Did The Market Top Out on Friday?

RobotTrader's picture

With "billions under management" at risk and thousands of nervous hedge funds playing with 3x leverage (thanks to Bank of America Prime Brokerage), everyone wants to know if now is the time to "make a killing" by going short stocks.  After reviewing many charts, it sure looks like another "Get Out of Dodge" day.

Let's review the checklist:

1) QQQQ and IWM breakdown?  Yep, they cracked big.

2) Financials breaking down?  Not quite yet.

3) Retail stocks breaking down?  Not quite yet.

4) Commodity "Midnight Massacre"?  No.

5) Fleeing to USDX as carry trades unwind?  Not yet.

6) Emerging market status?  Blowtorched.

7) VIX going vertical?  Yep.

8) Summation Index and McClellan Oscillator going down? Yep.

http://stockcharts.com/charts/indices/McSumNYSE.html

 

The
"all important 21-day" keenly eyeballed by the mo-mo crowd is about to
break.  One more day, or a gap down on Monday will seal the deal.

Check out the VIX:

Instead
of showing the bad break of the EEM, instead, you can see the mo-mo
gamers immediately started piling into the EDZ "Triple Whammy" casino
table with 5x normal volume:

With
everyone attempting to "make their year", the hedge funds are acting
like "speculative locusts".  We'll have to watch and see how fast
everyone swarms over to the bear casino tables.

Put/call ratio today went ballistic:

Note the huge volume in USO today.  1974 all over again?

So where do the hedge funds hide during bouts of geopolitical turmoil?

Netflix, of course....

Unfortunately,
the card playing, booze drinking, and escort playing Plutocrats in
Davos will have to have an emergency meeting this weekend to avoid a
complete and total meltdown in the global financial system.

Because
the girls are all sitting home with their clickers, scared to death,
toggling between CNN news and watching the latest horror flick on NFLX.

Rest assured that come Monday, if the market gets smoked, the 19-year old video game console traders at TIAA-CREF, CalPERS, Fidelity, etc. will be forced to flip and go short as the FemBots will be screaming and shouting:

"If it's going down, short it!!!"

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hellopahello's picture

sell sell sell ....................

66Sexy's picture

USO is actually 55% US Treasuries, fannie mae, ING, USD, ... crap like that. the whole move appears to have been pure speculative on a half ass real bet on oil.. 

imo dyodd nia

go pure futures, like DBO has over 100% july calls on WTI. because i've noticed that anything that starts with "United States" (like USO, UGA, UNG, etc)  you will actually be heavily in government supporting issues... nearly shit my panties when i found out, deceptive and sneaky, isn't it? AND.. these are leveraged.. heavily. Imagine, thinking your in an oil play and your in government derivatives! please: correct me if i'm wrong...

Checkout the holding for USO:

Fidelity Instl MM Fds Government I N/A 35.28% Goldman Sachs FS Government Sel N/A 20.53%

 

the other 'united states' etf's have a similar distribution.

These have identical graphs, so you can assume they have the same types of issues.. they include fannie mae, ING, and US treasuries.

And for these reasons, if you want physical oil, may be best to just buy the oil companies themselves; waiting for a pullback. Or get into something like DIG which has shares.

slewie the pi-rat's picture

 

RT, if this were PM's, we'd know they had just been waiting to exhale.

but, this is paper PAPER. 

i'm not v. good at predicting the future, especially at the parimutuel window.

women are much more predictable, but not w/out the occasional upside surpise, even for them, too, as it turns out...

the vix spike:  yep, the stage may be down the road.

if i had any discretionary green stamps left after getting all my meagre assets in a totally defensive position for years, it might be fun to short an index and sell some puts.  but i don't, so i won't.

plus, we've seen the head fakes and expiry-date wipeouts b4, but it HAS been a while, eh? maybe due to circuit breakers;  who knows?

so, we're all doing the sorting and the wash here, but what slewie is left with after drying and folding is this one damned sock.  wish it were yours, but it's tyler's:  our alpha Theta's regular reminders that the insiders have been bailing for months, now, under cover of the liquidity sloshing in the wash. 

their stage HAS left town, good lookin', and so has my little ship left port.

curly, larry, and mo-mo can fight over what's left.

should be funnier than a carload of clowns leaving DC.

on a forklift.

ZeroPower's picture

No, i would say this is NOT the top.

RoRoTrader's picture

Last week Faber called a top and warned to lookout for a sharp 10% correction and a rising USD.

Maybe, don't know but after the selling final prices for Friday were very close to the previous Friday's closes.

EUR/USD 1.3615

USD/JPY 82.10

AUD/USD 0.9925

AUD/JPY 81.50

S&P 1275 vs previous at 1285

Dow 11,825 vs previous at 11,875

NAS100 2270 vs previous at 2270

DAX 7085 vs 7070

WTI OIL 89.40 vs 89.25

Another point worth making here is that the S&P sold off from 1300 to around 1275 on the 19th of Jan only to rally back to its previous top.

The sudden selling may look dramatic in the context of current price action but not convinced one day of a sharp selloff in a very o/b market means there is momentum to confirm it.

 

cheesewizz's picture

MO MO never ends well...

williambanzai7's picture

That Vix Chart is a triple black diamond ;-)

velobabe's picture

i don't know how to play poke her.

WTF2's picture

Buy the efing dip, not.. 

Leo Kolivakis's picture

Still a stock picker's market. Even on Friday, some names popped big:

Mr Lennon Hendrix's picture

We should day trade the pension funds...oh wait, we do.

Zero Govt's picture

from what i hear (and painful experience) only 4% of people make money 'stock picking'. Crap odds, Vegas is better, and so are the girls

mynhair's picture

Don't forget AVL, with it's 6.24 right after the open. Then down to 5.85, back up to 6, and to hell with where it closed - I was outta settled funds by then.

Rogerwilco's picture

This rigged SOB market has given so many head fakes since 9/09, it puts Michael Jordan to shame. Nothing can shock me anymore. I'm at the point now where I believe any major collapse in equities will be reversed by decree -- a systemic do-over will be declared.

Ned Zeppelin's picture

Agree: collapse will not be permitted, and any measures required will be taken. Wealready crossed the Rubicon.

Zero Govt's picture

 the PPT and Feds powers are a myth like the Wizard of Oz.... how's QE1, Lite, 2 coming along? ...look at 2007-08 for QE1 results and now QE2 is coming i expect the same... the stock crash will bury the impotent Fed hopefully too! 

UninterestedObserver's picture

Especially since they will need a reason to do QE3 which a crash will play nicely into

Zero Govt's picture

yes but have you seen the Feds image lately? ..it's gone from mild respect to having a bit of a snipe at them to near all-out redicule.... even the politicians are winding up the handbags!

Only a matter of time before The Fed has to back-off to the social pressure so my monies on QE3 being a last whimper before the politicos shut em down for good 

unwashedmass's picture

i would agree with that. they want to raise the debt ceiling and they need QE3....nothing like a little decimation of the peasantry's retirement funds to bring 'em back in line and supporting the money printing. i say we do a very short, but very painful correction here (what a joke, manipulated to a predetermined level) like down to 1180 and they prime the CNBC, Bloomberg pump to get everyone hysterical about the possible break of this number....and then.....

and then.....we raise the debt ceiling

WE BOUNCE

and then, two months later, Bennie announces QE3 to "support" the markets, and everyone, after the horrible near miss in Feb/March, just nods and goes along.

of course, by then gas is 5 bucks a gallon and the economy is literally on a respirator, but this market hasn't had anything to do with what's actually happening for well over a year now.

Zero Govt's picture

you mean the Indexes are on a respirator... they've weazed up for months like a pensioner climbing a mountain starved of oxygen, the volumes are pitiful......  i agree with your down, up, down outlook for stocks but think commodities will go with them... $5 petrol is (possibly) history ...and if the debt ceiling goes up the public are going to hammer both GOP and Dems at next election, think these old fart parties stink too much now and are both for the dustbin in the years ahead

Jasper M's picture

Zero: Thank you. One of the more thoughtful posters I've seen here lately. 

Fed is destroying the myth of the potent directors as we speak, by revealing their own impotence. As for ridicule, Congressman Paul will be holding hearings to do just that, and an angry public will be ready to listen. Gonnna be like Watergate. 

But I disagree re petrol. People don't remember how low petro consumption can go ina depression. Most petro consumption is commercial. 

cdskiller's picture

If Paul succeeds (and I hope he does) in building a strong enough coalition around the idea, and the Fed is finally audited, all hell will break loose. Once we find out what is in the garbage bin, trillions in worthless assets, for example, it will be very hard to defend keeping the lid on, and opacity has become essential to the scheme. Paul is playing with a fire of historic proportions. Transparency is public enemy #1.

Problem Is's picture

Michael Jordan?
The market dances like Michael Jackson in a Pepsi commercial with his hair on fire...

And Like Michael Jackson
The market is massively drugged up just to function and get to its next day's performance...

After the show the Doctors (POMO, PPT) swoop in for more plastic surgery to make the market appear prettier than Diana "Michael Jackson" Ross...

Talk about lipstick on a Pigman....

DosZap's picture

Rog,

I believe any major collapse in equities will be reversed by decree

 

How do you think they are where they are now??

PulauHantu29's picture

Crowds running to Safe Havens --oil, gold-- on huge volume.

 

So maybe we will see $5 gas, $120 oil and $2,000 gold this year after all.

 

I notice when the Tunesian/Egyptian/Arab Dictators skidaddled, they grabbed their gold out fo the vaults first....fascinating is that "silly yellow metal" that everyone wants for wealth preservation.

Ned Zeppelin's picture

Gold has the advantage of being worth something under almost all conditions. Its value is  "a priori." 

RichM's picture

This claim means precisely zilch, since one could say the same for ALL types of assets, PMs or no. For example, a share of SPY would be worth 60% of its current value even if the stock market collapsed -- but that qualifies as "something," doesn't it? Likewise, gold might easily be worth much less than its current value. It's already dropped 6% or so in a month, & no one can be certain that it's bottomed out here.

People at ZH are irrationally infatuated with PMs, & are constantly trying to convince themselves that it's "invincible." It's not invincible. Painful declines are entirely possible.

I need more cowbell's picture

You can't possibly be that stupid, really? What do all the giants have tons of?

One thing and one thing only. Not oil; not silver; nor yranium; not wheat.

As in all situations, follow the money- in this case, true money. And it has been like this for thousands of years.

UninterestedObserver's picture

But they can't eat it and that shit is heavy

DosZap's picture

Yes, that BARBARIC RELIC!!!!!!!!!!!!!!!!

chindit13's picture

"silly yellow metal"

Gold:  Breakfast of Despots.

On the streets of Cairo, however, I noted that those people prefer food and appear not to be concerned about silly yellow metals.  I also see that many will simply take what they want, even when faced by an entire army.  That suggests that a single metal hoarder, no matter how many guns he has nor how much practice he has done at the range, will not fare well.

I don't know what the alternative is, but as the reality playing out before us in Cairo shows, sometimes there is Zero Hedge.

Mr Lennon Hendrix's picture

Gold is monie, it is not necessary for survival.  What is your point?

BeerGoggles's picture

The market isn't going down more than 10%, you can buy the fucking dip there.

 

DoChenRollingBearing's picture

Bang, bang, shoot, shoot!

I already have GOOD, not yet time to BTFD, IMHO.

Good to have you posting "up there", RobotT.

Careless Whisper's picture

i guess F didn't make ur top 10 list. maybe u didn't notice. and GM didn't have a good day either. at least domestic oils were heading higher. don't have to be a rocket scientist for that one. CLR NOG BEXP and so on. NFLX: who r the 25% of float, brain dead morons, that r short this stock? MET PRU lots of sellers there on friday. HOT whoooaaaaa. MEE ya think the news leaked a little early? mister boring, DD, up a few cents.

Mr Lennon Hendrix's picture

Wasn't your title to last week's piece the same? 

Hess-North Sea cornered, wells on Bakken, exposure in el Sur.  What happens if the Suez shuts down?

ABX means a big X.

SLW they "stream silver" and the silver river has only begun running.

High grade corporate is going to suck the muster from the dollar's lips...corporate bonds will be the better buy soon, not government...the trade is going to flip...governments will go broke, all of them at once....

Disney is a buy.  The dollar is going to hyperinflate and Krugman will retire.  Easy pieces.  The 14th amendment will insure that whoever the Supreme Court wants will be President. 

Careless Whisper's picture

r u talking about that birth certificate thing? because there's a few states that r going to want to see it next time around or that name ain't goin on the ballot.

Mr Lennon Hendrix's picture

Is that, is that what you want ot talk about?

Well it happens that by the time America knows Barry was born on Mars or whatever, Barry will be elected President of the World by a comittee chaired by David Rockefeller and Hu Jin Tao.  But there is another side.  What if Scull and Bones outright stole poor Barry's BC?  What if he was born in Hawaii, but the proof was robbed?  Geranimo knows this story.

Careless Whisper's picture

we can talk later. i don't want to ruin your high.

Mr Lennon Hendrix's picture

Be speechless.  It is more becoming of you.

DosZap's picture

Either the Mayor,or the Gov, has searched ALL their archives, and flatley stated their is NO BC for O in Hawaii, and this man is one of O's biggest fans.

Lucius Cornelius Sulla's picture

Speculative momentum investing goes both ways ... and that is the only thing that has kept the bull alive.  Risk OFF!

lunaticfringe's picture

Short the POMO market?? Are you nuts??

Look I understand the traders broke the law on Friday and the markets tanked. This is just an aberration. Somewhere the Bernank is busy adding zeroes on his computer and making furniture in his garage.

A little early to be uttering eulogies, my friend.

11b40's picture

That is THE BIG QUESTION, isn't it?  If the hedges funds and mutual funds panic, can the Bernak print fast enough?  Can the PPT buy fast enough?  MOMO down runs faster than MOMO up.  Climbing the mountain is hard work.  Jumping off is really quick.

"Rest assured that come Monday, if the market gets smoked, the 19-year old video game console traders at TIAA-CREF, CalPERS, Fidelity, etc. will be forced to flip and go short as the FemBots will be screaming and shouting:

"If it's going down, short it!!!"

Zero Govt's picture

and as the Herd Funds, sorry Hedge Funds, stampede for the door, the PPT and The Bernanks beard will be crushed under foot. Ahmen to that  

NetworkError's picture

 

We’re at the stage where QE2 has been fully priced in and uncertainty about QE3 is setting in. From here, one might expect significant market declines to justify further easing, which is how Wall Street will get what it wants. 

 

Twindrives's picture

Relax Robo, your daddy Barack said everything is getting better.  Now be a good boy and go buy some more Amazon.