This page has been archived and commenting is disabled.
The Amazing(ly Profitable) Intraday Risk Divergence-Compression Trade Strikes Again
Increasingly more people are starting to outwit the Fed at its own game, which appears to have run out of sufficient capital to manipulate all risk assets (troubles at Citadel?), and thus is forced to focus exclusively on the E-mini. While not pointed out explicitly today, those who were following the trade were presented with an amazing opportunity to pick several basis points when ES once again ramped away from the risk basket (AUDJPY, EURUSD, 10 year, 2s10s30s, Oil and Gold) following the more than obvious buy program attempt to triggers stops, only to slam back with a vengeance and close the gap at close. Like clockwork. The trade continues to be an ideal play for everyone who wishes to remain bull/bear agnostic, and merely trade against Brian Sack's increasingly desperate and underfunded attempts at risk manipulation.
A classic case of open and shut failed divergence:
And the more than obvious attempt to gun the market at 3:06 pm. Rejected.
»
- 10997 reads
- Printer-friendly version
- Send to friend
- advertisements -
Was waiting for this article. Thanks to you, I'm learning a new trick.
OT: The Eastern Black Swan Continues to Gain Altitude
http://enenews.com/radiation-dose-reactor-1-hits-new-high-204-sieverts-hour-drywell
Record high radiation detected in Fukushima Reactor 1 DRYWELL, 204 Sieverts/Hour. Yes, that's sieverts, not millisieverts!
If it feels good, do it.
+1
Both very profound and hilarious at the same time-- well played Mauer.
how would a retail minion play this?
buy at 2:17 p.m. daily then sell the blip?
Trust you to blow smoke thru my months of jury-rigging. Though sometimes it's best to buy 40 minutes after a bond auction.
You have to define surrogates for all the Gloomberg terminals can show. I'm just hopefully getting the hang of it by keeping the FX list up, with whatever I can find for ES, and volume for 1 min SPY.
keep your eye on the correlation?
http://www.youtube.com/watch?v=qRa9uhiAPBs
Me likes birds.....
Don’t go to bed with no shorts on your head
Don’t do it
Don’t do the crime if you can’t do the time
Keep your eye on the sparrow
When the ir spread gets narrow
Don’t roll the dice if you can’t pay the price
Don’t do it
Don’t run your feet down a dead end street
Don’t do jpm dirt or you’re gonna get hurt
Don’t do it
Don’t run away ‘til you hear what I say
Ain’t gonna fight with no squid in the night
Won’t do it
I’m gonna go where the FX wind don’t blow
O, stop it! Time to clean the screen again, dammit.
Mr. Buzz
Hat tip, my good sir.
This has potential...
ramps away from the risk basket are shortable...
carbonmutant
"This has potential...
ramps away from the risk basket are shortable..."
me likes
(and well said by mutated non-organic life form)
(carbon non-mutant)
Sounds like an argument for QE 3 cubed.
"dont fight the fed" script has been flipped..The inmates are taking over the prison...
how do you make the riskbasket in bloomberg? would like to replicate
If you have that much in FRN's, why aren't you in gold? It ain't Gloomberg.scam ya know.
Hope that gold/silver breakaway from the risk on/off trade correlation.
Here's a question:
If QE3 is announced, just as the previous QEs have been... everyone will front run it and go strong and long equities, like they did for QE1, QE2... so, if there is no one short in the market... will the market still go up?
Surely, with everyone long and no one short, the market is more likely to go down on more QE announcement, no? Not possible for everyone to be on the winning side, and more likely that the majority lose... so if the majority are long, the market will need to make them lose by tanking, no?
Why sell while the helicopters are orbiting?
They may try to ramp this bitch with RUMORS OR LEAKS of a possible qe3.There you may have itchy trigger fingers who try to front run it..Just the talk may keep the shorts on there toes..Desperate people do desperate things so I would expect the unexpected..
Ben doesn't have to say he is going to pull a rabbit out of a hat; he might do the endless multi-colored handerchief out of his sleeve, or the rope in the palms knot trick.
What is shown and not shown - and where attention is drawn or diverted - are equally important to the illusionist.
This bodes poorly for Mr. Market.
What is the Bberg symbol for the 2s10s30s fly?
CIX <GO>
2 * USGG10YR Index - USGG2YR Index - USGG30YR Index
Anybody help out on how to replicate this risk basket as a CIX in Bloomberg? Comment below that Tyler posted the calc yesterday, but I can't find it anywhere...
Excellent trade idea. Good work ZH
second Mr. Rick
good work ZH
Playing with the FED's ability to provide Liquidity is like playing with Fire! I Luv ALL My Bro's here so please exercise due care.
if you are shorting America! you are shorting yourself in the long run! dont get caught shorting anything, except oil! LOL thats FED Approved!
No, I'm shorting YOU! Always talking to yourself.....
silver is almost $40.. time to short silver too.. I hear the FED's foot steps! he's coming!
Short Ag my ass. Well, until TCT gets back in ZSL that is.
Just don't say niagra falls to the fed.
http://www.youtube.com/watch?v=_yJBhzMWJCc
Isn't hoarding PMs the same as shorting the printing press du jour ...
How about those Canucks!
those canadians have to much PM's.. I think if the lights go out I will need to go north and help lessen their load, considerably!
Just kidding! they will need rum! I can trade for it!
A Rum Swizzle for Labatts Blue trade ... nice.
lol.. no, no my friend.. we will need some shiney beeds of silver and gold for my chest! I have a war to fund!
aye matey !!
Ok, here comes FX restart.
Many ETFs and stocks ramped higher in response to the futures ramp. How do you eliminate the possibility that a big player ramped the futures so that they could dump their ETFs and/or stocks at a higher price?
Pump it up, then dump. 3 day settlement for profits.
Have you ever seen killer whales herding penguins or wolves herding sheep?
You are arbitrageurs.
Better than being poseurs.
Ya baby! Sell that USDHUF!
1 month of gloom and bad news and S & P 500 down 37 pts from cash closing highs
I'm just speechless how this has held up after the greatest 2 yr run in U.S. stock market history with tons of bad news hitting daily.
Retail stocks like AZO, now nearly $300/share just 2 years after the biggest financial bust in 50 years.
Just shows the raw power of "ZIRP" policy and TPTB which simply will not allow stocks to drop.
Yep. Now prepare for the hit posts. I became speechless after losing 30K to this shit.
http://www.youtube.com/watch?v=NPm_9YWRKMA
"1 month of gloom and bad news and S & P 500 down 37 pts from cash closing highs
I'm just speechless how this has held up after the greatest 2 yr run in U.S. stock market history with tons of bad news hitting daily."
-
It's all priced in, baby.
You gotta love these ultra efficient markets.
I'm certain there were lots of amazed people in the late 30's right before they sent their Sons off to die in WWII.
RUT held after ES dropped... Banks suck. Gambling stocks up- that's where the CASH is.
Adding to AZO short. Just because there are earnings don't mean it ain't a ponzi.
This stock is worth less than nothing in liquidation, and every quarter book value drops further as they borrow more to buy back more.
Maybe one or two more down days, currencies look like they are ready to turn and gold and oil stocks have shown relative strength like "Risk On" run is about to take place.
http://clearstation.etrade.com/cgi-bin/bbs?post_id=9495742
Believe it or not some gold stocks are up 4 - 5 days in a row yet the GDX/GLD ratio is still in the gutter showing that a huge run in stocks could be in front of us.
http://stockcharts.com/h-sc/ui?s=GDX:GLD&p=D&yr=1&mn=0&dy=0&id=p77775107615
Must....have....window...dressings...
Really need to see 2008 to put that GDX:GLD ratio into perspective:
http://stockcharts.com/h-sc/ui?s=GDX:GLD&p=W&b=5&g=0&id=p42954209118
Good work, thanks.
Gold is about to roll over.
Stocks about to roll over.
10Y UST going up.
gh
Ya' know? All the opinions from Stockmans, Pimcos, Chanos, Kass, Hochberg, they all repeat themselves day after day. THIS is where the talkin' is! Thanks Ty & Robo ( or robot) this is the Real Deal. Thanks guys & gals, awesome site. Donating money , first time.
O.T.
Wiki War: Israel, Palestine dig digital trenches http://t.co/8kkWqsz
Asked last week, and I'll ask again - can anyone tell me how the risk basket is calculated? I have a bberg, and happy to post the divergences as and when they happen. Ta.
I search and search the internets and all I get is this crap:
http://www.longaberger.com/resources/1/flyer/mayjune11/spread2-3.aspx
O.K., this might help, though a thick tome:
"Index Mathematics: Index Methodology" by Standard and Poor's
http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3DMethodology_Index_Math_Web.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1243903844864&blobheadervalue3=UTF-8
Page 38, I think...
Oboy, are you just discovering the HOAX in Index Methodology? How about the DOW?
Oh no, I follow the Samuel Clemens school of statistics.
He asked for information on calculation, which is completely different from belief or understanding.
I'm neither an ecclesiastic nor a politician so I'll stay out of attributing understanding (though I do note that at the core of the equations the units of measure are Earnings Per Share - ack!).
Tyler answered yesty.
Does anyone know how to chart this risk basket in ThinkOrSwim?
Just pay the 40K a month for a Gloomberg terminal, and call it good.
Might be /year.
Use The FORCE, Luke. Can't you Feel It?
Good stuff, now a author who adapts to the markets. I respect that. The FED are stuck now, a QE3 with keep compression bull/bear trades going but with a wider spread. There is money here for us poor traders, after the double up off risk buying last *cough* two fucking years for buffet value trading - which will be decimated in volatility.
Emerging markets should get the short sell treatment now ala Hedge Funds on China slowdown.
Americans will pay CELLPHONEs before anything, before mortgages (because banks don't accept $100 partial payments), before Health Insurance, before paying income taxes (a joke), so what about SPRINT? Looks good to me, new 52 week high today. Comments?
I don't know about the economics of it.
But I think you're right about the frantic reliance upon the cell phone. My god, anything rather than being left alone with your thoughts. So many would find nothing.
I think you are wrong. this is how a base is built with people selling at the new high, but supporting the low. I thik we have seen teh bottom in a while. I like speed lines, and this is where I thought it would be on many indexes.