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Carry Unwind En Masse As Market Plunges
With the Goldman hearing going horrendously for the squid, and S&P pouring nitroglycerin on the sovereign implosion fire, the primary source of funding, the carry, is getting taken out to the woodshed. The unwinds of carry mechanism make controlled single file exits out of a burning bank office building seem tame in comparison.
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Yesterday i told that we were on the verge of something bad in the markets. Today we are breaking down really ugly what was supporting the market. Expect a 10%/15% minumum.
http://midasfinancialmarkets.blogspot.com/
You still don't understand the psyche of this market. This will be forgotten by tomorrow's open if not by today's close. Don't underestimate the dip buying by end of day. Shorts have been burned so often that they can't carry a big market loss to the close because they consistently run for cover by 3:30 pm.
And you do?
Sorry Harry, but as we are all learning to call it - that was a shitty trade idea.
Yesterday was a clue, and equities do actually pay attention to CDS markets, often with a useful 24 hour delay.
Did it look like someone ran for cover at 3.30pm today? Yea, it was the dip buyers (maybe this include yourself?) who plunged in at noon and 1pm? Right about the time of your post? Hope you had the instinct to cut and run though, or else :o
Psst ... Project Mayhem needs BANDWIDTH!
@Wanger Troll
Please tell me you are buying right now. Please. Oh, and I won't forget your "no 5% pull backs until we hit a new all time high" bulltardishness.
Yes, I am buying. Added a bunch of AAPL at 262. Pretty much a gift if there ever was one.
I have another "gift" I'd love you sell you, Wanger. It's a bridge in Brooklyn. Priceless, and yours for a song.
And I was worried that AAPL was overpriced when I bought at 11.
Just make sure you show your face around here when we're falling below 1120 and then 1085 and 1047 and etc.
I think I saw that trade cross. 8 shares at $262, right?
Re: more bandwidth. Donate. I did.
This market mini-shudder brought to you by the same vile scum who threatened you with martial law if a $700 billion bailout were not passed in September/October 2008.
Yeah, that was fun while it lasted. Now the ramp job.
No ramp today. Maybe after a couple more days of selling. Too violent and high-volume to just reverse mid-day, the algos have all switched to sell down to support, lower bollinger, etc...
Already starting. As I said in another thread, shorts have been burned so badly that they can't carry a strong down day into the close. They will, as usual, cover en masse at 3:30.
Still early, lets see how the day ends.
No frantic covering today at 330. This is the 700 point plunge like we had when the first attempt to pass that ridiculous TARP theft failed to pass. Warning shot. More to come if you don't play ball.
Could be cause half the PPT is in front of Levin getting grilled too. Not even a decent lunch break, and no time to tell the HFT computers what to do.
Harry, got to applaud your no retreat style. You have been mega junked. You have been slapped silly and yet you remain true to your stance.
I hope you do well.
I still think you must have pimp cup to be a real pimp.
Thanks. I think part of the problem here is people get fixated on a topic like Greece and overlook the strength that's coming in earnings. When 3M reports such a strong Q and raises guidance, it tells you something about global growth and demand. Why people over look that, I don't know.
Also, the psychology of the market has been to buy dips. As I type, we're zooming higher off the lows and almost back to 1200. A close above 1200 will once again put a dagger in the heart of all shorts.
Or alternatively, people get fixated on 'strong earnings' based on watered-down estimates and one-time boosts from layoffs, inventory reduction, etc. and ignore anything negative, forget about massive US debt and deficits, and the huge looming overhang in real-estate when all these ARM loans start to reset. That said, fighting the market is a good way to get your ass kicked, and you've been on the money recognizing that Harry, although I still doubt the rebound today.
If it's pretty clear that shorts have to cover by 3:30 pm, explain why there are any shorts at all? Who in their right mind shorts under those conditions?
Agreed (except for the violent part). This is more of an algo controlled descent. If this was a 'real' sell-off, the first to get hit would be the banks and their fictional books. The big 4 banks (WFC, JPM, BOA, COF - not counting GS and C) are still trading low volume wise. If the market was really sick, they would be the first to cough.
Violent was too strong a word. Just more vigorous than usual so far. For the record I do expect a bounce to rechallenge recent highs, just after a couple more days selling.
In this market. selling should be referred to as "selling" - with scare quotes. The trade-o-bot got turned on at 12:30 and around 1:15 everyone figured out that the buffet was open again.
Looks like GS is throwing a tantrum.
Banks and Investment Banks have gotten too Big and when they are taken to task or there is Regulation they do not like they take down the Market.
The few remaining Big Banks and Investment Banks have gotten to big and influential to exist. They are a threat the the Sovernty of the United States.
How can anyone invest in a market like this? Is a 10 year time horizon enough? Not based on the last 10 years. I think we are approaching the "event horizon" where we might actually see a multi-day if not multi-week push downwards. Not sure if 10-15% is too much or too little, but if we see a down week we might see a down month. (first time in over a year?)
Wishful thinking. My morale is so low right now since they will find a reason to punch higher by tomorrow. As ugly as it could look today, we must make moves to recover short side losses. I'm depressed but still carry some hope that your comment for "event horizon" carries some weight.
Wouldn't things have to get really out of control for that to happen given that the government is buying equities?
people are idiots, as soon as i say "hmm, this will correct soon", somebody guns it another 100 pips and then we get a nice second dumb money top before it actually happens. i, for one, despise our new overeducated overconfident and overleveraged overlords. they create artificial inefficiencies in the market just to rake in more dough and know noone can do a thing about this sabotage.
I need to hear a senator say "shitty deal" one more time before these hearings are over.
New drinking game sweeps nation's campuses.
Just uploaded a Dow weekly chart showing a bearish broadening top pattern.
And Euro is breaking down now.
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
I have not really kept up but isn't this the biggest single day decline this year? 1.5% so far and we just made a new low for the day at 3:49 PM. How much can it rally in 11 minutes? Or will it? I say no. We will close at the day's low.
Edit: Make that, down 1.7% with 10 minutes to go.
Oh crap ... of course. It makes perfectly good sense. The market can't rally because the GS bigwigs are too busy defending themselves in Washington to give marching orders on behalf of the PPT to buy like hell at the close.
Geesh ... what a dope I am. :-(
Edit: Down 2% with 4 minutes to go. Rally time. :-)
Why the hell was GS green when everything else went down? That's what I can't figure. Plus I got sucked into buying FAZ calls 10 days ago. It jumped my stop and I said aw crap. Now if I was smart I would have sold into this rally, (Yes, I consider it going down a rally, It's time for a break today) now you have me wondering, wouldn't those guys step out and tap one key on their Blackberry that says buy? Maybe it's the iPhone or maybe, it's scare the Pols time. In January when Financial reform came out with the Volcker Rule she dropped from 10700 to 9900 until Obama more or less told them this was for show. Then we have a massive rally. Now GS gets Nailed. Recall each time these fucks interests have been threatened the market has crashed like no tomorrow.
Congress Dicks that wouldn't vote for the bail-out were reminded by their colleagues, the Dow is down another 200. That's when the politics of the Dow started. So this may be a repeat . God I hope I'm right. Otherwise my boat crashes into the FAZ rocks again
The Dems won't roll until it goes below 10,000. Throw the TA and the BS fundamentals away. Watch the political action. I was on a site a last month where people were delighted with Obama because their 401ks had recovered. When asked if they got smart and sold, they replied with heavy sarcasm "it's still going up, you troll".
Goddamn that was tough to take. But there it is, Market is wrapped around the thumbs of the TBTF who want to grow to BETTO (Big Enough To Take Over) size . The S&P is their toy and they will plunge spikes in it when people say bad things about them. So all we can do is to send letters to the Pols and say I seriously never would vote for a Dem in my life until I finally saw you people grow a spine and take it to those TBTFs. I am sending this note to millions to send money to your campaigns.Don't think of the short term. The market will come back. That's your power they are trying to take away and we are scared of the vampire squids. So please do something heroic and take lots more money from the Defense industry. We won't short them. Sincerely yours
The Bear Pac.
The market will be down to 7000 while the Bulls here are too busy taking margin calls. If we don't send the letters and some money to pay em off, 9900 is all we get. Watch for my new blog, A Quantitative analysis of the markets relationship with The major polling outfits. I think I can sell an ad if one or two of you come by.