huge selling, several titans of business stood up and showed their confidence in the stock market buy purchasing large amounts of shares of particular stocks. The sell-off stopped for a day or so but soon resumed. Confidence is still the key ingredient in all these markets With the August 15 deadline for 45 day redemption notice on hedge fund withdrawals looming, it is clear that Goldman is sending a message that it wants large investors to trust them.
Looking at the half way back numbers from the April lows to the rally highs this year the numbers look like this; DJI 13162 , lowest close 13181. SP500 spot futures 1500, lowest close 1443. ND spot futures, 1928, lowest close 1929. Of the three indexes, the DJI still has the best relative strength while the broader SP500 is suffering. The range between March and July could be the price area we will see for awhile.
