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10 Year, 2s10s Both Suggest Manic-Depressive Stocks 70 Points Too Rich

Tyler Durden's picture




 

There was a time when stocks, bonds, gold, dollar, oil, correlations, and pretty much anything that isn't nailed down, going up concurrently would make at least some market participants frown. Not so much any more - with the average "trader" an 18 year old pustular math whiz-kid with the personality of a paper clip and a Ph.D. from a prestigious institution to boot, with no idea of just the level of death and destruction their "sentient", "self-aware" and "learning" programs are about bring to the market, nobody cares about that little thing called logic. Yet going off that, and basing observations on the last rational market indicator, i.e. bonds, it appears stocks continue to be about 70 points rich and have a fair value around 1,020 as implied by 10 Year Yields. As the deranged schizophrenic computer algos were blowing threw vacuum tubes like Ukranian hookers go through crack on any given Hamptons weekend, they totally forgot to bring bond yields higher for validation. Which is why the stocks-bonds (10 Year) convergence is now more pronounced than ever. Sell stocks, Sell bonds (Long Yields) and wait for the big Mahwah collocation facility black out that will eliminate 80% of binary market participants that will allow the spread to close.

And another validation comes from the 2s10s, which is essentially a replic of the 2s10s as the 2s has no more place to tighten.

 

 

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Tue, 07/20/2010 - 16:34 | 479610 Cognitive Dissonance
Cognitive Dissonance's picture

"10 Year, 2s10s Both Suggest Manic-Depressive Stocks 70 Points Too Rich"

Don't hate the stocks Tyler, hate the HFT computers. No one else seems to be trading those manic-depressive stocks that I know of.

Tue, 07/20/2010 - 16:39 | 479624 Pamela Anderson
Pamela Anderson's picture

Yes... there is someone else...

http://img249.imageshack.us/img249/9844/ready2r.jpg

Tue, 07/20/2010 - 21:15 | 480108 suckapump
suckapump's picture

HAH! Love it!

Tue, 07/20/2010 - 16:41 | 479616 carbonmutant
carbonmutant's picture

Well Apple beat the numbers and analysts are projecting share price of over $300

Looks like the ES will break 1190 tomorrow.

Tue, 07/20/2010 - 16:43 | 479639 jkruffin
jkruffin's picture

DOW 11k tomorrow for sure. Retail investors to get sucked in.

Tue, 07/20/2010 - 17:15 | 479723 DMA Trader
DMA Trader's picture

sure. :))) 

from 80 to 120 to 160 to 200 investors got sucked in. 

imagine that.  

but real traders who keep shorting this market from 800 to 1200 are the profesionsts right ?

 

Tue, 07/20/2010 - 21:13 | 480107 francis_sawyer
francis_sawyer's picture

10yy bitchez!

Tue, 07/20/2010 - 16:37 | 479617 Jim in MN
Jim in MN's picture

If we were to believe in PPT talk balloons, we might imagine something like:

"Must...keep...SPX 200 DMA....from....inflecting.....gasp....huff...."

Been riding that razor ridge for a while now, no downturn yet.  Flat, or still rising an eeeeeensy bit.

Tue, 07/20/2010 - 17:18 | 479728 DMA Trader
DMA Trader's picture

PPT is for lazy traders who can't be responsable for their trades. 

So they just find something to blame. wife, family, governament, obama, bernanke, 

roubini, taleb, PPT and the list goes on and on .. forever .... 

never take responsability always find sombody to blame. 

no it's low volume, no it was bernanke, oh no it was PPT

lol

Tue, 07/20/2010 - 20:34 | 480068 Cognitive Dissonance
Cognitive Dissonance's picture

It's interesting when DMA Trader comes out to play on ZH. About every two weeks, give or take. I guess that's when mommy let's him on the computer. :>)

"Now play nice DMA" mommy warns.

Tue, 07/20/2010 - 21:44 | 480150 John McCloy
John McCloy's picture

Amazing and congrats one being the one trader to predict that:
* The Fed would keep interest rates at 0% for 8 years
* That Enron like account fraud would become mandate with mark to market suspension would become mandate
* That an unconstitutional quasi private bank would be permitted to make not so veiled threats in relation to Fed Audits and money printing.
* Knowing financial reform after destroying 12 Trillion in global assets would be a dog and pony
* That Geithner and Bernanke would be implicated and determined to have undeniably said to not interfere with AIG paying 100 cents on the dollar of hardworking Americans money
* On knowing the finreg would be written by lobbyists through proxy chess pieces Dodd, Frank, Gregg and Schumer.
* Congrats on knowing that Banks would pay obscene unearned bonuses when they have Billions in writedowns while the rest of the nation is in a depression of their and the Feds
doing. In sure the family dining on Capt. Crunch appreciates it tonight
* On purchasing assets worth 30 cents on the dollar with taxpayeroney and debt under the thesis of "Stability"
* On knowing not a single individual from GS to Countywide would see an indictment.
* On punishing American citizens devestated by recession/Depression who need to learn to save for the first tome in their lives with no money market and savings interest.
* On knowing the promise of a job around the corner to the terminally unemployed who have seen their 401ks raped for people like JohnThains benefit was a ruse and that they should be content with their fractional " Do not riot subsidy"
* Knowing the CEOs of a large retail bank such as BAC would have their CEO threatens with removal if he did not sacrifice customer cash to buy Merrill at a premium.
* That Mr. " Anti bank bailout" the President himself would burn up the lines all night to coherce Merkel to relent to a bailout and more middle class rape.
* Thank you for knowing that the Fed would crash markets on May 6th to influenece and move political legislation because a Fed audit and Brown / Kaufman were up for amendment vote. You know since they are independent an such.

You are a true patriot of America DMA. I congratulate you on your greed and your self serving attitude and morality so that you could feel like a succesful and prosperous trader wiling to allow the suffering to subsidize your ego. Remember this when you and all the other Super bulls have lost their will to live an breath since they are more concerned with the roving gangs of unemployed not raiing their homes of property because of you have ever read a page of history you will know this is unsustainable anf when the darkness comes And you can quote me, " The stock market will be the least of Anyones concerns since the civilty we enjoy currently is entelirely reliant upon the Neanderthals having food in their belly, women in the bed or on the computer screen and they are not keen on effete mother fuckers like yourself"

Everything you believe is permament is contingent on the complacency of the middle class. There are no jobs. There is no money and now the elites have thrown down the gauntlet and said " their are no rules".
Well nobody enjoys having no rules more than the middle and lower class and once that door is open it remains until their is appeasement.
Ask Benito, ask Marie and ask Napoleon.Tyranny is unsustainable and if you want to profit of economcial tyranny well that sir let me be the first to say,• one day something terrible will be happening to your way of life and what comfort you previously knew will be gone and you will recall this moment"
Because you deserved it because you wished to profit off the defrauding if Americans who actually work and prouduce daily and to make an honest living you coward. Remember this. They will need to rewrite the economic text and history books for what is about to occur.

Tue, 07/20/2010 - 16:38 | 479622 jkruffin
jkruffin's picture

Well, there is one scenario not being mentioned, and that is the distortion of the yields on the treasuries.  They are too low, and that is a direct result of Bernanke's involvement in the auctions buying up everything with printed money to keep rates down.  If Bernanke was not so deep in the auctions, I am sure the rates would have gone way up from where they are based on the debt load.

Tue, 07/20/2010 - 16:55 | 479675 freshman
freshman's picture

yes, but nothing suggests that Bernanke is NOT buying equities (probably secretly through PDs that he controls)

Tue, 07/20/2010 - 16:44 | 479623 TooBearish
TooBearish's picture

Apple nation...banks make no loans, even to each other, they just buy treasuries....every day....

Tue, 07/20/2010 - 16:39 | 479627 rubearish10
rubearish10's picture

Another well execute master plan by TPTB; stimulate banks ala/BB and rider the AppleWare sleigh to Neverland! WTF!!!!

Tue, 07/20/2010 - 17:20 | 479736 DMA Trader
DMA Trader's picture

of course. 

it can't be you not folowing the markets. 

not using, Stop loss, or using full leverage. 

 

it has to be the PPT team coming to kill inocent traders. 

yuppi

Tue, 07/20/2010 - 20:34 | 480066 -1Delta
-1Delta's picture

Regardless of your fundamental belief of the PPT, i totally agree.

If the market  is going to trend higher (regardless of the data), f*** get our of your shorts....

be responsible for yourself... as for the PPT- they can go to keysian hell

 

 

Tue, 07/20/2010 - 16:39 | 479629 jkruffin
jkruffin's picture

They got P.H. D's?   From St. Mary's Online College for Underwater Basket Weaving?  LOL

Tue, 07/20/2010 - 16:40 | 479632 HarryWanger
HarryWanger's picture

Come on now - all is good. Apple beat, projecting to take over the world next Q. As goes Apple so goes the market.

Tue, 07/20/2010 - 16:58 | 479684 freshman
freshman's picture

Very soon, Apple will exceed the 24% threshold in the NDX weighting scheme and be "downweighed" which will lead to massive adjustments from all the so called "index funds". Target for Apple: below $100. It falls fast when the season turns.

Tue, 07/20/2010 - 16:41 | 479633 No Mas
No Mas's picture

Overpriced?  Well check out the after hours.  Apple blows them away.  There is no end to the money people will spend on their products.  What a joke; if you think equities overpriced now, just wait until next week.  You have to admit it now; CNBC was right and ZH very, very wrong!

You bears are always wrong, but go ahead and dig that hole in your back yard, eat bread, drink water and masturbate onto your gold bars.

The rest of will gladly take the money and run.

Tue, 07/20/2010 - 16:50 | 479657 hambone
hambone's picture

I prefer to masterbate w/ a harder metal...gold is too soft.

Tue, 07/20/2010 - 16:54 | 479673 Ragnarok
Ragnarok's picture

You want to get really rough try barbed wire and some PVC pipe. 

Tue, 07/20/2010 - 17:03 | 479696 hambone
hambone's picture

Ohhhh?!?

Tue, 07/20/2010 - 17:18 | 479732 Ragnarok
Ragnarok's picture

LOL!

Tue, 07/20/2010 - 16:57 | 479682 AccreditedEYE
AccreditedEYE's picture

Who is this? Pissani? Covering the floor as long as you have, you should know the initial reaction (after hours) is usually the wrong one. If the script continues to be followed, we'll see AAPL sell off throughout the day tomorrow.  

Tue, 07/20/2010 - 17:23 | 479741 DMA Trader
DMA Trader's picture

LOL 

forward earnings per share will be almost 10 next year. 

let's short the crap out of apple. from 200 to 500 

we wouldn't let ourself sucked in by CNBC. 

we are even clever that Steve Jobs. even if we just chant on internet. 

 

Short everything. 

 

lmao

Tue, 07/20/2010 - 18:27 | 479883 AccreditedEYE
AccreditedEYE's picture

I have 3 items for you to work on DMA:

1. Margin/multiple compression

2. Massive deleveraging

3. Grammar check

You're gonna get your lungs ripped out on AAPL. (Hope you have a back up plan.) Have a nice day! :)

Tue, 07/20/2010 - 21:18 | 480111 francis_sawyer
francis_sawyer's picture

+1

"You'd better stay away from him... He'll rip your lungs out Jim"

http://www.youtube.com/watch?v=ZrjSqK7xPLE

Tue, 07/20/2010 - 17:34 | 479762 Pamela Anderson
Pamela Anderson's picture

Ahhhhhhh..... you are talking about the famous Bob "C3PO" Pisani... just an IDIOT that the bozo of Jim Cramer used to bribe to pump his stock picks when the bozo was a "HF manager".

Bob "C3PO" Pisani is also known as the biggest cheerleader of the markets, "C3PO" is always disconnected with the reality of the market and is an excellent contrarian indicator. Some of his favorites phrases are: "The traders are telling me....." or "...., yes, the problem is...."

Tue, 07/20/2010 - 19:06 | 479955 ColonelCooper
ColonelCooper's picture

I like to mix a few gold coins into a pile of silver when I jerk off to "My Precious".  Gives me something to shoot for..

Tue, 07/20/2010 - 16:45 | 479636 Yikes
Yikes's picture

TD's piece last week revealed AAPL amounted to 20% of Nasdaq valuation

 

AAPL up 3% after hours.  Prepare for a melt up tomorrow.

Tue, 07/20/2010 - 16:46 | 479645 carbonmutant
carbonmutant's picture

Looks like the Euro spent the day looking for a home...

Tue, 07/20/2010 - 16:49 | 479653 assumptionblindness
assumptionblindness's picture

"Whatever deceives men seems to produce a magical enchantment." - Plato

Tue, 07/20/2010 - 16:51 | 479661 Turd Ferguson
Turd Ferguson's picture

"As the deranged schizophrenic computer algos were blowing threw vacuum tubes like Ukranian hookers go through crack on any given Hamptons weekend"

This might be my new favorite, all-time TD-ism. Beautiful!

Tue, 07/20/2010 - 16:58 | 479683 buzzsaw99
buzzsaw99's picture

As long as no-one of any consequence is forced to sell the stock market could do anything and is indicative of nothing. You think they came up with too big to fail and zirp to see equities in the toilet? They will not raise short term rates until the dumb money is forced at gunpoint back into the risk pool.

Tue, 07/20/2010 - 19:09 | 479956 ColonelCooper
ColonelCooper's picture

+1.  Every day that this shitscrew of a world continues to function adds credibility to your post.

Tue, 07/20/2010 - 17:00 | 479691 I am a Man I am...
I am a Man I am Forty's picture

Apple is a unique company and does not reflect the broader world economy.

Some people just can't figure this out.  Great companies can do well in a shitty economy.

 

 

 

Tue, 07/20/2010 - 17:24 | 479745 DMA Trader
DMA Trader's picture

+1

Tue, 07/20/2010 - 18:42 | 479924 LMAO
LMAO's picture

Sure, Peeps defaulting on their mortgages and walking away from their homes, combined with extended unemployment benefits still gives enough "purchasing power" for the time being to buy a lot of crap that people really don't need.

 

Yeah, all is well in gadget land.....AAPL....buy, buy, buy.

 

LMAO

Tue, 07/20/2010 - 17:02 | 479694 hambone
hambone's picture

This sure looks like a time to sell the news. 

Dollar looks to have topped and bouncing back now.

Treasuries divergence...noted.

S&P and most indexes sitting at resistance.

Emmm, looks like a bull trap to me...unless we get through 50dma and then forget the whole post and time to go long.

Tue, 07/20/2010 - 21:22 | 480118 francis_sawyer
francis_sawyer's picture

+1

- Watch for an island reversal on EUR-USD to put a damper on things...

- 10yy bitchez (or +1)

- I'd prefer using 55dma (a fibo number)... But I agree with the concept...

May be a bulltrap (see how the "Johnny Hour" pans out)

Tue, 07/20/2010 - 17:03 | 479697 jkruffin
jkruffin's picture

See you folks at DOW 11k tomorrow,  no way they don't use AAPL numbers to pump the market up big tomorrow.  LOL   Maybe not 11k tomorrow, but again soon.  The plan is the plan.

Tue, 07/20/2010 - 21:24 | 480121 francis_sawyer
francis_sawyer's picture

Don't forget that "Bernocchio" flaps his yap for the next 2 days on Capitol Hill...

There's gotta be some DRAG COEFFICIENT attached to that...

Tue, 07/20/2010 - 17:06 | 479700 Leo Kolivakis
Leo Kolivakis's picture

Umm, what happened to my original post? Anyways, this market is heading much higher and you better prepare for more upside surprises. All those weeny portfolio managers sitting on the sidelines will be chasing stocks at a much higher levels. Trade of the day was GS (keep buying them dips):

 

Tue, 07/20/2010 - 17:23 | 479743 traderjoe
traderjoe's picture

Leo - respect the contrarian (for ZH) opinion, but which portfolio managers? I've read mutual fund cash levels are extremely low right now. I found this:

http://home.comcast.net/~royashworth/Mutual_Fund_Cash_Levels/Mutual_Fund...

Can you point to some macro-economic event that makes you bullish? An upcoming econ number you are looking for?

I skeptical of the thinking that says to be long the market just because it will be pushed up by xxx, without attaching some reasoning/macro to it. 

Tue, 07/20/2010 - 17:27 | 479753 Leo Kolivakis
Leo Kolivakis's picture

Keep an eye on Q2 GDP and next NFP report.

Tue, 07/20/2010 - 17:35 | 479776 traderjoe
traderjoe's picture

Fair enough. I think the first look at GDP might be roughly inline, with some downside possible, since it is easily manipulated (largely made up of estimates). Like the last couple of takes, it will likely get revised down as the additional looks come out. Of course by then no one will care.

For NFP, I think that is why Feds asked GM to stay open - to create some nice seasonals to the data. July is a rough month for the Birth Death model. We'll see...

Tue, 07/20/2010 - 19:40 | 480000 traderjoe
traderjoe's picture

Oh, and one more thing - I think we are one headline away from that liquidity event that sends the market down substantially. Germany pulling out of the European Stability Fund, a serious riot in Greece, etc. A hurricane in the GoM. There's no question that the European stability fund, ECB, etc. are all effectively Ponzi schemes. So, you might get a number or two that allows the bulls to run a bit further, but there's a ton of clouds out there. One of them is going to trigger THE storm. It's coming. I hope you can get out in time...

Tue, 07/20/2010 - 17:29 | 479759 Gromit
Gromit's picture

OK there's flight from mutual funds but shouldn't we be looking at funds flow into ETFs also?

Tue, 07/20/2010 - 17:13 | 479719 carbonmutant
carbonmutant's picture

 Apple's earnings being touted as proof that the consumer is still ambulatory...

Tue, 07/20/2010 - 17:25 | 479747 DMA Trader
DMA Trader's picture

18 YEAR OLD TRADERS. 

looool 

 

tyler you are one crazy crazy crazy bear :))) 

cheers

Tue, 07/20/2010 - 19:11 | 479959 ColonelCooper
ColonelCooper's picture

"with the average "trader" an 18 year old pustular math whiz-kid with the personality of a paper clip"

Johnny Bravo anyone?

 

Tue, 07/20/2010 - 18:03 | 479837 hambone
hambone's picture

Folks - this ain't rocket science...you buy on gloom and concern...you sell on good news and higher expectations. 

This is the latter and you will be presented w/ the former in no time at all...wash, rinse, repeat.  Bear tomorrow and bull again next week. 

Whether any of the gains (losses) will mean anything if it all goes to sheeeit, I don't know.

Tue, 07/20/2010 - 21:31 | 480129 francis_sawyer
francis_sawyer's picture

+1

So great... SPX nailed a 50% retrace of the move from 1010 to 1099 in the "Johnny Hour", then got news that FUNemployment benefits would be re-instated and now everyone can afford to own an iPAD to "stay connected" while they live in their cardboard box shantytowns...

Sounds like a reason to buy Chinese solars...

Tue, 07/20/2010 - 21:33 | 480135 francis_sawyer
francis_sawyer's picture

Oh yeah...

 

And while that was happening... ANOTHER Foxconn employee jumped to his death in China...

 

JUMP YOU FUCKERS!

Tue, 07/20/2010 - 18:18 | 479873 tao400
tao400's picture

All this talk about Apple makes me realize a very interesting psychological aspect of human beings. This morning before goldman came out, the CNBC boys and girls were almost coming in their pants, thinking that Goldman was going to blow away the earnings and save the day. I had flipped to Bloomberg and there was glee on eric shatzer's face when he mentioned that goldman would soon report. I did not see the earnings but I can imagine the disappointment. Then Apple finally crushes and the fast money boys are all jerking off about how that is proof that the consumer is back. Of course, it is not proof that the consumer is back because it is only one company with only 3 or 4 incredible products.. How quickly Goldman, Cit, Bank of America, Google, Yahoo, and IBM and their disappointments were forgotten. Now nothing matters but Apple. Which brings me to the psychological aspect of human beings. All this made me realize that almost everyone is long. Why is that? Because human beings want, hope for, pray for things to get better by nature. It is always curious to me why 50% of the people are not long and 50% are not short, as a way to balance out things. But that's not the way it is. 80% or more people are long on the market and I guess long on life. That might be a result of the fact that if you were short on life, then life would be a drag and everyone would be depressed. Who wants to be depressed. Being long is the only way to go.-

Tue, 07/20/2010 - 18:43 | 479926 traderjoe
traderjoe's picture

I watched FM too. I've really noticed a ramp in the bullishness over the last couple of weeks. Confirms John William's comments about the corporate mandate to be bullish. 

I'd add to your thinking that the ownership of stocks has become almost a religious notion - that since stocks have earned x% over the past x years, that makes them a great investment. And an entire industry has been created to convince people of just that fact. And it's a very profitable industry - mutual funds, brokerage houses, etc. All created to earn a commission/fee/charge for the use of customer's money. And one that intentionally (with a couple of exceptions like Vanguard) makes things complicated in order to get more of the customer's money. 

So, IMO it's not just about hopeful or not hopeful, its about an entire generation (Boomers) getting caught up in the advertising of a giant casino that offers customers the chance to get 'rich', while taking a small amount out of the pot each time the game is played. Whether future generations play to the same extent is the question. 

Tue, 07/20/2010 - 18:34 | 479906 GS is short Gold
GS is short Gold's picture

7% rich in valuation? big phucking deal. The market is so inefficient, I consider that a victory. That being said, can we all stop blaming BB, TG, HFT, PPT, and the boogie monster for a market rally. Some of us traders actually do trade on the long side too. And you don't have to be a clueless bulltard like Leo K. to make money long. 

This next rally is going to be a doozy. I don't expect it to end until Tyler D capitulates and covers his IYR short.

Tue, 07/20/2010 - 18:35 | 479911 Borat
Borat's picture

I found this short squeeze very interesting....

There was a lot of distribution while the market was making new highs today.

Every time the market goes exponential (either up or down) the result is a blood bath.. and people get burned.

Nothingh changed from the ugly picture of Friday, but there is a lot of bullish sentiment all around. Now, everybody is on the same side again (long)... will see how it ends..

Tue, 07/20/2010 - 19:10 | 479958 cocoablini
cocoablini's picture

I heard the opposite- since July money extraction is at a record now. At the heights, mutual fund cash was really, really low. Hedgies, retailers etc.are sitting in a lot of cash waiting for a meltdown. The PTT and momentum reversal systems want to create bear traps for the maximum short covering turbo boost. At some point, the market gets exceptionally overbought and the bears throw in the towel. that's when you short. I came in on the short side 3 days ago but I am betting the primary dealers are getting cash for their bond purchases again and pumping the market after the trade in. I guess I am early again- but this morning's reversal and ramp tells me the market/ money pump is back into equities.

Tue, 07/20/2010 - 21:08 | 480103 Nikki
Nikki's picture

Yeah yeah yeah apple apple apple... Why are we overlooking the flight to 10 year bonds amidst the obvious ppt equity pump ?. Not a bullish sign for equities at all.

Tue, 07/20/2010 - 22:09 | 480170 themosmitsos
themosmitsos's picture

as long as they're not pustular Ukranian hookers ya'll

Wed, 07/21/2010 - 06:25 | 480301 EZYJET PILOT
EZYJET PILOT's picture

Just sickens me that the fundamentals are ignored time and time again. 

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