The market continues to be under pressure; the SP500 closed down 2.57%, -8.5% for the year and down 11.6% since its high on 7/20/15. The biotech sector (XBI) which at one point was the best performing sector (+45%) for the year is now down year to date and in full liquidation mode.
We also saw a spike in stocks down 4% or more for the day, spikes have led to short-term bounces, you have to very careful leaning short after big sell-offs.
But, the big news of the day was and is Carl Icahn’s market comment in which he warns of a potential looming catastrophe. Carl said he’s “more hedged now than I’ve been in years. That comment will be followed by a video titled “Danger Ahead” that will be released tonight at midnight. What’s interesting is that Carl just took an 8.5% stake in FCX, bought more of his biggest losers CVR, CHK, and RIG. The bearish bloggers are going to have a field day with what Icahn said today, (“billionaire investor is more bearish than he was in 2008 when the market plunged 50%”). Whatever. In 2011, Ichan gave his clients all their money back because he was also concern about a big correction. “Given the rapid market run-up over the past two years and our ongoing concerns about economic outlook, and recent political tensions in the Middle East, I do not wish to be responsible to limited partners through another possible market crisis.”
Like everyone else, Carl is going to get some right, and he will get some wrong. Fine-tuning your entire portfolio based on his comments, definitely wrong.