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ES Once Again Rapidly Diverging From Everything Risky

Tyler Durden's picture




 

And so the broader risk basket of AUDJPY, EURJPY, 10Y, 2s10s30s, gold, and oil once again rapidly diverges from the ES, which must mean that Citadel is busy processing FRBNY trade tickets on a FIFO basis. Expect the spread to close (buy the basket in a pro rata basis for an intraday correlation catch up), or not: all depends on just how aggressive Brian Sack is to indicate that life is good, wealth effect is wonderful, and the rapture is overblown. Bottom line: either play both legs outright in a pair combo, or sell ES for a FV 4 points lower.

 

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Fri, 05/20/2011 - 12:52 | 1295918 firstdivision
firstdivision's picture

Operation Bag Holder is in effect.

Fri, 05/20/2011 - 13:07 | 1295962 LawsofPhysics
LawsofPhysics's picture

Okay, who is holding the bag if this is a basket of fiat?

Fri, 05/20/2011 - 14:24 | 1296306 Jack Mehoff
Jack Mehoff's picture

The US retail investor. 

Fri, 05/20/2011 - 13:02 | 1295931 RobotTrader
RobotTrader's picture

Another U-Turn in stocks today.

Gotta grab your short profits fast, or the crocodile will snap his jaws shut and take your hand.  LOL...

S & P 500 is the envy of the world, pretty much outperforming everything.

Want proof?

It is about to breakout to new highs for the move in many foreign currencies.

SPY in Foreign Currencies

Yep, and the same with gold:

Gold in Foreign Currencies

My "Formula" remains 100% correct.

Gold $1,650 = Dow 14,000, and vice versa.

Now, if only my horrid gold stocks would get out of the gutter, maybe I can sell them and finally move out of this flea-infested 400 sq. ft. studio apartment overlooking the smoggy 101 Freeway....LOL...

Fri, 05/20/2011 - 13:06 | 1295954 Sophist Economicus
Sophist Economicus's picture

I don't disagree.  Fund managers, pensions, etc that are also worried about potential hyperinflation view the S&P and DOW as their safety net to maintain currency parity.

IMO, When the dust settles, both Gold and the major US indexes will be much higher in nominal terms -- and Gold will be higher .vis a vis. the indexes in real terms too....

Fri, 05/20/2011 - 13:13 | 1296004 LawsofPhysics
LawsofPhysics's picture

Why won't silver also go along for the ride?

Fri, 05/20/2011 - 13:35 | 1296062 GoinFawr
GoinFawr's picture

"Now, if only my horrid CHOICE of gold stocks would get out of the gutter all the people who bought in for the doubles, triples, quadruples and five baggers in that sector will stop laughing at me." There, fixed it for ya; you're welcome, though admittedly that last part is unlikely, given your record.

Fri, 05/20/2011 - 13:50 | 1296157 Abitdodgie
Abitdodgie's picture

I had a friend who lived in that area he said he was Silverlake adjacent, and he lived on Normal Ave .

Fri, 05/20/2011 - 15:28 | 1296513 geminiRX
geminiRX's picture

Summer doldrums approaching, which likely doesn't fare well for gold stocks (should be buying instead of selling). Although I do find the unusual call options on Kinross interesting today - perhaps it is getting set to bust out of it's evil channel (then I could make some mulla too)

Fri, 05/20/2011 - 17:49 | 1296858 SwingForce
SwingForce's picture

You rock, BKX proves INTL traders in driver's seat- they must love DOW stocks.

Fri, 05/20/2011 - 13:00 | 1295936 buzzsaw99
buzzsaw99's picture

Time to go all-in 3X long on a basket of Japanese banks bitchez!

Fri, 05/20/2011 - 13:47 | 1296154 slaughterer
slaughterer's picture

Japanese banks, huh?

Fri, 05/20/2011 - 14:28 | 1296310 buzzsaw99
buzzsaw99's picture

Tepco CDS too. And Euro banks, and PIIGS bonds. They're a steal! ;)

Fri, 05/20/2011 - 13:07 | 1295958 LawsofPhysics
LawsofPhysics's picture

Remind me why global currency devaluation won't fix this spread?

Fri, 05/20/2011 - 13:12 | 1295977 TapeReader
TapeReader's picture

Substantial buy program order flow momentum came into ES (S&P 500 e-Mini future) at the recent low onthe 17th.

The overall order flow momentum flipped to the sell progam dominance yesterday and has remained that way throughout today's session.

You can monitor order momentum in real-time (for free) for ES swing trading here

http://algofutures.com/wow-indices/wow-index-sp-500/swing-trading-chart/

and for ES day trading here 

http://algofutures.com/

Hope that you find this as interesting as I do.

 

 

Fri, 05/20/2011 - 13:35 | 1296098 earlthepearl
earlthepearl's picture

THNAK YOU for this post, fucking awesome

Fri, 05/20/2011 - 13:12 | 1295990 silberblick
silberblick's picture

Japanese governments FAQs for People Living Outside the Fukushima Evacuation and In-house Evacuation Areas

Click the link below to read an incredible work of misinformation that will surely--at a future point in time--become forensic evidence used in a lawsuit against TEPCO and the Japanese government for criminal negligence.

By using this document, the Japanese government is trying to talk down the Fukushima problem and assure people that there is absolutely nothing to worry about, which we know is total hogwash because even small dosages of radiation are said not to be safe (and the dosages Japanese are getting are NOT small). Some of the goggle translated 22 FAQs and answers include (read here):

http://fukushimadisaster.blogspot.com/2011/05/japanese-govts-faqs-for-pe...

Fri, 05/20/2011 - 13:23 | 1296035 chartcruzer
chartcruzer's picture

Tyler,  your the best,,  but it's not that large a divergence

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s164302276]&disp=P

Fri, 05/20/2011 - 13:23 | 1296037 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Thou shalt have EURUSD 1.42 for Friday. And though shall not see the SPX wither upon the vine, though shalt see the AUDJPY move in perfect synceth with the SPX.

And Lloyd saw it, and it was good.

-- The Book of Lloyd, Chapter 4.

Fri, 05/20/2011 - 13:27 | 1296057 qussl3
qussl3's picture

Full retard.

Silver not ramping up with equities is the tell.

Not long before the pigmen are fully positioned short.

Fri, 05/20/2011 - 13:31 | 1296061 jesus_quintana
jesus_quintana's picture

Tyler - how are you calculating your ES basket? Thanks

Fri, 05/20/2011 - 13:33 | 1296073 HUGE_Gamma
HUGE_Gamma's picture

yep im interested too

Fri, 05/20/2011 - 13:39 | 1296101 MiningJunkie
MiningJunkie's picture

PPT went to work at 11:00 a.m. EST and decided that we need a "strong close" in order to massage the "wealth effect"...

BUY BUY BUY...

Fri, 05/20/2011 - 13:51 | 1296180 slaughterer
slaughterer's picture

"...either play both legs outright in a pair combo, or sell ES for a FV 4 points lower."

I sold ES as soon as I read this, Tyler, but I am not buying gold for the catch up.  Let's see how this closes today.

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