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Intraday Divergence: Numerous Broken Arbs Present Convergence Opportunities
The breathless pursuit of stocks has now led to a complete dislocation of all correlation pairs. The ES is about 7 points rich to AUDJPY and the historical correlation with the 2s10s30s butterfly is now a long memory. That said, if anyone wishes to take a non-direction bet on the market, contrary to what Batmanke is telling the entire US population to do, a convergence pair trade in ES and AUDJPY is the only thing that may make sense. In other news, hedge fund analysts are now obsolete, as long-short stock pair trades are now irrelevant: as of today, traditional high beta short names will outperform long positions until the end of the QE regime, some time in the 2020s.
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And the Dollar's on a highway to Hell...
Speaking of breathless....
The "Resilient Consumer" cannot be stopped
I bet the grocery stores will get crushed as input costs (foods) rise and a weakened consumer is price-sensitive and competition intensifies.
Really? So where will people buy food, then?
Um, look at the long-term charts for Supervalu and Kroger. Their profit margins are getting squeezed. Doesn't mean that they won't exist.
No one shopping at Whole Foods is price sensitive.
Disagree. I don't buy any staples there anymore. Just the prepared and unique items...
Based on your handle I think you should se shopping at another grocer for prepared and unique items.
? I didn't ascribe any value to my handle when selected. But if you can read something into it, please let me know...
Funny. "Trader Joe's" is a direct competitor to Whole Foods. That is what he probably meant. www.traderjoes.com
Yep. Only people who are obsessed with adding 3 more days of their life at the cost of highly inflated produce and food go to Whole Foods. I guess the yuppies have to do something with their cash...
Communist?
Excuse me, but I calculate 5.824 days of longer life.
So there. :>)
Unfortunately, the chicken noodle soup they sell has added only .3 minutes to my longevity. I better start on the General Tso's chicken next..
And no - I'm not a communist - but it's nicknamed "Whole Paycheck" for a reason.
The people that can afford it - good for them. Who are we to say otherwise.
Whoohooo! Now I too can't remember what P/E stands for!
http://www.youtube.com/watch?v=t8TIpYr1mc0
Did he really say that? Profit to Earnings ratio?
Actually that's the biggest Freudian slip I've seen in a long time.
How about some stocks whose market share isn't composed entirely of < 1% of the population?
I'm sure Tiffany's and Rolex are doing okay too, but it's still completely irrelevant.
Look at silver go!
Doesn't it just do good for the heart!
And a big giant FUCK YOU to JPM! Hope your balls end up the size of raisins when the squeezing comes harder and harder!!!
ROBO,
Isn't that a pretty big gap up? What is your opinion of these stocks with gaps in them and the necessary filling of those up and down low volume gaps?
Either the 4 hour boner goes down or you die. Either way there is back and fill.
Chart: ES and ZB
Heckuva job, Ben.
http://99ercharts.blogspot.com/2010/11/es-zb_04.html
http://www.zerohedge.com/forum/99er-charts
Look at the bright side. By the time we get to QE9, the FED will be buying 1989 Ford Pintos with 400,000 miles on them and pastel blue leisure suits from former disco dancing cokeheads who are now first in line at retiree early bird specials at the local diners.
feels frothy in gold and silver
lots of leverage sloshing around
could be some nasty margin calls coming up
So out of all of the overpriced markets out there, you think the one with fundamental value is the "frothy" one?
So, you think gold is "frothy"?
Wake me up when POG makes new highs in currencies other than US$'s...
http://www.taxfreegold.co.uk/highestevergoldpriceineuros.html
Note the table entries in bold.
It now feels wrong to refer to our markets as a casino, which implies the possibility of a loss. May I propose oriental massage parlor as an appropriate analogy equivalent to a sure thing, at least in nominal terms?
Just make sure you ask for the "happy ending"...
What happened to "sell the news"?
Are you telling me you did not realize that the whole "sell the news" by analysts was a set up? The sell off starts tomorrow ;)
Bubblez, bitchez!
In anticipation of the qe, I bought the following
SLV
SIL
GDXJ
GDX
they are all exploding. It is a very scary thing what is happening. How can a currency have a value when it gets printed with the push of a button. I know that everyone who reads this site knows that. But it really can't be said often enough. It makes no sense when the FED simply makes this money out of nothing and then tries to say it has value. We truly may be heading to Weimer. Maybe that is the only solution with the US debt, which means war. Chinese people slaved in all those factories for the last 15 years to produce goods, they got our dollars and now we are saying to them, you got nothin. We're dumping that currency and creating a new one. By the way, we will be generous and let you trade in 10 of those old dollars for 1 of the new ones. I know you lost 90% of the value of your money but what the fuck you going to do about it. We got nukes in Korea, Japan and have been surrounding your ass for the last 25 years. Fuck you!!!
It really is sad. Someone on a board mentioned yesterday "why would I pay my taxes if the same money can be created with a press of a button?". It's true. It no longer is a store of value.
As unemployment rises, local muni budgets get cut further, gross wages will continue to decline - even as living expenses rise. Interest payments to seniors decline.
Sad, sad, sad.
TJ
I saw that on a thread yesterday and I immediately said to myself that this is the beginning of the turn to hyperinflation, meaning a currency crisis where there is no longer incentive to keep the currency any longer than 5 minutes.
Notice that I said the beginning of the turn. There is a long way to go, but that turn "curve" is a exponential function.
Even the Kiwi is running with the big dogs
wait wait, zh is wrong again? no way!
the audjpy disconnect is wider...but looks like it is starting to try to close. Place your bets now.
Some (no longer) salient financial headlines today:
"jobless claims increase sharply"
"Retails report smallest gains in 7 months"
"Irish Bond spreads hit record"
"26th week of sequential outflow of domestic mutual funds"
"oil breaks $86/bbl"
"silver breaks $26/oz"
And my own (salient) headlines:
"Markets up worldwide as the rape of US middle class is officially sanctioned.....again."
"Plutocrats dance the Lindy Hop"
Welcome to the ultimate bubble.
did this trade converge? I don't have bloomberg, and my brokerage's charts skews these relatinships; otherwise, i'd check myself.
no not yet; probably in the depths of the Asian market it will get close at least.
Closed with profit after NFP rocketed AUD/JPY more than it did ES.
The QE game will continue into the 2020s?
I hope you're kidding! Though I admit to usually figuring events will occur sooner than they do, I simply cannot imagine endless QEs lasting another 10 to 20 years before the entire system explodes.
10 to 20 months, maybe. But 10 to 20 years?
Please say it ain't so!
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