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Goldman Explains Today's Futures Ramp

Tyler Durden's picture




 

In attempting to validate today's futures ramp, brought to your courtesy of government motors and The Sack, Goldman presents the main tangential factors, good enough for a media headline and adjoining irrelevant plotline. Amusing nonetheless.

1. Ireland is trading 40 tighter this morning.  headlines suggest some resolution is nearing (EU-IMF loan). Alongside this in the sovereign space, Spanish 10's and 30's cleared well enough.
2. Some relaxation or dissipation of near-term China tightening fears.  SHCOMP tested and bounced off the 50-day MA.
3. We have seen significant directional buying of European index futures (DAX, SX5E) and good overnight volume in ESZ0.
4. I can't resist.  NKY closes above the 10k level and the 200-day MA.  see attached chart of the banks.
5. The key level today for ESZ0 is 1193.50 -- the 21-day MA -- a move up and through should bring CTA covering and would basically close Tuesday's gap.

So there you have it - everything explained without one mention of Liberty 33 and/or Citadel.

 

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Thu, 11/18/2010 - 08:51 | 737285 Spitzer
Spitzer's picture

if gold doesnt break away from everything like it was doing then im going to get worried.

Thu, 11/18/2010 - 09:10 | 737323 UGrev
UGrev's picture

I still don't understand the event(s) that took it back down like this. 

Thu, 11/18/2010 - 09:29 | 737349 Tense INDIAN
Tense INDIAN's picture

if they can create 100 times more paper gold than Physical....they can also create 150-200 times.......likewise for silver

Thu, 11/18/2010 - 10:03 | 737440 UGrev
UGrev's picture

*face palm*. I don't know what my brain block was on this but as soon as you said paper, the bulb went on. 

Thu, 11/18/2010 - 08:53 | 737286 Leo Kolivakis
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Citadel, SAC, Renaissance, Soros and a bunch of other top hedge funds were busy buying solars yesterday. :) Told ya, buy the dips, Irish smoke has cleared and the power elite need to reflate & inflate!!!

Thu, 11/18/2010 - 09:18 | 737332 MeTarzanUjane
MeTarzanUjane's picture

It's hard to resist but I cannot buy solars until Goldman tells me to buy solars.

Thu, 11/18/2010 - 09:37 | 737374 dnarby
dnarby's picture

I am buying solars...  Panels that is.

I want to be able to play games on my Iphone once the power goes out and the generator gasoline is gone.

Thu, 11/18/2010 - 09:49 | 737400 MeTarzanUjane
MeTarzanUjane's picture

Play games? Dear Sir the games will be played on the streets. Real grand theft auto, and World of Warcraft. Get your practice in now your iFads will server as projectiles to scare away the rabid raccoons. Cell towers will be sniper towers to gather food(free range zombies).

Thu, 11/18/2010 - 09:32 | 737357 AccreditedEYE
AccreditedEYE's picture

Dear Leo: The beating you received over the past few days on your beta heavy solars is a taste of what's to come once all of the hype calms down and people realize that nothing has been solved except the printing of more worthless paper. Despite the "power elite's" wishes, the only cure for structural problems is TIME and asset deflation across multiple classes. Tread carefully and don't say this board didn't try to warn you!

Thu, 11/18/2010 - 08:52 | 737289 jbc77
jbc77's picture

Apparently in the span of 24 hours the European crisis has all been solved. Boy, sure glad thats taken care of.

 

The world markets are a fucking joke.

 

Thu, 11/18/2010 - 08:56 | 737296 Leo Kolivakis
Leo Kolivakis's picture

No the markets are whatever they are. Only joke is when people get all emotional about markets and relate 'fundamentals' to them. Liquidity will keep driving risk assets much higher.

Thu, 11/18/2010 - 08:57 | 737302 Boilermaker
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<roll eyes>

Thu, 11/18/2010 - 09:21 | 737337 taraxias
taraxias's picture

Don't roll your eyes, just skip reading his posts.

Leo is a fucktard perma bull who will find himself broke as soon as he realizes that "exit" point he thought was there is nothing but an illusion.

Thu, 11/18/2010 - 09:25 | 737342 doolittlegeorge
doolittlegeorge's picture

a "need for nuance" and "sophistication."  still..i like the pic--.  "in short--inflation doesn't work as a trade, either." and of course "compound interest compounding can make problems that we say don't exist suddenly appear and appear surprising."  of course "these problems are not surprising."

Thu, 11/18/2010 - 09:31 | 737353 unum mountaineer
unum mountaineer's picture

no, the real joke is you keep calling this a "market". I call it hamster meat wheel..run hamster run..soon you'll get where ever you're going.

Thu, 11/18/2010 - 09:51 | 737412 firstdivision
firstdivision's picture

..and it will also create higher inflation in commodities.  Glad to know India will explode in food riots soon, and Europe will become a hotbed of protests soon as well.  Additionally, I am sure people in the US are getting sick of seeing their costs at the stores go up while their wages (if they are getting wages) are frozen, or those on fixed income are getting killed.  It is becoming a Fed nightmare as they fueled speculators into bonds and now that bubble is bursting (which was fueled this year by POMO).  The Fed is inflating nothing but speculative bubbles with air, as sustainability is still now where to be seen at these levels. 

Thu, 11/18/2010 - 08:56 | 737297 qussl3
qussl3's picture

World markets are a game, play it like one.

Attempting to link markets to fundamentals at any sinlge point in time is likely to drive one nuts.

Thu, 11/18/2010 - 08:58 | 737305 Boilermaker
Boilermaker's picture

Agreed, but you won't be successful at it...unless you are the one changing the rules to the game to your favor in real time.

Thu, 11/18/2010 - 09:01 | 737309 sumo
sumo's picture

Da Boyz have covered their EUR shorts, so yeah, it's all good. Until they decide it's not.

Thu, 11/18/2010 - 08:56 | 737298 Boilermaker
Boilermaker's picture

I knew last night around 7:30 that I'd wake up to a triple digit open on the DOW and double digit SPX open.

I've seen this movie before.

The future buying spigot was opened directly after the closing bell yesterday and dripped through the night.  It's so awesome'y to see the futures climb a point, non-stop, everytime the bloomberg crawl bar flips to the futures.

Oh, the GM IPO is today...I almost forgot.  Probably coincidence....

Oh the fraud...It's so chic right now and all the rage.

Thu, 11/18/2010 - 08:57 | 737301 zhandax
zhandax's picture

So GS sings 'all's well on the euro front' so that JPM et al can pump up their margins on PM options expiration?

Thu, 11/18/2010 - 08:58 | 737304 Mark4124
Mark4124's picture

Buddy of mine just went to work for Citadel! :)

Thu, 11/18/2010 - 09:00 | 737306 Mark4124
Mark4124's picture

That bankrupt company Sears just blew it away again... more like blew it! Missed and guidance off by a mile!

Thu, 11/18/2010 - 09:00 | 737308 Boilermaker
Boilermaker's picture

Even TSLA is way up pre-market this morning...CLASSIC!

You know...it's almost as if they are messing with people on purpose...

Thu, 11/18/2010 - 09:04 | 737314 squexx
squexx's picture

I guess that means California's going to be fine, too. Governor Moonbeam, California and GM will lead the way to new prosperity. Yay!

Thu, 11/18/2010 - 09:08 | 737320 Leo Kolivakis
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Fidelity Investments’ Mark Notkin, whose high-yield mutual fund beat all rivals over the past five years, said the rally in junk bonds is over and stocks are a better buy:

http://finance.yahoo.com/news/Fidelitys-JunkBond-King-bloomberg-2254966937.html?x=0&sec=topStories&pos=6&asset=&ccode=

Thu, 11/18/2010 - 09:20 | 737334 Bill Lumbergh
Bill Lumbergh's picture

It's always a good time to buy...when were these guys ever bearish...most never saw the crisis coming since they were too busy on the golf course.

LOL

Thu, 11/18/2010 - 11:37 | 737705 TheProphet
TheProphet's picture

Or coked out in the Champagne room

Thu, 11/18/2010 - 11:37 | 737706 TheProphet
TheProphet's picture

Or coked out in the Champagne room

Thu, 11/18/2010 - 11:37 | 737708 TheProphet
TheProphet's picture

Or coked out in the Champagne room

Thu, 11/18/2010 - 09:56 | 737424 SheepDog-One
SheepDog-One's picture

Leo yea I guess in theory, one could also say a crap sandwich may be better than a rotting roadkill sandwich too.

Thu, 11/18/2010 - 09:15 | 737327 MeTarzanUjane
MeTarzanUjane's picture

Reston

Thu, 11/18/2010 - 09:18 | 737331 ZeroPower
ZeroPower's picture

GM IPO

Nuff said.

Thu, 11/18/2010 - 09:26 | 737344 jbc77
jbc77's picture

Yeah, I' so glad the European crisis was totally cleared up in the span of 24 hours. The global markets have become a fucking joke.

Thu, 11/18/2010 - 09:35 | 737345 DollarDive
DollarDive's picture

CNBC is off.  GM Hoopla makes me puke.  It'll be cool if it trades off .... gotta believe that the underwriters are going to push this to 40 or so, just long enough to make everyone stop paying attention. Then it'll start to tank.  

What I thought was interesting is the size of the package that they're talking to Ireland.  It's in the 10's of billions according to the WSJ.  That's nothing.  It's just enough to get the masses to think that that'll solve the problem.  It's a short fix.  Nothing is solved.....IMO

 

WSJ : http://online.wsj.com/article/SB10001424052748704104104575621952890262526.html?mod=WSJ_World_LEFTSecondNews

Thu, 11/18/2010 - 09:34 | 737348 sbenard
sbenard's picture

The SPY P/E is still above 45 for a dividend yield of only 2%! Stocks are priced for a MIRACLE! Irrational exuberence indeed!

Thu, 11/18/2010 - 09:33 | 737358 Miramanee
Miramanee's picture

I just bought 50,000 quatloos futures...I see a big bounce in the quatloos market today. BIG BOUNCE!

Thu, 11/18/2010 - 09:38 | 737376 the not so migh...
the not so mighty maximiza's picture

guaranteed green

Thu, 11/18/2010 - 09:48 | 737382 Saxxon
Saxxon's picture

Leo is correct.

Why the beetching, gentlemen?  That scorn is making you lose position.

I was just looking at my trading record.  I'm up 8% in my gambling account  since I started trading again in August.  My ONLY losses are short positions.  That's because I mixed emotion into the trade.  The long positions were put on in cold blood.  I'd be up 15% if I hadn't pulled my DGP and AGQ positions so damn fast to take profits - another emotional move. 

Jesse Livermore said it 85 years ago in Reminiscences of a Stock Operator;  "Do you want to be right or make money?"

Thu, 11/18/2010 - 09:50 | 737409 Bill Lumbergh
Bill Lumbergh's picture

I agree you need to put emotion aside and even at times fundamentals when trading.  This website serves as a great information exchange in terms of news and opinions.  However we still need to be aware of those fundamentals and not lull ourselves to sleep because markets are up.

Thu, 11/18/2010 - 10:21 | 737468 Saxxon
Saxxon's picture

100% Agreed Mr. Lumbergh.  I just hate to see otherwise very bright people dig in and not participate in rallies, however manbufactured they are, which they could see coming for days in advance, because of their attitude.  Been there, done that.

Thu, 11/18/2010 - 09:42 | 737386 Id fight Gandhi
Id fight Gandhi's picture

So eurrope is trading on hope that they'll break Irish into bank debt slaves?

Thu, 11/18/2010 - 09:49 | 737404 Kina
Kina's picture

The utter stupidity of all this bouncing back today is if Ireland comes out and says they might not take a bailout the whole show will collapse again. The whole market changed by a single phrase.

Thu, 11/18/2010 - 10:00 | 737436 SheepDog-One
SheepDog-One's picture

Hint at a sentence fragment bankrupt Ireland perhaps might do something which wont make any difference to their bankrupt conditions at all but still causes WORLD markets to ramp green PRE-market...and people are saying thats solid 'trading' data? LULZ! Its all degraded into a mental ward.
Its ALL about this stupid worthless GM IPO....Gubmint all-in, all stops pulled full nitrous bottle and gas pedal to the floor.

Thu, 11/18/2010 - 09:54 | 737419 notadouche
notadouche's picture

All the bitching about Cramer I can only wonder how much I would have made had I been as bullish as he has been as opposed to cautious and negative like many of the folks here on ZH.  Instead the one great day of put options will be totally wiped out this morning.

Thu, 11/18/2010 - 10:05 | 737446 SheepDog-One
SheepDog-One's picture

Totaly subjective- The market 'run up' has left many individual stocks tanked, the illusion of the overall market run up from DOW 6,500 to 11,500 looks impressive, yet in the real world achived nothing but a LOSS in purchasing power. All the bulls dance about the run up, ignoring that the actual result is negative.

Thu, 11/18/2010 - 10:02 | 737438 SheepDog-One
SheepDog-One's picture

Its all just about US Gubmint GM IPO, this worthless piece of crap. Got to go all out, pull all the criminal stops and make a good showing so as dump to as many bagholders as possible.

Thu, 11/18/2010 - 10:08 | 737448 Thunder Dome
Thunder Dome's picture

GM

Thu, 11/18/2010 - 10:41 | 737498 Clapham Junction
Clapham Junction's picture

GET THE BORROW ON GM!!!!!

Thu, 11/18/2010 - 10:40 | 737516 Clapham Junction
Clapham Junction's picture

GUYS- This Muni collapse has some serious legs.

Be afraid.

Thu, 11/18/2010 - 10:45 | 737524 ratava
ratava's picture

i must give them props for the eur/chf call. looks like a bottom until it doesn't.

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