This page has been archived and commenting is disabled.
Equities happy to track dollar down, not so happy when it roars right back up.
- advertisements -
Contact Information:
Tips: tips [ at ] zerohedge.com
General: info [ at ] zerohedge.com
Legal: legal [ at ] zerohedge.com
Advertising: ads [ at ] zerohedge.com
Abuse/Complaints: abuse [ at ] zerohedge.com
Suggested Reading:
Make sure to read our "How To [Read/Tip Off] Zero Hedge Without Attracting The Interest Of [Human Resources/The Treasury/Black Helicopters]" Guide
It would be very wise of you to study our disclaimer, our privacy policy and our (non)policy on conflicts / full disclosure. Here's our Cookie Policy.
REITs and Real Estate in general continue to be weak. However, rumor has it that Bernanke and Geithner have commissioned the construction of housing tankers to ship these homes from the United States to foreign lands.
Bubble has burther to deflate
Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
what is apparent is that whatever occurs during preopen trading gets undone, and then some, during regular market hours.
Except when the premarkets are trending toward the upside, then it gets exaggerated during regular market hours. That has been the trend since March.
Unless it's a blip in the data at around 9:14, looks like the VIX had quite a reaction to the turnaround of the dollar, but didn't translate to the rest of market...
RDN very was leading the market higher today...
The trouble with the destroy the dollar policy, is that crude will go through the roof, and nobody will want US debt. So utimately it backfires at some point.
You may be the first person to realize that a country with a 5% trade deficit may not do well with a weak dollar. The rest of the market disagrees.
The rest of the market bid the S&P up aggresively in late 2007, in fact it hit and all time high despite the credit problems being underway since the sumer. Why? Because the FED was going to cuts rates! How did that work out for them?
can someone explain to me rationally ( meaning pre-insanity market principles ) how is it possible that both the dollar and the equities co-relate the whole fucking day and all of the sudden " aaaaand it gone " movement occurs. please; some sanity ( and none of that demand for both equities and dollar bullshit )
Ever take a beachball and push it under water?
LOL, thanks, that makes sense.
I like that.
Cheeky,
Here's a thought. Could it be due to the Gold ETFs? Do they play daddy in the COMEX markets? I am not an expert on this but it would be nice to have other peoples opinions. It would surely play havoc with the correlations if that was true.
i dont know, im watching GLD and it went up in the beginning of the session and it seems like it didnt even notice the move in the dollar or the one the equities. it went up almost 1% and since then its been trading in +/- 0.25% range. This market is insane, and i have a feeling that one of these day Bernanke will drop all the balls hes been juggling with and shit will hit the fan. Its a natural occurrence for the gold(or derivatives) to go up after Asia tanked, and US futures were down almost 1 %, but i cant make sense out of the anemic trading the rest of the day. Shit is all disconnected.
Piling into a Cable short and a Sterling-Yen short sounds like a good idea to me. Though Shanghai Composite has a tendency of rebounding after a steep fall and then falling back. But given that both pairs are near the previously talked about resistance levels I may short some more in early morning Asia session.
Asian equities markets shall be my guide, London session shall provide the cog greesing.
Edit: something to watch out for tomorrow is the M4 money supply numbers out of UK tomorrow. Public Sector Net Borrowing (PSNB) will most likely have climbed to much higher levels than forecast, given that average forecast is just of 0.3B. However the real wild card is going to be Retail Sales figures ! Watch out for those... the slightly better Summer this year may make the Cable take a swing and give you a serious ball busting if you're short. Closer look at the MPC minutes suggests that M4 grew a fair bit so we shall see.
watch Industry and Financials, they are correlated most of the time and move not based on the US equities, but on Oil movements and dollar movements. they went down when either oil went up or dollar went down. Those will get crushed this night taking into consideration that the oil rallied 3.7% and Bernanke fucked the DXY. good luck with GBP/JPY trade.I was looking at chart of that and it seems far to volatile for me to play it. And i hate playing currencies; i got burned and stopped.
Thanks for the tip Cheeky,
See this link here - it's a long 1H chart of Cable.
Here you go... look at the top and bottom red line which shows the key points which have been played many times. I shall let history be my guide here. Though a break out is not impossible but given the recent renewed skittishness about the UK another leg down here does not seem totally out of the ball park.
It's those rose-colored glasses (MSM?) everyone's wearing, they have a polarity filter that filters out all the negativity from any new development in the market:
Dollar goes down = inflationary - our debt will be less of a problem and our margins increase! Yay, buy stocks before your dollar is worthless!
Dollar goes back up = now China and Japan's companies' profits rise, leading to their stocks to rise and since they are a leading indicator for the global economy - again YAY, buy stocks cause they're a great value!
Today, the USD started to sell off after the
EIA Petroleum Status Report came out
http://online.barrons.com/public/page/barrons_econoday.html?mod=b_hps_to...
Wall Street loves a falling dollar, since it pushes
up all commodity sectors and hence, stocks rally.
The Hedge-Fund industry, almost lost almost 50 %
of AUM during the last 12 month, so the power of de leverage
should be not as strong as it used to be. Even when equities
fell during the past sessions, the rebound in the USD was weak.
I believe we witness a distribution phase in equities, which will lead
to lower prices in the mid-term.
When people cry 'yeah beer...to the moon' through a risk-adj lens dollar suffers, when they cry 'yeah beer...to the moon' through an interest rate lens there's a bid. And then the opposite when they are crying in their beer.
Looks like we are seeing a resumption od risk and a sharp selling of the dollar
Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
A basic theory of mine that since the downward of the market, there was a large community of small time traders who rode whatever momentum that was prevailing in the market. This I guess became so large that they affected the major players who were having a controlled chaios(market keepers vs hedge funds). And that is what those sudden jerks (up or down) are designed for. Throw off small palyers and scater them around(if they all concetrate on one direction,then they become problem).
Pew pew
I love how the stock market jump and the jump in gold are almost EXACTLY correlated. I will take the latter , thanks.
Dollar-Equity or Dollar-Commodity trades show there is too much money chasing too few assets. Bernanke needs to forget about the CPI formula and just look at facts about repercussions of money-printing - bubbles and busts.
Another absurd day...Headfake of the year is going to be a spectacular unwind.
I always try to avoid Wed before options, especially in slow markets.
Any options pros around with an outlook on what to watch between now and Friday?
Off topic, but if you haven't read Chris Martenson's in-depth discussion of the FDIC's lack of money, I highly recommend it over at SA:
http://seekingalpha.com/author/chris-martenson/articles
Oh also Tomorrw (Thursday) the new credit card regulations go into effect. Just FYI
Thought that wasn't until 2010. Thanks for info.
I'm going by whatever Denninger posted on Tueday
Some stuff goes into effect Thursday, the rest in 2010./...
"Being in debt is about to get a lot more expensive for millions of Americans. Credit card issuers have been rushing to raise rates in advance of this Thursday, when the first provisions of the Credit Card Accountability Responsibility and Disclosure Act (CARD) will go into effect, with other protections starting in February 2010."
http://market-ticker.denninger.net/archives/1344-Will-It-All-Come-Tumbli...
Why the hell is the dollar going down? I thought Prechter alone commanded enough buying power to keep that baby up. Oops! Forgot that he lost his wad sitting in cash and/or shorting all those years (read DECADES).
lol Prechter has the right macro idea (economic disintigration)
But to think cash is superior to gold in the inverse pyramid of quality is silly I think. Yeah you gotta pay your bills in USD but think -- the purchasing power parity of someone on Social Security is going to increase by 10x? That I will make an equiv of $3000/week purchasing power parity simply by filing for unemployment benefits? Nonsense.
http://4.bp.blogspot.com/_cvdgPlEKW9k/ScghR-geLWI/AAAAAAAAAWc/uqwiv5ty50...
http://fofoa.blogspot.com/2009/03/all-paper-is-still-short-position-on.html
Mayhem your logic is sound but your assumption that social security is going to continue throughout this deflationary environment is faulty.
It also depends on the timeframe we're talking about here in the cash vs gold argument. I would think the last deflationary push brings prices low enough for the final privatization of this country and that might happen anytime within the next few years. After that privatization occurs, gold is king.
Grains ... our most exportable commodities are lower today with the weak dollar I guess we dont have enough basement traders in the grains or... the move in the dollar is BS?
Parts of the US are reporting bumper (record) crops so far, and China is is talking about going all-out to supply grains from their reserves this year.
But if they keep the dollar this low and push it further, traders will give up on the China bearish factor and let the grains run.