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The Market X-Files: July 23 Edition
Today's curveball: Now VIX is directly correlating with stocks. Last time that made sense was, well, never, even though it happened just over a week ago. The Black Swan reverse migration is the market melt up this time around.
And the meltup in equities continues even as Vol and Dollar are telling HAL9000 to slow down. Skynet is now sentient.
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HOLY !@#!! Treasury Auction Schedule (Denninger)
http://market-ticker.org/archives/1256-HOLY-!!!-Treasury-Auction-Schedule.html
Time to short spx!! Today's 2% gain is a GIFT from all the perma-bulls. Of course....that advice only makes sense before the market started to have meltups instead of meltdowns....
Regading the Auction schedule, is there a way to know how much of this is a rollover of maturing Treasuries versus how much is new?
This is showing to me the only thing to buy is SDS QID SRS FXP opinions welcome.
Haven't you tried that already?
Working perfectly.
I'm losing money faster than ever!
same here... can i get a bailout please? i know a guy that knows a guy who gets his drycleaning done by a guy that also drycleans clothes for a guy that works for goldman....
I have values for vxn, vix, rvx and vxo and they are all going higher! Really really weird seeing those green with everything else green, oh apart from CIT of course, but who cares about that.... under a dollar...
so long as the HFTs can front-run the orders ... they gently sell into rallies to lock in gains then offer more demand than supply when they see sellers and shorts try to enter the market. under those conditions it goes where they want it to.
When do we exhaust all permutations of market occurances, so we kill the phrase "This has never happened"?
It seems like everytime those words are uttered, it happens!
Debtor, this has happened before. It just doesn't happen very often.
"It just doesn't happen very often" seems to be occurring more frequently.
When do these events move across deviations?
Maybe there should be a new arbitrage, model arbitrage. If I know which factors you weight the least (less frequently), I can distort those market events to occur more and blow you up.
Very good point, and I think you are witnessing it happening.
If this keeps up, Drill! Drill! Drill! will become a 2010 campaign issue.
Massive short covering rally today. Looks like all the shorts are getting blow out.
Yes like all those that looked at those appalling jobs numbers and saw reality... but GS knew that the housing figures would be 'okay' so time to have a massive squeeze past the key numbers on the S&P and get suckers to buy the breakout.
As if the housing market is soaring... yeah sure...
Who told you a short covering rally, CNBC?
If it was, stop listening to them!
If I could buy today what I knew would be worth more in the FUTURE, what should I do!?
Will everyone agree on it's worth(value) tomorrow? "One man's treasure is another man's junk"
What happens after tomorrow? Two weeks? One month? One Year?
Some questions to ponder.
so your rationale for buying stocks is based entirely on the premise that someone will pay you more for it in the future. not on fundamentals, not on a stream of cash flows, not on an intrinsic value. the fact that you think some moron will pay you more than you paid someone else. GREAT THINKING. bigger fools got us here, took us to the bottom, and are bringing us right back up. the short memory of everyone piling into assets with reckless abandon is abhorrent to me.
You must be new to our casino. "US equity markets" is just the name of the casino.
"Is this a game of chance?"
"Not the way I play it, no"
Numbers dont lie, but computers do. The average return today of the 30 heaviest shorted vs. the 30 least shorted stocks in each index:
S&P500: 3.9% vs 2.1%
S&P400: 4.1% vs 2.4%
S&P600: 3.7% vs 3.6%
ranked by short as a % of float.
A little OT, but...
Remember Tyler's thread on July 17 about "Trader XXX" who was bitching about the buy in on his short position on DDRX? He's the luckiest man in the world. The stock is up about 20 percent since.
Chicken or egg? Did it go up 20pct b/c everyone short got called in?
Score since March
The American People 100
Tyler Durdens End of the world ZERO
This blog has kept you out of the biggest rally in history.
And yet you genuflect.
lol, look in the mirror Anarchists.
Is that you Dennis?
I hope your argument isn't based on the stock market reflecting economic reality.
Since when has the market reflected reality?
Remember the dot com bubble, the housing bubble......
The Fed is printing money, GS/JPM are using that money to pump the market, that's your "reality". Why fight it?
bullshit.
"Score since March"
READ the ZH disclosure (views, opinions, etc should not be taken as an investment advice), I have yet to see TD giving a single investment advice. He just provides info, mostly useful info based on facts and reason rather the desire to please the overloard or nail the commission.
Wrong. Some folks have worn a gas mask while going long. Take what the market gives you, while keeping the Big Picture in mind. Just don't forget that ole Sinatra standard, The Worst is Yet to Come. In fact, today would be as good as any day for a reversal in the afternoon, given the bullish consensus extreme. Ain't no more meat on this bone.
"The American People 100" since March? Good one.
Not exactly how I would score it.
The American People are -100, at best. Higher unemployment, higher commodities prices, lower asset prices (still, if you pay attention to CS data and not the bogus FHFA data), state and local governments increasing taxes and fees while lowering services, etc.
Meanwhile, my oil position, bought when BB really poured on the QE in March, is keeping pace with the equity markets quite nicely. In fact, as priced in oil, the equity markets are just about flat from where I bought, but I have a lot more faith in oil than I do equities.
Our underlying economy is broken. Our deficit is at record levels, and now that we aren't buying their crap in sufficient quantities to stem social unrest in their country, our bankers are getting tired with us.
If you are betting on America, today is not a good day at all, since the funding costs on our debt have increased across the curve (of course the spoos BB owns have increased in value).
I thought the Wu Tang line went "Cash rules everything around me." I guess its not a good time to be a drug dealer.
you're an idiot. is there a single post on this site saying "do not buy this" or "buy SDS" or the like? No. It is information so that everyone goes into whatever decision they choose to make with their eyes wide open.
And its the "biggest rally in history" b/c we're coming off extreme oversold lows after being down SIXTY PERCENT. There's not a chance in hell any one timed the bottom PRECISELY without taking some losses along the way. Perspective, you fuck - find some. Pull that 4 month chart out a year or so.
Just because people here realize the economy is in terrible shape, doesn't mean they haven't effectively traded the rally. Two very different things. Seriously.
Agreed.
Looks like it's time to introduce those partial differential equation solutions for ANONYMOUS poster captchas... : p
BTW I caught 80% of the Rally, so go @#$% yerself.
I wouldn't be jumping the train in any direction. And yeah, the market looks assimilated, and while resistance is futile today, it won't be futile forever.
Here is an interesting article:
http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/ww...
"According to a new survey by COUNTRY Financial, nearly half (49 percent) say they wouldn't be able to pay their bills on time if they went more than one month between jobs.
While they might not be able to sustain their financial well-being for very long, Americans are feeling slightly more confident about their job security. Twenty-seven percent say it is very or somewhat likely they could lose their job in the next 90 days, compared to 29 percent who said this in April."
Iceberg Alert - strike up the band
I think people are just freaking out that some ridiculous stats like the DOW are at 9k+ and soon the S&P will touch 1000. Everyone's being silly like headless chickens, drinking liquid blue pills, which go along nicely with their deep fried green shoots.
Agreed. The notion that the market is any reflection of the economy is insane. Two giagantic bubbles in the past ten years should be proof enough.
Or more recently, look at the S&P from Aug 2007 to October 2007. It rose 100pts. Insane. This is after the secondary markets froze, the whole shadow banking system basically shut down. And the equity markets rose?
This pickup in home sales is due directly to the combination of the $8K FTHB tax credit plus 96.5LTV FHA financing. In other words, more debt shifting to the US govt. The bet is we will be able to shift enormous amounts of private debt onto the public and be able to work through it.
Good point..perhaps the frustration (I am feeling) has more to do with the fact that the stock indices are disassociating ever more from the real economy.
Of course that implies that market indices have ever been a good proxy for the real economy notwithstandint the relatively ancient belief that markets are a 6-9 month proxy on the fuiture (real) economy. Maybe I miunderstood...
And then maybe too an element of "them" making all that money while "we" Zero Intelligence Denizens (ZIDs) of the real economy continue to be thrown on the compost heap.
Pete
And the Nasdaq nearing 2,000. Amazing what those nice, round 'magic' numbers will do.
The bears being the next black swan was first written about here! Nice to see ZH come around to that viewpoint.
http://aaronandmoses.blogspot.com/2009/04/missing-quants.html
My read on this rally and the reversal (when it comes) is they are entirely multiple driven events. We all recognize that if earnings projections stay flat but sentiment changes, you can have multiple expansion that sends a stock flying with no fundamental backing. Surely that sounds familiar.
Back in early March I surveyed the landscape and saw many equities that looked really cheap. MON in the upper 60's intraday for example. But I was holding out for single digit multiples on a lot of stocks and missed the inflection point. Today's market looks and feels like a complete mirror image of early March. There are so many stocks that look crazy expensive (SBUX with your AAPL anyone?). And it seems like there are a lot of folk holding out for higher multiples.
I would very much like to short the market (thru long dated puts, these bear killing squeezes have me too spooked to try and borrow anything). Yet what keeps me from going tres short is the thinking that if this market is so insane to put us at 980, then a little more froth will present some even more attractive opportunites to bet against the market. Like I mentioned above, mirror image of the mentality that had me missing the inflection point in March.
Were I a bettin man I'd call this a great time to take a position against the market.
Barrons have the S&P on a p/e of 137 at that was with it at 940!
http://online.barrons.com/public/page/9_0210-indexespeyields.html
Inflation can also drive the stock prices higher. In nominal terms.
Inflation implies that the money is in circulation, which it isn't - So no inflation.
Deflation for a good while more, then inflation, assuming we haven't had to scrap and build the financial & monetary systems before then...
Does VIX measure volatility and not direction? My understanding of volatility is that it is the expected amount of percentage change up or down of the underlying. Is this correct for the VIX? Or does it measure someting else?
Volume has disappeared since the March lows. How long can this go on???
100 pts every 10 calendar days on the S&P.
When zero hedge has no posters left, it will be time to sell ;-)
Setting up for the big 1000 today, and then Goldman's 1060 tomorrow, as Amazon is re-rated to 100 times earnings.
Then they change July 31st to December 31st and the year ends on a high.
Euro setting up for a slide. Not having any of the Wall Street BS! Nasdaq 100 chasers about to be flushed through the trap door.
You moron
market is up more than 2%
vix implied daily vos 24 / 16 = 1.5
vix has to go up
Hey you holders of foreign debt.... the US has a strong dollar policy....
Look into my eyes.....and say after me...
the US has a strong dollar policy....
believe, believe...
You must have read my mind.
FANTASTIC!
That feeling you have running uncomfortably up and down the back of your neck is just a healthy dose of cognitive dissonance, as your synapses keep firing off directions for actions to be taken that are 180 degrees of where things are going "out there" in the Kantian realm of appearances. Let me assure you, your software is working just fine friend. Steady as she goes.
and what's the bets that after horrendous after hours earnings the futures will be magically up by the time the US wakes up because after thinking about them the earnings aren't that dreadful after all.
Hey who cares about earnings, they are just stupid insignificant nonsensical noise for computers to be discarded at the earliest opportunity
VIXX is calculated from a simple algorythm (here i just mean formula), it doesn't directly correlate with anything... if it happens to correlate, typically as a 2nd der., 3rd der. with SPY's that's only because of the formula. zero hedgers know the 'fear gague' is mostly hype for people reading the journal or watching tv a bit too closely