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Decoupling Is The New Well-Forgotten Victory For The Bulls
Institutional memory is short. On Friday the plunging EURUSD was the trigger to kill the market. Today it's the other way around. Despite, as Reuters reports, new concerns about the Greek bailout proceeding, causing the EURUSD to drop from 1.33 to below 1.32, the low volume market is now in a total decoupling induced trance: the same lunacy that "explained" why the Baltic Dry was fairly valued in the stratosphere in early 2008. And volume is of course low, which means it is time to crank out the carry trade. The decoupling from Europe (incidentally the biggest export partner to the US and the biggest import partner to China, but who cares, we all live in liquidity bubbles now) is now complete. The only trade that matters is shorting Japan to buy US lack of risk. Recall that Bernanke issued a directive that nobody can ever fail again. Which in turn explains the outperformance of the financials, because last time we checked the justice department had not withdrawn its case against Goldman. Better get used to it - day trading is now characterized by a market that is now either slow 1% melt up on no volume, or a sudden a and dramatic 1% self off on all volume. And inbetween, the algos make money trading the high rebate bankrupt stocks.
Below is an intraday decouping chart of the EURUSD.
A better way to visualize it is on the longer term correlation chart from BofA. The market lost its mind some time around late January.
And here is Japanese pounding receptacle of choice.
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The market lost it's mind this *January*??? I think you're being far too generous.
"Pounding Receptacle"
+10
The whole economy is continuously updated with new "correlations" as precursors to future money making events by those that control it.
Manipulation everywhere by the wealthy possessed oligarchs.
Chart 21 would be impossible in the unmanipulated world.
Meanwhile, Citi and BofA lead as most active in the low volume run up of the ponzi earnings group.
Ah, well, given what I'm told by academics about the market being "rational," "efficient," and "perfect," I have to interpret all of these moves as a form of deep wisdom which I do not yet understand. Once I sacrifice a sufficient quantity of chickens and analyze their entrails, I shall surely catch a glimpse of the vast profundity behind its random-looking squigglies.
Pipe down, everyone. The great and sacred market is speaking, offering us its wisdom!
Oh holy market!
What dost thou tell me?
Speak thy great incantations!
Institutional memory is only measured in HFT's nanoseconds.
They just skip onto the next thing to link with just when people were finding some sort of logic to this madness and overvalued lunacy
As usual, the retailers and REITs are celebrating the collapse of Europe.
Don't forget DBRN, Robo. They go all the way up to size 24s. It actually went down for 4 entire days in a row before its vicious rip higher today.
Investors bailing on the EURO have to put their money somewhere. Unfortunately for Ben many are buying gold.
The US consumer is now the saviour of the global economy, so the strong dollar means their tax rebates and welfare cheques go so much further. Seems logical to me...
Today we're seeing something a bit different though. There was a big volume surge at about 12:20pm that rocketed the markets higher. Very different than what we've been seeing. Volume spikes like that to the upside confirm the strength of today's move.
"True. But you can make them lay down a higher bottom, which is what we've seen. DOW will not go below 9000 again in our lifetimes" Oct 2008
Nice call. Reminds me of in Titanic, "God himself couldn't sink this ship".
http://messages.finance.yahoo.com/ETFs_%28A_to_Z%29/ETFs_S/threadview?m=...
This one was the best
"As I said earlier based upon the facts and the impressive response by governments worldwide, the S&P will hit 1200 by year end. Easily. Just look at all the good news out there concerning credit and liquidity. This is a no brainer." 2008
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/ETFs_...
Nice forensic work, Mako.
He made one of the worse stock market calls I have ever seen, well besides the DOW 36,000 one.
I'm getting "snarky overload" on some of these Durden posts.
There is alot of wealth coming out of the Oil stocks and being destroyed in the oil stocks I think money is rotating into financials because they are a little blindsided about previous rock solid equities like BP potentially facing a BK if this continues for 3 months.
Rig is another darling. I think the really catalyst for a meltup will be when the administration admits this was done by North Korean subs. And if they hit 1? How hard is it to hit another?
It'll be interesting to see what happens when the United Nations food aid to North Korea runs out next month...
Or there's a monster loose. Other than Chuwamba.
U.S. Economy: Manufacturing Expands by Most Since June 2004
Love a great headline.
Problem is Privated Construction @ the lowest level since 1999. Public construction +2.3% Private Constuction -0.9% - GONG.
Oh yeah and why was income up this morning:Transfer Payments
This is totally sustainable.
BTW fun stats of the day: US Treasury rolled over $5.568 Trillion of debt in April. $4.905 Trillion is non-marketable. Greece needed a bailout cuz it couldn't roll €20 billion.
Rally on!
FOCUS on the oil spill! Greece is SOooo yesterdays news man!
Maybe I was smoking crack in the back office, but did the volcano just "go away" as well?
Must be some good shit if it burns that clean we can no longer see it
They can not, they will not, they must not let this market go down. We have to get to Dow 15K or else all confidence will be broken for a generation. It would confirm that the US is in a Japan scenario with decades of blight ahead. It would scare off foreign capital which needs very little convincing to go seek emerging market exposure. Corporations would have no cash for mergers and with a slow economy would need another round of layoffs. And worse of all, the Fed would need to expand it's balance sheet further and run stimulus into declining confidence. In short, it would be fourth quarter, 30 seconds to go, down 13 to 3, 1 time out left, injury on the field.
Silver on a tear today.
Is the $ becoming a source for the curry trade, yet again? ROFL, memories are short indeed.
p.s. Bloomberg had a nice articles on banks preferring to buy treasuries rather than loaning money. Given their finance cost are still negligible, they manage to make their profits. (that & marked to myth assets.) If that action is not the "vote of confidence" in upcoming recovery, I don't know what is.
Who do they think is deluded by the stock market? The generation lacked confidence in the system long ago... teenagers know of the marketing used to sell things to kids. If anything, th Fed is destroying the argument for the dollar as reserve -as the only solution they have is to spend more money... which is, to my mind, the difference between Barbie and professional.
This entire break in correlation started with the Payroll #s the first week of December, 2009. That was the day currency markets went crazy. Gold dropped 60 bucks. Ever since then, the correlations that worked most of 2009--weak dollar ^ = equities ^ = gold ^ and vice versa stopped working or are on and off as if traders are lost and are developing schizophrenia (which they probably are)
An audit of the Federal Reserve, MUST NOT BE ALLOWED!
if there was an audit, the entire world economy would fall apart and we would probably have another World War. It would be a bloody mess.
Please people, we cannot allow this to happen! I wish to live!
Ya... let's all just continue living in this surreal thing we call "free market", where Mr. Market is not schizophrenic, delusional, or hypocritical.
AUDIT THE FedUCKERS
but to live a lie or in ignorance, is that a life worth living?
Some things are worth dying for.
Early Morning Update: Both the dollar and bonds are significantly higher over the weekend, despite Greece accepting $146 Billion in shameful and disgraceful indebtedness—chains created by the world’s central bankers for which the people of Greece will be eternally laboring on the banker’s behalf. The Euro is actually much lower and forming a flag that looks bearish for the Euro. The direction of the dollar and bonds is not a positive for equities. – Nathan Martin of Nathan’s Economic Edge.
http://economicedge.blogspot.com/
"Well forgotten," I like that.
I've just been reading Extraordinary Popular Delusions and the Madness of Crowds, by Mackay in 1841. The first part of the book is the most important, being that it's all about fiat currencies, banking, and "bubbles," which was the common term for joint stocks. The rest of the book is about similar phenomena, like witch-hunting and haunted houses.
History repeats itself when people forget.
DOW/SP500 intra day chart gives bullish signal.
Interesting ...
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
Anyone see this posted today?....IF so, sorry..I just must have missed it.
Either way, seems it would have made front and center on most of the usual suspects.
http://www.theaureport.com/pub/na/6213