Thread: F Fund's inverse relationship to C Fund

JTH,
I've been noticing the F-Fund is behaving oddly as well.
I have a theory, but need someone with more background/knowledge to respond whether there's anything to it !

So here goes: First I noticed it all began/coincided almost to the day, that Fannie & Freddie announed trouble, were bailed out, and passage of Act to further "bail out" "endangered entities."
I believe it was T-Bonds that were used to enable the "bail-outs". I'm guessing that this somehow damaged our T-Bond holdings, weakened them - and/or is somehow is causing the Bonds/F-Fund to behave so strangely.

Appreciate anyone knowledgeable to weigh-in, because the F-Fund's strange behavior is keeping me away from it - and suggest others be wary also, until we can understand exactly what's going on with it!
VR

Originally Posted by hessian

JTH,
I've been noticing the F-Fund is behaving oddly as well. I have a theory, but need someone with more background/knowledge to respond whether there's anything to it !

So here goes: First I noticed it all began/coincided almost to the day that Fannie & Freddie announed trouble, were bailed out, and passage of Act to "bail out" these entities. I believe it was T-Bonds that were used as the collateral to do this. I'm guessing that this baillout somehow damaged our T-Bond holdings, weakened them - and/or is somehow is causing the Bonds/F-Fund to behave so strangely.

Appreciate anyone knowledgeable to weigh-in, because this strange behavior if keeping me away from the F-Fund also, until we find out more what's going on!
VR

I saw something simular and speculated that maybe g is better than f. I thought it was due to stagflation but maybe it's due to the gov insuring the future of our finances to the bonds. This seems very dangerous.

I went back 100 trading days and got simular results. I'm not an excel guy, otherwise I'd do some cool math stuff and crank out some real results.

Originally Posted by JTH

As we know, the F fund often trends inversely to the C fund but how often?

I've had success in the past using a gaining day in the F fund to dip buy into the C fund, but it seems lately the two funds have been trending together more often.


I'm not sure if this is the case, but I took a sample of the last 2 months or 41 trading days.

68% (28 days) the two funds traded inversely to each other.
32% (13 days) the two funds traded in the same direction.
20% (8 days) both funds were up
12% (5 days) both funds were down.

Does anyone know of a good way to forecast when the two funds will trend together?

Interesting Stuff JTH, after reading your post I took a look at the
AGG vs SPX for the last two days. Why? Because I noticed earlier
that the AGG,SPX,DWCPF and EFA were all negative at the same
time. This held true on Friday as well. Its rare to see those items
all negative on any given day. So I was wondering, could you do
the same type of analysis on the above mentioned so we can see
the simularities or differences the results might bring?

Originally Posted by squalebear

So I was wondering, could you do
the same type of analysis on the above mentioned so we can see
the simularities or differences the results might bring?

I noticed the same thing. I wanted to add the S and I to the mix, but I couldn't find historical data on S. I looked at Yahoo and Google and the results came up dry.

I may try something along those lines if time permits, but it's a slow process because I was hand jamming this stuff. That's why I wish I was an Excel guru. I so admire those who can manipulate data using excel.

Originally Posted by JTH

I noticed the same thing. I wanted to add the S and I to the mix, but I couldn't find historical data on S. I looked at Yahoo and Google and the results came up dry.

I may try something along those lines if time permits, but it's a slow process because I was hand jamming this stuff. That's why I wish I was an Excel guru. I so admire those who can manipulate data using excel.

I'm no Guru, But maybe I can help. I'll see what I can do !

Thanks, I'm trying to find the closing prices for $EMW, no luck so far.

AGG vs SPX
June 8th Thru August 4th, 2008 (40 days)

70% (28 days) the two funds traded inversely to each other.
30% (12 days) the two funds traded in the same direction.
20% (8 days) both funds were up
12.5% (5 days) both funds were down.

----------------------------------------------------------------------------------------
(I) FUND vs (C) FUND
68% (28 days) the two funds traded inversely to each other.
32% (13 days) the two funds traded in the same direction.
20% (8 days) both funds were up
12% (5 days) both funds were down.

Originally Posted by JTH

Thanks, I'm trying to find the closing prices for $EMW, no luck so far.

http://stockcharts.com/h-sc/ui?s=$em...7382629&r=2697

Oooops,,,,you mean daily prices,,,,gotcha ya

Suggestion (if all else fails) !

Click on the link I gave you below.
Under the chart change the "Range" drop menu to the specific date you need.
Start Date and End Date being the same date you desire. You'll get the closing
price just above the chart.

I looked at the last 200 days of trading and even broke it down to the last 50, 100, 150, and 200 trading days.

It was interesting how the number of F & C inverse days were the exact same on the last 50, 51-100, and 101-150 days.

Overall there were 140 inverse trading days 70%
28 days traded down together 14%
32 days traded up together 16%

Of the 28 days when both funds are down, 46% of the time both funds traded down the next day.

Of the 32 days when both funds are up, 56.25% F was up the next day and 43.75% C was up the next day.

I found it interesting there were 5 times when both funds traded up 2 days in a row, yet not once did they trade down together more then one day in a row.

If the trend holds true, then both funds will not be down tomorrow...