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Guest Post: Comparing The 2007 Topping Pattern To Now

Tyler Durden's picture




 

From Tony Pallotta of MacroStory

Comparing The 2007 Topping Pattern To Now (Updated)

Remember one simple truth, 91.8% of ES Futures daily volume is attributed to day traders and computer algorithms. And since not one single person within that group uses macro data for their intraday trades then it is safe to say the market in the short term has little to do with pricing in macro economic data. Remember how the SPX peaked two months before the great recession actually began. That is not forward looking.

Market participants are already analyzing today's afternoon rally as a sign that this market is resilient, that the economy is still headed for a soft patch and that the bull is alive and well.

I beg to differ but instead would rather highlight two important aspects of this market I suspect is dictating price.
Shorts are scared and longs are delusional. Bernanke not only taught investors to buy every single dip he even has them convinced the removal of the Bernanke put (i.e. QE) has no downside risk to the market.  The move the past two weeks was foreseen by no one and hurt a lot of shorts while making longs feel smart yet again. Even a lot of macro bears were capitulating on the economic data the past two weeks.  That is until today.

The next and probably most important aspect of this market I suspect is psychology.  It's not technicals even in the face of some bearish patterns created today like island reversals. Nor is it macro data although the transitory weakness argument just got a whole lot more difficult to defend.

A number of times I have compared the current topping pattern to that of the 2007 pattern. The reason I suspect they are similar is for psychology during such times does not change. Longs don't want to surrender their money making machines. Shorts are eager to price in economic weakness and the argument about soft landing or recession grow louder.

The magical Point E may now be in for the current market. The similarities are striking of the move to point E in both 07 and 11.  A similar move also occurred in the treasury market as highlighted here. That wild move higher shakes a lot of shorts out of their position, pulls in the last remaining dollars from the longs before finally ripping lower leaving few on the train.

During these Point E's the macro data is confusing as well. For example the NFP reports (and ADP) right before the great recession showed a positive reversal in job growth.  I am sure the debate of soft patch or recession were just as loud then as now.

So if in fact Point E is in (the current chart is not updated with today's price but trust me it was lower) expect a pullback, one last sucking sound of doubt move higher and then hell breaking loose. Which by the way would be a lovely set up for the Bernanke Put round 3.

Lastly I suspect one additional thing keeping a bid in the market is the hope of a debt ceiling deal possibly as early as this coming weekend. How that is bullish is beyond me for it will result in the government agreeing to reduce up to $4 trillion in fiscal stimulus from the economy and easily could put the US back into recession.  Other than a bounce and removal of doubt as if there should be any on this matter there is nothing positive about a debt ceiling deal.

 

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Fri, 07/08/2011 - 18:08 | 1438490 Thorlyx
Thorlyx's picture

Bring it on !

Fri, 07/08/2011 - 20:48 | 1438812 doesmybuttlookf...
doesmybuttlookfatinthis's picture

Did you know John Kerry served in Viet Nam?

Fri, 07/08/2011 - 18:09 | 1438493 coppertop
coppertop's picture

Home prices to fall 40% ?

Fri, 07/08/2011 - 18:37 | 1438539 trampstamp
trampstamp's picture

No.. this time it's global debt defaults. That should make the housing bubble look like a fart bubble in the tub.

Timing is everything so it has to happen within the next couple of weeks for this pattern to play out lol!

Fri, 07/08/2011 - 18:50 | 1438575 Rynak
Rynak's picture

Debt defaults? We don't need a debt default - we can easily fix it.

Ladies and gentlemen, inspired by two posters in the thread about the "Reduce America's Debt Now Act", i've figured out a way how the USA can easily fix it's debt problem, and even become an export-addicted nation.

It works like this: In every city, we set up booths every sunday. Politicians are required to do "public service" during those days at those locations. The deal is: Groups of 20 people at a time, can make a bid of at least 5 dollars. The cash is used to reduce the debt. Everyone who did bid, may punch a politician in the face. The one who made the highest bid, gets to kick a politician in the nuts with steel toed boots.

Anyone, even politicians themselves, can make a bid. Tourists get four punches/four kicks instead of one, to promote tourism and get foreign capital into the country.

Of course, the problem is that other countries may copycat us. They may offer more days per week during which such events happen, or more politicians. Well folks, get with the time - in a global market with neither borders nor limits, sacrifices need to be made, to stay competitive. And the USA has an amazing opportunity here. It is, after all, the biggest exporter on the planet. Oh yes, it is, you just haven't noticed it yet, because we haven't capitalized yet on the ressource in question. We haven't understood our one true calling and destiny yet:

Crap.

No nation on the planet exports more crap than the USA.... political crap, cultural crap, economic crap.... it's a literarily endless ressource. And with all the crap, it turns out there is a lot of hate to be harnessed, against those who come up with all the crap. We don't need to stop with politicians... we could extend the scheme to economists, bankers, CEOs, MSM whores, and much more.... no one will be able to beat us! We could finance the entire USA just by punching and kicking the crap out of all the crap, all day - crap, which in turn we then finance from kicking it!

Fri, 07/08/2011 - 18:50 | 1438586 coppertop
coppertop's picture

wordy, improper subject definition, prepositional errors, structual imbalance. 

Fri, 07/08/2011 - 20:36 | 1438788 Thomas
Thomas's picture

Ouch.

Fri, 07/08/2011 - 20:50 | 1438814 golfrattt
golfrattt's picture

So, he gets an A- ....??

(based on Atlanta's grading system)

Fri, 07/08/2011 - 22:00 | 1438955 snowball777
snowball777's picture

Phrases, a listing of complaints, no sentence, STFU.

Fri, 07/08/2011 - 22:45 | 1439026 jeff montanye
jeff montanye's picture

misspelled structural too.

Sat, 07/09/2011 - 03:10 | 1439254 Fish Gone Bad
Fish Gone Bad's picture

+1

Sat, 07/09/2011 - 11:29 | 1439539 gmrpeabody
gmrpeabody's picture

+2

Sat, 07/09/2011 - 02:06 | 1439218 The Architect
The Architect's picture

+1

Fri, 07/08/2011 - 18:50 | 1438587 Long-John-Silver
Long-John-Silver's picture

I bid $1,000 to Guillotine any politician currently serving in Washington D.C.

Fri, 07/08/2011 - 18:53 | 1438600 coppertop
coppertop's picture

aren't you the arrogant ass that posts here like mad?

Fri, 07/08/2011 - 18:55 | 1438604 Rynak
Rynak's picture

No, that was your copycat account, called long-JUAN-silver.

Fri, 07/08/2011 - 19:15 | 1438633 coppertop
coppertop's picture

Colonel Grevious? Lord Vitahoba? Ginny Crack Corn?

Sat, 07/09/2011 - 10:27 | 1439473 dogbreath
dogbreath's picture

i still think you are on some heavy shit but I'm beginning to think you could be the best troll yet to show up around here.  don't be so shy.

Fri, 07/08/2011 - 22:13 | 1438979 JW n FL
JW n FL's picture

he is big into cutting heads off! I wanna stretch some necks!

 

I got rope!

 

it is easier to carry around that that big machine he has! but in all fairness I am willing to share my rope with him.. or others!

 

we might as well make it a party! they damn sure did when they gang raped us!

 

Prosecuting Acts of Treason can Be FUN!! tell a Friend!

Fri, 07/08/2011 - 19:58 | 1438730 Frankie Carbone
Frankie Carbone's picture

I'll raise that bid with $1,000 CAD. 

Fri, 07/08/2011 - 22:16 | 1438981 JW n FL
JW n FL's picture

OUCH! LOL!!

Fri, 07/08/2011 - 22:37 | 1439016 mt paul
mt paul's picture

175 yuan

Fri, 07/08/2011 - 23:40 | 1439122 ebworthen
ebworthen's picture

And I'll raise that to one ounce .9999 purity gold, Krugerand would have some form of poetic justice.

Sat, 07/09/2011 - 10:36 | 1439481 Ag Tex
Ag Tex's picture

The Krugerand is .9170 pure.  It and the Eagle (.9167) have separate alloy contents mixed in for durability, thus making them harder for garage refiners to melt and repurify.

Sat, 07/09/2011 - 18:36 | 1440319 ebworthen
ebworthen's picture

Damn metallurgists; I'll have to settle for .9170

Sun, 07/10/2011 - 09:32 | 1441179 Ag Tex
Ag Tex's picture

Just keeping it real.

Sun, 07/10/2011 - 11:00 | 1441265 mr_T
mr_T's picture

Buffalos .... Biatchezzz.....

Sat, 07/09/2011 - 03:13 | 1439256 Fish Gone Bad
Fish Gone Bad's picture

1000 quatloos.

Fri, 07/08/2011 - 23:42 | 1439125 Reptil
Reptil's picture

"And then he added a zero to the thousand."

http://www.youtube.com/watch?v=pmdAsL1n6q4

 

B'|

 

Sat, 07/09/2011 - 15:32 | 1440052 rosiescenario
rosiescenario's picture

...may I make another modest proposal which will assist both Federal and state governments in reducing their expenses and therefore, their deficits?

 

We should out source our prison system. This would immediately reduce their operating cost and, I dare say, the rate of recidivism. Let me go so far as to even suggest some of the Wall St. crooks might think twice if they were weigh the risk of being transported to outer Mongolia rather than to a club fed in Lompoc.

Sun, 07/10/2011 - 05:39 | 1441084 jharry
jharry's picture

You're a very funny person!  I laughed my butt off!  Thanks!

Fri, 07/08/2011 - 18:39 | 1438560 OS2010
OS2010's picture

Only 40%?  If they decrease by 80%, will people start buying houses for actually living in, again?

Fri, 07/08/2011 - 18:44 | 1438572 trampstamp
trampstamp's picture

Dam, I would buy 2 for my kids and the dog.

Fri, 07/08/2011 - 18:15 | 1438501 Sudden Debt
Sudden Debt's picture

All DOW stocks should trade at 10 X yearly dividend.

I wonder how many points it would still have :)

 

Fri, 07/08/2011 - 18:17 | 1438506 Robslob
Robslob's picture

The "D" word bitches

Fri, 07/08/2011 - 18:20 | 1438508 Jendrzejczyk
Jendrzejczyk's picture

Yen Crucifiction Device, what does your OUIJA Board say?

Fri, 07/08/2011 - 18:21 | 1438514 coppertop
coppertop's picture

Yes, no and maybe

Fri, 07/08/2011 - 20:12 | 1438751 Jendrzejczyk
Jendrzejczyk's picture

Mine spelled panic.

Sat, 07/09/2011 - 10:59 | 1439511 10kby2k
10kby2k's picture

Darts are much more accurate.

Fri, 07/08/2011 - 18:20 | 1438512 gorillaonyourback
gorillaonyourback's picture

whiskey bent and hell bound, time to start plundering the rich people around me, i got nothing to loose, go to jail get free room and board.   LMAO  its gitin, its gitin, its gitin pretty hectic.

Fri, 07/08/2011 - 18:23 | 1438518 coppertop
coppertop's picture

the barefoot bandit

Fri, 07/08/2011 - 18:26 | 1438522 gorillaonyourback
gorillaonyourback's picture

you wouldn't happen to have angelo mozzilos address would you?

Fri, 07/08/2011 - 18:30 | 1438535 coppertop
coppertop's picture

why?

Fri, 07/08/2011 - 18:32 | 1438540 gorillaonyourback
gorillaonyourback's picture

im appointing myself the head of the securities and exchange commision and lets say his ill gotten gains need to be taxed.

Fri, 07/08/2011 - 22:02 | 1438956 snowball777
snowball777's picture

so you're going to watch porn and ignore everything that orange motherfucker does?

Fri, 07/08/2011 - 18:24 | 1438520 rocker
rocker's picture

Excellent Work.  Looks like a possible down trend channel was formed today.  Again, great work! 

Fri, 07/08/2011 - 18:32 | 1438521 coppertop
coppertop's picture

The wizard knows the answer     :->

http://www.youtube.com/watch?v=hDO3sq9kHmY      


Electric Wizard - Vinum Sabbathi

Fri, 07/08/2011 - 23:43 | 1439127 ebworthen
ebworthen's picture

...well, I suppose he is playing an SG...but...

Fri, 07/08/2011 - 18:26 | 1438523 kevinearick
kevinearick's picture

Organic Chemistry

The action occurs among electrons, surrounding a society of self-replicating protons, which act as the gravity counterbalance, with a semi-neutral buffer. What happens when an external proton meets a free radical?

You want electron flow through a circuit to sustain productive work. Some of those electrons pair up. Where do all the electrons come from? What is a resistor? What is a resistor to the resistor? What is the effect of Family Law on the circuit?

Installing a one-way circuit, attempting to force electrons down that path, on time, with no return, is pretty damn stupid, if you are looking to open the NPV window for constructive employment. On the other hand, if you are looking for a big bang as your last instruction in the loop…

DNA has a built-in instruction set that casts off addictive bonds. What happens if you disable it for 3 generations, and poison the food supply, to create a world addicted to scarcity? You ever notice how people/organizations behave when the welfare checks get distributed? Notice the similarity in these rolling recessions? It’s hard to pay attention, much less anticipate, on drugs, in an automated pharmacy.

So, now I am in a town where the 75% NPV excess capacity is strikingly obvious, where they readily sell their kids to $10/hr labor, which is just enough to keep the “non-profit” slumlord loss-leaders. Do you know what it is costing you to store all those houses, boats, and cars crammed into the pipeline?

They must hoard. They cannot help themselves, because they are genetically predisposed to do so as they enter an economy where all the traffic lights with the same momentum are green, and all the lights in the other direction are red. Inflate prices 3X and place a 30% off sale in the window. The herd comes running every time, seeking something for nothing, which is the inverse of effective investment.

Up until now, the market could stay irrational longer than the individual could remain rational. That is no longer the case, because you have an exit, but the market does not. You cannot fix a stupid economy in real time. How do you want to transform all that excess capacity?

From the market perspective, land is dear. From the individual perspective, land is cheap, unless you have been led to believe you are an immobilized proton, which simply cannot face sunk cost.

 

Fri, 07/08/2011 - 18:30 | 1438536 coppertop
coppertop's picture

vague, nonspecific, disorganized

Fri, 07/08/2011 - 19:58 | 1438732 oddjob
oddjob's picture

gay,gay,gay

Fri, 07/08/2011 - 20:39 | 1438796 Thomas
Thomas's picture

And not like the organic chemistry that I am familiar with.

Fri, 07/08/2011 - 18:39 | 1438553 slewie the pi-rat
slewie the pi-rat's picture

what will the passengers do when they learn
that they've already paid for the gound?
on a southbound train
going dow-w-w-w--w-w-w-n...

[probably not recalled correctly, from a song by john kay]

Fri, 07/08/2011 - 19:17 | 1438640 coppertop
coppertop's picture

neber goink to hapen

Fri, 07/08/2011 - 18:51 | 1438589 Piranhanoia
Piranhanoia's picture

x or o, prepared or not, a closed loop or hot wire? AC or DC with a lot of amps waiting for someone to grab the wires and light a fuse.

Fri, 07/08/2011 - 18:26 | 1438524 ben_bernanke
ben_bernanke's picture

There is no comparison to 2007. On the first wave lower in 2007 after the exact top, it took just one month to penetrate the 200 day moving average. In this correction, they took two months to test it and not even break through it! Second, sentiment is about as low as it can get, which indicates the market may remain weak for a bit longer, but eventually it will power on higher. I'm kind of bearish short-term, but overall, the picture still looks strongly bullish.

Fri, 07/08/2011 - 18:38 | 1438558 MacroStory
MacroStory's picture

AAII bearish sentiment hit a 2011 low this past week.  Bulls are back in favor...

Fri, 07/08/2011 - 18:45 | 1438573 gorillaonyourback
gorillaonyourback's picture

harry wanger has an alias,  good selection of a name, ill bet you even have a helicopter too

Fri, 07/08/2011 - 21:41 | 1438910 ben_bernanke
ben_bernanke's picture

I noticed I have been "flagged as junk" and yet no one could refute any of my points. Sentiment is near 10 year lows when measuring put/call ratios for retail investors. But I expect nothing less from this site and the morons on it.

Fri, 07/08/2011 - 23:46 | 1439132 ebworthen
ebworthen's picture

Timmy?

The real Ben?

Krugman?

Anyways, a ponzi always works, until it doesn't.

Sat, 07/09/2011 - 08:16 | 1439352 The Axe
The Axe's picture

can you separate put/call volume by retail vs professional? I did not know that ? And if that is the case IE: (the old odd lot metric) that would be a perfect contra indicator. That retail is usually,,,no ALWAYS wrong. And you are way to sensitive about a couple of flags.

Sat, 07/09/2011 - 14:02 | 1439850 jackinrichmond
jackinrichmond's picture

hey, it's the best market money can buy.  

i love these guys that exclude the fact that the american people have been (unwittingly) propping up the stock marktets with TRILLIONS of $ in "quantitative easing".  

if the markets are so strong, then they shouldn't need fed handouts, right?

...but as we all know, the best cure for debt and overspending is more debt and more overspending.

Fri, 07/08/2011 - 19:51 | 1438718 Jendrzejczyk
Jendrzejczyk's picture

You inspire confidence in us all. Long live the Bernank.

Fri, 07/08/2011 - 22:43 | 1439025 Pez
Pez's picture

Hip Hip Bernank Hip Hip Bernank Hip Hip Bernank

Fri, 07/08/2011 - 22:46 | 1439027 Pez
Pez's picture

I think that means your mother goes down on filthy dogs in swahili.

Fri, 07/08/2011 - 18:27 | 1438526 virgilcaine
virgilcaine's picture

1929 sp div yld.. 3.40%

2011 sp div yld.. 1.75%

the sp is currently twice as overvalued as before the 'great crash of 29'.

Fri, 07/08/2011 - 18:42 | 1438567 gorillaonyourback
gorillaonyourback's picture

oh shit sounds like a buy signal right,  we do live in backwardation times right now, wrong?

Fri, 07/08/2011 - 19:25 | 1438657 coppertop
coppertop's picture

spellcheck fail

Fri, 07/08/2011 - 18:28 | 1438530 slewie the pi-rat
slewie the pi-rat's picture

The Big Whatever strikes again!

according to this plan, we have near-limitless possibilities, b/c no matter what happens, we can just keep doing it!

whatacountry!

Fri, 07/08/2011 - 18:38 | 1438556 YesWeKahn
YesWeKahn's picture

This time is different. What people don't talk about is this panic mode the US government and the fraud reserve have been on since 2008. Remember this: all they care is to get a job (reelected).

Fri, 07/08/2011 - 18:38 | 1438559 kito
kito's picture

everyone with a chart is right until theyre wrong. 

Fri, 07/08/2011 - 19:53 | 1438725 Jendrzejczyk
Jendrzejczyk's picture

Why bother with the period?

Fri, 07/08/2011 - 18:43 | 1438565 fiddler_on_the_roof
fiddler_on_the_roof's picture

Any ZH zombie who things S&P is going to drop, will be castrated.

Let's see who is going to be right ?

 

I am practising my "penis withdrawal" technique to get out before miners are nationalized in my family retirement account.

I am using this foul language because it is Friday and I am drunk.

Fri, 07/08/2011 - 18:44 | 1438570 mynhair
mynhair's picture

Spelling, Dude.  Act like an edicated ZHer.  Cheers!

Fri, 07/08/2011 - 18:49 | 1438583 fiddler_on_the_roof
fiddler_on_the_roof's picture

Please don't use "dude". That's the worst insult, worse than a bastard.

Hmm.. forgot bastard is a eulogy in white culture, no meant western culture.

Fri, 07/08/2011 - 18:52 | 1438596 mynhair
mynhair's picture

Ah, shoot!  Don't get to play the race card, so 2 no trump.

Fri, 07/08/2011 - 19:33 | 1438617 fiddler_on_the_roof
fiddler_on_the_roof's picture

I was aged 25 in 1998, just came to US and had a nice Italian-American as my roommate and I told a native joke about western culture  to him.

"A man and wife sitting, wife telling her husband - "your children and  my children are playing with our children". He asked me where is the joke".

I felt like a flaccid penis. He could not understand the joke.

 

Fri, 07/08/2011 - 18:48 | 1438578 trampstamp
trampstamp's picture

You need to first practice pulling out the one you have in your ass. I'm drunk too... sorry for the foul language.

Fri, 07/08/2011 - 18:42 | 1438569 mynhair
mynhair's picture

Algos don't give a slewie-rat's ass about point E.  The spice must flow.

Fri, 07/08/2011 - 18:46 | 1438579 coppertop
coppertop's picture

ever crap a jalapeno?

Fri, 07/08/2011 - 18:51 | 1438591 mynhair
mynhair's picture

Duh.  Grow my own.

Fri, 07/08/2011 - 19:15 | 1438636 cosmictrainwreck
cosmictrainwreck's picture
by coppertop
on Fri, 07/08/2011 - 18:53
#1438600

 

aren't you the arrogant ass that posts here like mad?

Fri, 07/08/2011 - 19:19 | 1438641 coppertop
coppertop's picture

why it's so, so, cosmic

Fri, 07/08/2011 - 22:03 | 1438958 snowball777
snowball777's picture

looked just like you too.

Fri, 07/08/2011 - 23:54 | 1439139 ebworthen
ebworthen's picture

mynhair

Governor Harkonnen and his cronies demand it.

"Spice!  More Spice taxpayers!  Toil, toil!"

Fri, 07/08/2011 - 18:46 | 1438580 mynhair
mynhair's picture

It's all about the debt limit.  Raise it, the spice will flow copiously.

Don't raise it, and hope springs that normality will resume.

Both bullish.

Err, the S&P is still undervalued, right?

Fri, 07/08/2011 - 18:47 | 1438582 coppertop
coppertop's picture

If you think it's going higher it is

Fri, 07/08/2011 - 18:50 | 1438588 Sam Clemons
Sam Clemons's picture

Talk about grasping at straws.  The market never broke the 200 day moving average this time.  That time it broke it and then TRIED to rally back above it, and failed a few percentage points above it.

In my opinion, if anything, this looks more like the middle point of the chart.

Fri, 07/08/2011 - 18:51 | 1438592 caerus
caerus's picture

I was just thinking today that it looks like ES is putting in a nice triple top...

Fri, 07/08/2011 - 18:55 | 1438603 coppertop
coppertop's picture

better hopey cause there aint no such thinky as a quad top bubba bear

Fri, 07/08/2011 - 18:58 | 1438608 caerus
caerus's picture

agreed...either way i think ill err on the side of caution...no short positions i'll b happy to sit on the sidelines and watch after '07

Fri, 07/08/2011 - 18:53 | 1438599 High Plains Drifter
High Plains Drifter's picture

oh goody.

 

time to look at charts...

 

 

Fri, 07/08/2011 - 19:00 | 1438611 mynhair
mynhair's picture

O/T

Salud!  A toast to the end of America in space!

Now all those non-existent funds are available for more SNAP!

http://www.escapistmagazine.com/news/view/111545-Police-Called-After-Ban...

Fri, 07/08/2011 - 19:01 | 1438613 DavidDavid
DavidDavid's picture

I get such a "kick" out of these pundits like Durden trying to pick a top in the S&P.  We're not even close to a top, people.  I'm 200% long the market with mini dow & mini s&p futures.  I've been long since Dow 7350 back in 2009.  The Dow is headed to 15K by Q1 2012.  The Fed clearly wants the equity market to go higher.  It amazes me all the fools that try & fight the Fed by shorting the stock market.  How foolish.  I'm long and I'm lovin' it.  Dow 15K is on its way!

Fri, 07/08/2011 - 22:35 | 1439014 mfoste1
mfoste1's picture

nah mayne, its going to 16k

Sat, 07/09/2011 - 13:08 | 1439720 tarsubil
tarsubil's picture

You admit that it is fixed by policy and not the market and then pretend like you can read the minds of those in control. What you're doing is called betting and it is exactly what the shorts are doing.

Fri, 07/08/2011 - 19:06 | 1438620 SwingForce
SwingForce's picture

Nice work, Tony- thank you for sharing!

Fri, 07/08/2011 - 19:15 | 1438635 TexDenim
TexDenim's picture

These parabolic upswings look so much like the 1930s. Healthy markets don't behave this way. Scared, panicked markets do. Beware.

Fri, 07/08/2011 - 19:20 | 1438646 cosmictrainwreck
cosmictrainwreck's picture

Agreed... as applies to what used-to-be "the market". Yeah, there's panic - the assholes are scared shitless they might miss out on that extra $0.15 x 10,000 on the next few trades. Fuckwads. Sadly, they've already made so goddamn much, a 10% 15% 20% drop/sell-off is, like, "meh?" 

Fri, 07/08/2011 - 19:26 | 1438652 coppertop
coppertop's picture

and you are worth listening to because you remember the 30s?....or you are 30?...or you are a greeter at the Chase branch in Adelanto?

Fri, 07/08/2011 - 19:50 | 1438714 mynhair
mynhair's picture

Market?  What's that?

"Your Algo wears combat boots."

Fri, 07/08/2011 - 19:36 | 1438679 coppertop
coppertop's picture

is it a virus?

Fri, 07/08/2011 - 19:33 | 1438673 MarcusAurelius
MarcusAurelius's picture

Youo know this is mind boggling that people even remotely consider that this is anything but a dead cat bounce. What recovery in the past fifty years was quatitative easing used? What recovery had unemployment this high and with no end in sight? What recovery had consumers in so much debt? What recovery happened with no corporations hiring and afraid to hire. What recovery happened where proper accounting was thrown out the window? What recovery was there where housing was contracting like it is still? I mean this is as obvious as the sun rises that governments are dealing with a global depression becuase of debt. It won't be solved until the debt is purged.

Fri, 07/08/2011 - 19:51 | 1438719 mynhair
mynhair's picture

Debt is the spice.  It must flow.

And fuk off with this dead cat cit!

Fri, 07/08/2011 - 21:24 | 1438858 dwdollar
dwdollar's picture

You said it right there.  No recovery has had those characteristics.  None.  Quite opposite actually.  Those characteristics (or their historical equivalents) are attributed to declining civilizations and/or empires.  This 'market' and economy is nothing but a  shared delusional fantasy.  A grasp at a former glory.  Old geezers figure it to be like the '30's.  Baby-boomers figure it to be like the '70's.  Young punks don't have a clue.  I hear this a lot... "Oh it will come back.  It always does..."  Yeah right.  Famous last words.

Fri, 07/08/2011 - 19:35 | 1438676 Smiddywesson
Smiddywesson's picture

Topping pattern, shmopping pattern.  Tech analysis used to have predictive value.  That's before it became widely used.

Today, it is still critical for your measurement of what the market is doing, but those who are forcing the markets to do what they want can change their minds at any second, leaving your tech analysis as predictive as goat entrails.

Worse, it can be used by those who want to trap you in a trade, just as they use fundamental news.  So it's predictive value has dropped to zero (sub zero).

To make an analogy, technical analysis is akin to your vision, it is a sense to measure what the market is doing.  However, your eyes cannot be alowed to make your trading decisions or you will lose all your money.  You are trading against cunning criminals who know your methods.

Take the astrology traders as an example.  They do pretty well.  Either it's because astrology has some scientific basis to it, or as I think, their methods are so completely wacked out that the sharks are not trailing them.  

Good luck with those patterns.  I use them too, but I don't ever trust them. 

Fri, 07/08/2011 - 19:44 | 1438684 coppertop
coppertop's picture

Try Scientology. IT WORKS!

See more HERE :--->

http://www.youtube.com/watch?v=hDO3sq9kHmY

Fri, 07/08/2011 - 20:22 | 1438765 buzzsaw99
buzzsaw99's picture

jesus fuck. do you intend to pollute every thread with fifty seven comments? STFU ALREADY!!

Fri, 07/08/2011 - 20:45 | 1438804 trampstamp
trampstamp's picture

+1000000

Fri, 07/08/2011 - 22:07 | 1438967 snowball777
snowball777's picture

Replace the 'junk' button with an 'STFU' and enough votes gets you banned (pick a number, batteryboy will hit it in no time flat).

Fri, 07/08/2011 - 23:53 | 1439140 CD
CD's picture

Hey guys, think a little about the Turing test. I have a strong suspicion we have an actual, real-live algo in our midst. Kinda primitive, responds to simple keywords related to the topic (see reaction to 'undervalued', large block posts of more than one paragraph, reaction to link posted, etc.) Now THIS is an account Tyler/Sacrilege should look into. Have you seen any multi-sentence reply from this account? Possibly just the handler doing the algo testing intervening, if so. No, this is a responsive, text recognition algo, constructing a response that attempts to be contextually tied to posts, based on pre-determined rules and patterns. I suspect it is also learning. See the sticky thread by Simon Black on boiling frogs.

It is just good enough to fly under radar as an annoying/weird ZH reader or outright human troll -- but never inflammatory enough to be called out as such. 

Sat, 07/09/2011 - 00:48 | 1439175 Bolweevil
Bolweevil's picture

Call it an algo and poof. Gone. Or did it/he jump threads? Frickin weird even for algo.

Fri, 07/08/2011 - 19:49 | 1438708 monopoly
monopoly's picture

copertop,. If you do not like what we say or do not agree with us....You can move on to the Yahoo financial board.

Fri, 07/08/2011 - 19:52 | 1438723 mynhair
mynhair's picture

I suggest MW.  See if you can beat my 6 hr bounce record.

Fri, 07/08/2011 - 20:15 | 1438752 RobotTrader
RobotTrader's picture

Virtually every "expert" predicting an end to this run has been wrong.

To quote Bob Brinker:  "Never before have so many been so wrong, for so long..."

I'm ready for anything, bull or bear.

But when:

- Retail stocks are outperforming

- REITS are outperforming

- High grown consumer stocks are outpeforming

- Financials are in a two year trading range and cannot break down

- Panic bids into Treasuries occur on the slightest whiff of a selloff

- Short rates are near world record lows

- Stocks have had a 100% run off the lows in face of horrible news from every corner of the globe

I'd say the momentum is on the side of the bulls, and guys trying to pick long term tops are engaged in what Brinker calls "A Fool's Errand"....

Fri, 07/08/2011 - 20:32 | 1438781 cosmictrainwreck
cosmictrainwreck's picture

Well, it pains me deeply to have to say this, Robob... but you're right. Anybody "looking for" (as in forward), or predicting, a "top", short-term or long, is hopeless. You can't seeee the mofo till after the fact. It cannot even exist without the going-up & coming down on either side. It's gonna be just like all your charts of "winners"..... rear-view mirror stuff

Fri, 07/08/2011 - 21:12 | 1438853 Smiddywesson
Smiddywesson's picture

I think you misread Robo's post, because although Robo said he is ready for anything, he went on to list an argument for the bull side.

Case in point: " Financials are in a two year trading range and cannot break down"

Absolutely hilarious Robo.  We somehow convince ourselves of what we already want to believe.  Hey, if I'm wrong and Robo is really saying this pig can go in any direction, I have to admit it can.  But when anyone says the picture is rosy, I say they are completely on vacation in Hellow Kitty Island.  This abomination of a market is an avalanche perched over Whoville, and sooner or later, all the little Whos will go "Boo Hoo, Hoo."

That is a sound I simply must hear.

Fri, 07/08/2011 - 21:19 | 1438872 Smiddywesson
Smiddywesson's picture

I think you misread Robo's point, because although Robo said he is ready for anything, he went on to list an argument for the bull side.

Case in point: " Financials are in a two year trading range and cannot break down"

Absolutely hilarious Robo.  We somehow convince ourselves of what we already want to believe.  Hey, if I'm wrong and Robo is really saying this pig can go in any direction, I have to admit it can.  But when anyone says the picture is rosy, I say they are completely on vacation in Hellow Kitty Island.  This abomination of a market is an avalanche perched over Whoville, and sooner or later, all the little Whos will go "Boo Hoo, Hoo."

That is a sound I simply must hear.

Fri, 07/08/2011 - 21:56 | 1438946 rocker
rocker's picture

Robo has been right. But the real question is why. Hmmmmmm

Today after the close Maria from CNBC had a interview with one of their financial analyst. He said that GSachs and JPMorgan will have diminishing earnings because of the lack of volume in the markets. He said they will not make any money because they are just trading between themselves. Robo to Robo.  LOL on that.

Fri, 07/08/2011 - 20:46 | 1438805 AldousHuxley
AldousHuxley's picture

It is too late but you could have shorted NBG.

Fri, 07/08/2011 - 21:28 | 1438886 mynhair
mynhair's picture

...but I trade NBG!  My other fav is MTU.

Fri, 07/08/2011 - 20:53 | 1438821 banksterhater
banksterhater's picture

You forgot 2nd highest RECORD MARGIN DEBT and highest corporate debt @ $7 Trillion in history, better post some boobs before you are completely ignored.\ Robo.

Fri, 07/08/2011 - 21:02 | 1438836 Smiddywesson
Smiddywesson's picture

But when: - Retail stocks are outperforming - REITS are outperforming - High grown consumer stocks are outpeforming - Financials are in a two year trading range and cannot break down - Panic bids into Treasuries occur on the slightest whiff of a selloff - Short rates are near world record lows - Stocks have had a 100% run off the lows in face of horrible news from every corner of the globe

I'd say those things apply equally well at the top of a bubble so excuse me if I am not convinced.  

Fri, 07/08/2011 - 22:40 | 1439021 kito
kito's picture

Robos right. Market has got legs and its the only thing keeping ben from pulling the qe trigger.

Fri, 07/08/2011 - 23:37 | 1439110 Cursive
Cursive's picture

@kito

Market has got legs of Captain Dan from Forrest Gump

FIFY.

Fri, 07/08/2011 - 23:32 | 1439100 Cursive
Cursive's picture

@Robot

Who are these bulls you speak of?  There are only a bunch of hedgies and momo chasing monkeys.

Remember one simple truth, 91.8% of ES Futures daily volume is attributed to day traders and computer algorithms.

 

Sat, 07/09/2011 - 00:37 | 1439165 Vic Vinegar
Vic Vinegar's picture

In my rebellious years (say 1994, as a 17 year-old reading Rush Limbaugh books to fight against my Democrat parents) somebody would have told me:

"In 2011, the key to making money will be respecting computer algorithims" I would have looked at them with a blank face full of zits.  Yet whoever would have told me that would have been a genius.

Well, Cursive, there are more than a few geniuses here at Zero Hedge.  One of them just happens to be RobotTrader.  Expect it and respect it.

Sat, 07/09/2011 - 00:50 | 1439176 Bolweevil
Bolweevil's picture

If robot is a genius then Vic is a groupie?

Sat, 07/09/2011 - 01:04 | 1439185 Vic Vinegar
Vic Vinegar's picture

Yes.  Admittedly I had to go through some things to get to this point, but when it comes to Zero Hedge, I am a disciple of RobotTrader.  

One more time, with feeling.  I Love L.A.:

http://www.youtube.com/watch?v=BBOQiMxwk1o

Trade this shit, bitches.

Sat, 07/09/2011 - 09:13 | 1439390 Cursive
Cursive's picture

@Vic Vinegar

 I am a disciple of RobotTrader

I am happy for you.  I only hope that your journey of self discovery is complete and that you are a full man now.  You appear to be searching for something that you were not graced with at birth and you have found that first in Rush Limbaugh and now RobotTrader.  Who is to say that Mao wouldn't have floated your smarmy little boat back in the day?  I don't have these deficiencies that you speak of and I don't need Rush Limbaugh or RobotTrader to complete me.  But, good for you, Vic, and good for them; every hot air ballon needs molecules to exite and you are there for them.

Sat, 07/09/2011 - 10:47 | 1439492 Vic Vinegar
Vic Vinegar's picture

I'm happy for you too man.

In any case, my grandfather who worked in the coal mines and gambled for fun would have called us both fags for even commenting on the internet to begin with.

New world order bitches, expect it and respect it.  You 'good guys' can keep trying to figure out how to solve unsolvable problems.

Sat, 07/09/2011 - 10:58 | 1439508 Vic Vinegar
Vic Vinegar's picture

Logging off now so here are some final thoughts:

I don't need Limbaugh or RT to complete me.  It appears, however, that based on your avatar you need to cling to the past.  A past that didn't exist the way you pretend it did.

But I wish no ill will to you.  We are all just trying to get by and have a little fun along the way.  If you want to change the world, good for you.  Go for it - just remember that internet commenting doesn't count.

http://www.youtube.com/watch?v=bng3agUOYiI

Fri, 07/08/2011 - 23:40 | 1439121 bakken
bakken's picture

My game plan is to stay with the Bull until I feel that the economy/political scene/Greece etc. has returned to normalcy, then short the shit out of all my positions in an AutoContrarianPutFest!

Mon, 07/11/2011 - 10:41 | 1443652 LooseLee
LooseLee's picture

Just goes to show you how most Bulltards live in a fantasy world and that the 'market' is not "free" or forward-looking. You just confirmed most 'intelligent' suspicions about how this market remains elevated. Once 'intelligence' begins again to operate...look out below.....

Fri, 07/08/2011 - 20:26 | 1438770 dcb
dcb's picture

one of the things I noted, and I don't like your comparison times. is that after the flash crash we had a bounce. the bound up to this height (until yeasterday) was the height of the bounce after flash crash. But as you I admit I mentioned 1320 as a critical point, and that was my prior target point. that was only one channel. there was also channels in crude, the dollar index (udn, uup) and emerging markets. which did a much better job of showing the top yesterday. I have to alter my s and p chart a bit.

Fri, 07/08/2011 - 20:50 | 1438816 banksterhater
banksterhater's picture

I see complete complacency, nobody is taking profit, except me down to 2 holdings, preferreds, I'm AMAZED the lack of profit-taking not seen this in years, this psycology the bounce will automatically occur. 99% of retail are complete morons.

Fri, 07/08/2011 - 23:03 | 1439047 Sam Clemons
Sam Clemons's picture

Except the retail traders who stayed long the last two years.

 

New money is the only thing that matters, and there ain't a shortage of dollars no matter what the deflationists tell you.  Even M3 is growing again.

Fri, 07/08/2011 - 21:06 | 1438844 onlooker
onlooker's picture

I read for the input of the smarter forks here. I have a question maybe someone can answer. If the Fed prints the money and knows it is devaluing with every bill it prints, wouldn’t the Fed put the money into something that would hold value for a longer time than the greenback. If stocks and commodities are the items, how can they go down if the Fed is willing to continue with the printing. Can this go to infinity or is my question wrong?

Fri, 07/08/2011 - 21:22 | 1438877 Smiddywesson
Smiddywesson's picture

Well, there is always gold, which they are buying hand over fist, that we know about.

Much of the money they have printed is locked up as well as they can to avoid creating inflation, but that has become inevitable.

Gold.  nuff said

Fri, 07/08/2011 - 21:29 | 1438888 mynhair
mynhair's picture

Here's $5.  Dig an ounce outta yer ass fer me.

Ag, bitchez!

Sat, 07/09/2011 - 05:09 | 1439294 Shell Game
Shell Game's picture

Agreed.  There's a damn good reason CBs vaults store Au and do not store Ag.  They know the endgame and transition to real money is unpreventable and near.

Fri, 07/08/2011 - 21:55 | 1438943 nemome
nemome's picture

"he move the past two weeks was foreseen by no one"

 

Sorry Tyler, one too many shots to the head.  The Effective Volume website run by Pascal Willain offers two "Robots" one for the IWM and one for the GDX.  The IWM robot gave a buy signal on or about June 9th...so, yeah, it was forseen.

Fri, 07/08/2011 - 22:14 | 1438980 snowball777
snowball777's picture

Keep followin' those blind chickens!

Fri, 07/08/2011 - 23:22 | 1439080 Sam Clemons
Sam Clemons's picture

Same for my site.

Fri, 07/08/2011 - 21:56 | 1438948 nemome
nemome's picture

"he move the past two weeks was foreseen by no one"

 

Sorry Tyler, one too many shots to the head.  The Effective Volume website run by Pascal Willain offers two "Robots" one for the IWM and one for the GDX.  The IWM robot gave a buy signal on or about June 9th...so, yeah, it was forseen.

Fri, 07/08/2011 - 22:06 | 1438968 MacroStory
MacroStory's picture

A buy signal and a 7% move up in 8 days or 40 basis point move lower in treasuries over the same time frame was not foreseen by anyone. There is a big difference.  

Sat, 07/09/2011 - 12:03 | 1439575 nemome
nemome's picture

Not true...all you had to do was look at the charts, and if you had plotted multi-time frame pivot points, you would have seen the simple resistance levels we reached.  Quickly , yes, but in the reduced volumes of the Summer, if there is lower supply to sell, which there is, it is easier to move prices upward.  The move is not that much greater than the one between the 14th of March to the beginning of April.  Also, you have earnings season starting this week which is prognosticated to be positive, so this could be technical positioning by players with that in mind.  As for treasuries....terrible auction a couple of weeks ago...let's face it governments are printing toilet paper....so, money going into successful on-going concerns (companies) or the two-ply shit governments are selling...big duh to me.

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