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Bonds And Stocks Diverge Terminally As Steepeners Capitulate
The attempt to gun stocks despite a battery of bad news is so far succeeding, as risk is now diverging completely from yields and no correlations hold any longer. Those tempted to test whether any human correlation traders remain may play the convergence trade, but with this unprecedented amount of central planning in the market now, it would appear unduly risky.
Yet one place where there is most certainly risk, is for the job prospects of all those on the steepener bandwagon: the 2s10s has just hit 208 bps, as the steepener trade and the thousands of lemmings behind it are getting slaughtered.We eagerly anticipate the latest life support note from Jim Caron.
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Lately, the easiest trade has been to buy the ES at about 9:35, right after the open. The PPT comes in every day, after the opening dust settles, and quietly rallies the market back to even. It worked again today.
Seven ES points taken out at the open. All seven replaced by the PPT by 10:30. This has become even more reliable than shorting gold at 8:00 every morning.
Why even fuck with that? Just dump everything into IYR or the REITs individually. Obviously, those fucking pieces of shit won't ever fall even with the most awful of the run-for-the-bomb-shelter news.
Aside from the broader index, this HAS TO BE the most rigged out shit in the trading universe.
Concur concur concur!! Help yourself to levering up on AMZN too.. another bubble where earnings misses can't take that stock down.
Why not take a sniff of BIDU, on the PPT Top 10 darlings. Up +4% on the news that GOOG was yet again shut down in China. When they realized it was a tech glitch do you think BIDU fell back, nope...
Boiler: Sounds like you're still getting the shit kicked out of you by the IYR/SRS cross. That is one painful fucking trade to be on the wrong side of.
I'm holding some December and November put in SPG and IYR. Of course, they won't budge. I won't touch DRV or SRS ever ever ever again.
I'm just astonished, literally, that they can perpetuate the fraud for so long and at the astronomical valuations. I guess I just don't 'get it'.
The volume seems to agree. Looking at stockcharts.com, the intraday volume for SPY and $SPX is lowest print on the chart.
Not so for ESU0...somehow despite all the bad data tonight will be a massive "risk on close" thanks to ES.
2s10s working on their own convergence, and that is on yield and not correlation.
Hmmm... yes the long bond has rallied just as ES has from 930 open.
Make sense? Sure.
So, what happens when this scam collapses and millions of Americans have to ride the 401(k) ride all the way down? What happens when people understand that they've been duped out of their entire retirement fund?
I'm honing the tines on my pitchfork as I type (quite difficult with only one free hand....)
Does this mean the Hindenburg Omen will be reclassified as two great movies from 1976?
Since the PPT is 'onto' the Hindenburg ... they'll make sure that the first one is not confirmed.
Some would say 'confirmation bias' but I call it psych ops for control of the market.
ha ha ha..... no lets not give up on Hinden-pitulation yet!!
They know they can't do this forever.. so when time is right, they will let crash. US President has all those unconstitutional "Executive powers " ready to be used.
Oh really? No offense, but who is going to stop them? In a backhanded way, the chasing out of the retail traders actually makes it easier for them to do it. Also, the 401(k) holder will cheerlead the hell out if it due to the false sugar high.
I'm on your side, but we've crossed over....well into the 4th dimension here. When laws don't apply...and they don't...then they can do whatever the fuck they want to. You're witnessing it right now.
Once the retail trader is chased out, who is left to rob? Big banks screwing each other?
Boiler, they don't have to set the bots to crash mode. Anything man made will always glitch sooner or later...
Everything is so crazy right now.
Enjoy the show.
..perhaps an era of responsible government.. in other news, it might be possible that it is not a divergence between stocks and bonds, per se. There may be two other facxtors which are dwarfing the usual risk allocation. ..the Dollar requirement that we might usually see in the fx arena may be poking its head thru the Treasury market instead and equities, are based most likely, on a batch of above-average hookers getting deep discounts at soon-to-be foreclosing hotels. In other news, it's monday.
let's try that punch line again....
"responsible government"
hahahahahahahahahahahaha!
again....
"responsible government"
oh stop please no more! hahahahahahahahahaha.....
"euphemistically speaking"
Yer gonna git raped.
"..perhaps an era of responsible government.."
IMHO, there has never been a responsible government for any sustained period. The only issue is whether the gvt has limited or unlimited powers. Limited governments have less power to mess things up. But even limited governments are irresponsible. They just look more responsible because their ability to mess things up is constrained.
A 70 point pop from the Empire State Manufacturing Index? We are grreeeeennnn!
One question though, other than a few hardcore meth and/or crack lab ops and some sellside 'research', what exactly does New York produce these days?
financial innovation.....duh.
Homebuilder 'confidence' at record lows...good for a run up.
I feel it is going to explode. Up or down.
Money for nothing, bps for free.
HAHAHA! Awesome!
Your 2.5 before 4.5 on the 10y is just about money good buzzsaw99.. Looks like my 2 before 5 will be as well..
+10
Through 200 on its way to 170 and beyond...
I caught this rather bizarre juxtaposition on the CNBS WEBsite.
"Home builder confidence for newly built, single family homes fell to its lowest level since March 2009, according to an index released Monday." was the headline for the referenced report.
"Stocks Shave Losses After Housing Report" was and still sort of is the headline in the indices box.
Whatever...
Pete
Fixed income desks trying to sell me steepeners a few months ago. Didn't smell right....
I guess you have to be of the opinion that their still trying to screw someone rather than perpetuate the illusion. I personally think that they've created such a massive fraud that they have no other choice but to continue it. There is only one way for a ponzi to go unless it collapses.
As far as the banks cannibalizing off of each other...I don't know. If they are using Fed issued fuel (likely, in my opinion) then it really isn't a feeding frenzy off of each other. We have no idea what's going on behind the curtain but I feel fairly sure that the banks aren't killing each other. As long as they are being supplied the tools necessary to gun and prop up the market, that's in their overall best interest anyway.
I actually think chasing the retailers out is a good thing for their mission because it takes out an uncontrollable behavior of the herd. Just my two cents.
I'm pretty slow, but I figure it out every now and then... We should follow in the footsteps of the PD's... Buy the the worthless treasury paper and leverage it up to go long equities. Sprinkle some hedges in to take advantage of short term fluctuation and you are set. If they are going to break correlation at least we can go along for the ride.
Steepeners capitulate ? I like capitulations. Bill Gross likes it, too. He sells his boatload into the rally. PIMCO´s falgship up 12.8 % YTD tells you all.
I thought the problem was too much correlation not too little? In short "nobody is making money" which of course is all the bankers want since that's what keeps them "first among un-equals." I find it fascinating that in an era when "no one believes in efficient market theory" they all believe--indeed appear to masturbate to--rational thinking. Whatever "the market" might be "thinking" clearly this makes no sense. To me "the greed area" is so obvious only a banker and all his buddies in Washington DC can "disguise the problem." That area is of course oil specifically and energy in general. It's the "Area 51" of the economy that will "forever remain a mystery to them" and "god damn-it better remain a mystery to all the rest too."
We shall soon see if the Hindenburg Omen along with The death cross is for real or just some theory that was made up by some bored down on his luck Harvard Guidance Counselor who lives in a basement apartment with his mom.
the G7 control all markets absolutely
the whole of it is 100% fake
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