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Nasdaq Cumulative TICK Of 5,300 At Highest Since 2002, Relative Put/Call Ratio At Most Extreme Ever: The Bubble Is Now Fully Back

Tyler Durden's picture





 

The latest confirmation of the stock market bubble comes from Sentiment Trader which points out that yesterday's Nasdaq TICK almost passed an all time high, yet settled down...to 8 year high levels. As ST points out: "There were only three other dates that even come close to the current extreme:  October 4, 2001:  The NDX was coming off a major low, but still backed off for 3 days before rising again. May 2, 2002:  The NDX dropped hard for the next 3 days. May 15, 2002:  The NDX managed to rise a bit for the next 2 days, then rolled over into a major decline. Since then, the TICK hasn't managed to get above +4000 at any point, even intraday, much less to the +5300 level it closed at yesterday. Truly remarkable." Ben Bernanke has now succeeded at convincing virtually everyone that moral hazard is the right approach to dealing with an insolvent financial system.

And for another indication of just how overbought the market is, Sentiment Trader also points out that the equity-only Put/Call ratio dropped to 0.32, the lowest reading since January 16, 2004, which on a relative basis is 45% below six-month average. The conclusion: " That, my friends, has never happened before (at least going back to 1997)."

 


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Thu, 04/15/2010 - 10:32 | Link to Comment lbrecken
lbrecken's picture

Audit the FED and lets finally get to the bottom of all this........

Thu, 04/15/2010 - 11:01 | Link to Comment saladbarbeef
saladbarbeef's picture

+1776

Thu, 04/15/2010 - 11:13 | Link to Comment whatsinaname
whatsinaname's picture

This time the bankers or the Fed cannot be blamed - there are plenty of sheeple I know who believe in the recovery and are part of the "wall of cash" hitting stocks as reported by CNBC.

Thu, 04/15/2010 - 11:16 | Link to Comment SofaPapa
SofaPapa's picture

The fact that they are going to get their bagholders is just depressing. :(

Thu, 04/15/2010 - 10:33 | Link to Comment macfly
macfly's picture

ditto that!

Thu, 04/15/2010 - 10:34 | Link to Comment economessed
economessed's picture

The physics here of dimishing surface tension produce an inevitable result, but in the mean time, we must pay tribute and make an offering to our driving market god:

http://passionweiss.com/wp-content/uploads/2009/10/mrbubble.jpg

Thu, 04/15/2010 - 10:42 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

economessed

Great picture. Let me help by posting it.

Scrub a dub dub.

Thu, 04/15/2010 - 11:06 | Link to Comment SteveNYC
SteveNYC's picture

I didn't know Ben shaved his beard off....

Thu, 04/15/2010 - 12:56 | Link to Comment WaterWings
WaterWings's picture

Barney Frank swears by it. He brushes his teeth with it.

Thu, 04/15/2010 - 10:40 | Link to Comment Theta_Burn
Theta_Burn's picture

The puppeteers HAVE to be scratching their heads wondering "to far to fast"?

Is it me or did Obama get a bit paler?

Thu, 04/15/2010 - 11:03 | Link to Comment john_connor
john_connor's picture

Obamas approval ratings appear to be inversely proportional to the stock market.

Perhaps the sheeple have figured it out

Thu, 04/15/2010 - 11:11 | Link to Comment whatsinaname
whatsinaname's picture

Trust me. Some sheeple are part of the "wall of cash" hitting equities (as reported by CNBC).

Thu, 04/15/2010 - 10:54 | Link to Comment Assetman
Assetman's picture

I sure wish we would audit the Fed.  I gather we caould easily get some RICO charges against some major after combing through the books a few weeks.

On another note... here's a sample of what this rally provides.  This morning, public traded REIT Macerich Cos. announced a 30 million share offering.  At an offering price of $41 per share, total proceeds will amount to over $1.2 billion.

This is a company that has a total market cap of only $4.1 billion... it's total debt levels are more than than, at $4.5 billion.

Moral hazard, indeed.  But one would be a fool not to participate in a secondary the window was this wide open, though.  The investment banks, of course, get the windfalls through fat underwriting fees.  This reminds me a lot of the Internet bubble, except that it's not concentrated.

Thanks, Ben!  Let the herding continue!

Thu, 04/15/2010 - 10:43 | Link to Comment 101 years and c...
101 years and counting's picture

GREEN SHOOT!

Makes me want to go out and buy a new 60", 3-d, hi def tv!!!  Not today though.  I'm waiting for AAPL to come out with this product so I can then spend $500/month for new apps, etc....

 

 

Thu, 04/15/2010 - 10:48 | Link to Comment HarryWanger
HarryWanger's picture

If you just keep buying AAPL stock until it's at 400 next month, you won't have to worry about paying for apps.

Thu, 04/15/2010 - 11:10 | Link to Comment taraxias
taraxias's picture


Kinito, is that you?

PMSL

Thu, 04/15/2010 - 12:06 | Link to Comment RichardENixon
RichardENixon's picture

Yea that's him. He must have done enough damage over at Marketwatch, now he's here trying to ruin this site.

Thu, 04/15/2010 - 10:53 | Link to Comment economessed
economessed's picture

Me?  I'm thinking 48 foot recreational vehicle -- with 54" flat panel and granite countertops.  I'll go sailing the ribbons of asphault (between diesel stops every 400 miles) and attend Nascar events, tea party rallies, and eat at Red Lobster three days a week!   That's the America Tim and Ben want to recreate, and I want to consume it with ample credit and easy payments!!!!!!

Thu, 04/15/2010 - 11:02 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Hmmmmmm

The mortgage payment or 6 new apps?????  

Thu, 04/15/2010 - 10:47 | Link to Comment RobD
RobD's picture

Ok nubie question. What the hell is the "TICK"?

Thu, 04/15/2010 - 10:55 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

LOL

That's one hell of a tick. But it's so........um.......er......purple.

Thu, 04/15/2010 - 10:54 | Link to Comment tip e. canoe
tip e. canoe's picture

it's a blood-sucking insect that spreads lyme disease which rots your brain.  like the FIRE sector on the global economy.  there are heavy concentrations of both in the hamptons & CT.

coincidence?  or not?

Thu, 04/15/2010 - 11:15 | Link to Comment ZackAttack
ZackAttack's picture

Also, a group of them is referred to in plural as a 'poly.' Hence "a large group of disease-carrying, blood-sucking parasites" = "polyticks." This is often written in modern times as: "politics."

Thu, 04/15/2010 - 12:12 | Link to Comment Racer
Racer's picture

ZackAttack  + 1000  LOL

Thu, 04/15/2010 - 17:12 | Link to Comment tip e. canoe
tip e. canoe's picture

nice one zack

Thu, 04/15/2010 - 11:21 | Link to Comment buzzsaw99
buzzsaw99's picture

not insect, arachnid, as in eight legs. otherwise you are correct. a parasitic organism in dubitably.

Thu, 04/15/2010 - 17:11 | Link to Comment tip e. canoe
tip e. canoe's picture

thanks, never knew they were related to spiders.

Thu, 04/15/2010 - 10:50 | Link to Comment Kina
Kina's picture

The market has been made meaningless, it is valued in relation to nothing.

Much like the money, it has been made meaningless they way it is tossed around like confetti except to the people who really need it.

And of course accountability, trust, honesty, non-criminal behaviour....no longer required.

 

If the whole thing blows up more than wealth will be lost. Belief in the US financial markets and systems will be badly damaged.

 

Obama may as well have employed Madoff to run everything.

 

 

 

Thu, 04/15/2010 - 10:58 | Link to Comment crosey
crosey's picture

If the whole thing blows up more than wealth will be lost. Belief in the US financial markets and systems will be badly damaged.

+100....for the retail investor.

I cannot believe that this moral hazard is being pursued, blindly.  I think that TPTB know EXACTLY what they are doing.  My evidence?  The global acceptance of this moral hazard.

Either that, or all the lemmings will run over the cliff.

 

Thu, 04/15/2010 - 11:21 | Link to Comment SofaPapa
SofaPapa's picture

"If the whole thing blows up more than wealth will be lost. Belief in the US financial markets and systems will be badly damaged."

 

Will be?  I find it depressing that anyone is still naive or asleep enough to have faith left to lose...

Thu, 04/15/2010 - 12:13 | Link to Comment RichardENixon
RichardENixon's picture

There are plenty of people who are still naive or asleep enough. This charade will continue until there is a meltdown which the sleepers have no choice but to acknowledge.

Thu, 04/15/2010 - 10:58 | Link to Comment HarryWanger
HarryWanger's picture

Claims rise by alot (ok I know the Chaves holiday played a role)

Industrial Production missed expectations (yes, I've been told it still increased though)

Philly Fed beat expectations by .2 (Ah, there it is!)

See there's always a reason for a rally!

Thu, 04/15/2010 - 11:03 | Link to Comment chancee
chancee's picture

All this would mean something if the government wasn't manipulating the stock market.  My opinion is they seek out techinical flags such as this one and treat them as a challenge.  They're already sharpening their knives for the 61% retracement coming up on the S & P.  The louder the chorus gets across the blogosphere regarding this being a major point of resistance... the more staffers they'll have on the Fed's trading desk that day to gun the hell out of the futures in pre-market and then ramp up some big name ETF's throughout the day.  And of course the memo will go out to Goldman and J.P. Morgan the night before to leave HAL9000 set to BUY, BUY, BUY all day.

Thu, 04/15/2010 - 11:09 | Link to Comment Catullus
Catullus's picture

I had my doubts until today. There is serious bullshit going on. I just wanted to test the hypothesis so I stared at STEC for days. High short position, low volume, options expiration coming up. Ramp that fucker, short covering and pocket your options gains. I'm done playing safe. Play the wave, monetize your winnings into gold, and hope this is not going to end poorly.

Thu, 04/15/2010 - 11:09 | Link to Comment christianhgross
christianhgross's picture

Of course the market is massively overbought! My indicators have shown this was started around the beginning of March. This is the craziness of the market. You only need to look at any chart since February and see that this market ain't normal. There are NO DIPS...

What really made me nervous is the fact that options are being priced to the point where the statistics = movement in a single direction. Let's say that the you have a vol of 10%, and that results in a high point of say X. The market is moving to X and a bit, meaning that if you sold premium you are completely SHAFTED since the market does not give you any room to manuveur or exit. You are trapped so to speak.

Thu, 04/15/2010 - 11:20 | Link to Comment Racer
Racer's picture

A headline just now..

"Fed's Bullard says Fed with broader authority has best chance to prevent future crisis"

 

The world is dooooooooooooomed

Thu, 04/15/2010 - 11:22 | Link to Comment Dr. No
Dr. No's picture

It is fun to compare market data, ratios, etc to previous years and then shout out a warning.  However, in those previous years, $2T dollars was not pumped into the economy.  We are in uncharted waters.

Thu, 04/15/2010 - 12:33 | Link to Comment Sancho Ponzi
Sancho Ponzi's picture

Yea, but most of that money is being used to purchase treasuries or held as excess reserves. The way the O-Team is spending, without QE2, there won't be any dollars left in circulation by 2014.

Thu, 04/15/2010 - 14:30 | Link to Comment gosh
gosh's picture

Let me bet the first to say, "This time is different!"

Thu, 04/15/2010 - 11:28 | Link to Comment Hephasteus
Hephasteus's picture

Get your call money. 1933 double dip call money. We're repeating history again.

Thu, 04/15/2010 - 11:28 | Link to Comment Jesse
Jesse's picture

 

I was just looking at the spread between the SP futures and cash market.

The premise here is that the SP futures are used to lead the cash market higher.

http://jessel.100megsfree3.com/premiumsp.png

Thu, 04/15/2010 - 11:34 | Link to Comment Eally Ucked
Eally Ucked's picture

We have to understand that all those cos reports showing that their business grows at nice pace, are not achieving it in America, too bad mostly in Asia, look at UPS, YAM-Yam,Caterpillar and others. Their operations in N.America are shrinking, they all shortly will be Chinese cos not American. But all those economists in America get orgasm looking at their numbers, when they should cry. Is, for example, UPS Asian operation included in US GDP?

Thu, 04/15/2010 - 11:35 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Key interview with Doug Braunstein, Head of Investment Banking at JPM on CNBC just a few minutes ago confirms my theory:

-Secondary stock issuance at historic highs for 2010 (data is not published elsewhere, but I suspected)

-Bond issuance, and high yield in particular, reached historic levels in 2010. 

This, my friends, was the the key aim of the engineered rally in the stock and bond secondary markets. Because this is how the US Taxpayer has been tapped in the effort to keep the US corporate sector afloat. This is quasi nationalization without the benefits of ownership or even loan repayment. A transfer of wealth on the grandest scale ever.

The defenders of the Fed and Treasury would say that, in essence, the US government/taxpayer is providing a giant bridge loan to almost the entire US corporate sector which was caught with a mountain of debt at a time when credit markets were frozen and rolling the debt was not an option. Even when the markets thawed, most corporations could not remain solvent borrowing at killer rates. So the answer: we'll save the TBTF banks and, in exchange, issue them marching orders to engineer the biggest bridge loan in the history of the world. 

The banks were able to survive through the government engineered magic of ZIRP, super steep yield curve, QE, mark to model accounting rule changes permitting concealment of toxic debt, positive treasury debt carry, expansion of the Fed balance sheet to accommodate the smelliest of toxic debt, sham stress tests and a laissez-fair policy regarding any legal investigations. In other words, the US taxpayer bending over blindfolded for another round of felatious practices. 

In exchange for a new lease on life, the government and DOJ remaining hands off and not breaking them up, they were issued orders to buy buy buy using zero interest, zero risk cash. This in turn allowed a huge swathe of the US corporate sector to survive though record debt issuance and record secondary public offerings, which in turn provided fees to Wall Street. The HFT trading bots were permitted to continue their near total control of the action (though at one point a certain Senator outside the loop threatened to investigate and was warned/bought off). 

In essence, the US taxpayer has advanced money and paid money directly to these private for profit entities with no benefit, recourse or guarantee of success. Banks have profited mightily which explains why still in the most recent quarter, JPM's earnings report reveals that most of their profit is from "Trading" while at the same time, loan losses widened. 

Will this system succeed? In my opinion the answer is in 2 parts: -This can go on appearing to succeed for quite some time thanks to the power of the printing press and the political capital of the US government. But -There is no free lunch and the side effects are so toxic to the economy as a whole that damage is occurring and some of it may be irreparable. For instance taxes. They'll be here, they'll be queer. And you can bet on it. Secondly, this segues into my theory of the Double Whammy Economy which is in full flower as per today's economic reports. Deflation and inflation are in coexistence and killing consumers and small business. Latest confirmations: small business confidence shocked to the downside despite the mega run in the market. Employment and incomes are still deflating 2+ years after the start of the depression. ADP , new jobless claims and productivity confirmed that. And real estate is deflating. New foreclosures are rising, loan mods are failing, Schiller has warned of a new decline in prices. Retirement assets (pensions, prospects for social security and medicare) are also deflating. Meanwhile as a side of effect of the legalized speculation by the banks, energy and raw materials and food are up (not reflected in core CPI). But so are bank fees, consumer interest, insurance, education, import prices, transportation. But new federal state and local taxes loom larger and larger levied on a diminishing pool of payers. Such a situation is not sustainable. The Fed/Treasury hopes that the bridge loans and stimulus will last long enough that the pump will have ben primed and the economy will take off on its merry way as in days gone by. But the lay of the land is way different and the treatment has toxic side effects that may overwhelm the patient. They know it. That's why they're upping the ante on the stock market to "shock and awe" and won't stop until we have new records on the Dow and Nasdaq. This year. But the clock keeps ticking, side effects keep mounting and debts are piling up. 

Thu, 04/15/2010 - 11:59 | Link to Comment Assetman
Assetman's picture

It's generally a very dangerous thing if you're a Fed Chairman, and you choose not to see asset bubbles or the onslaught of inflation.  But he simply doesn't care.

I think you're on the mark on what the Fed has been doing to do at the corporate level-- but the game has been stretched out longer than I would have thought.  Thanks, Greece.

The artifically skewed yield curve has really helped the banks on the spread, to the point they can invest in 10-year Treasuries and be fine.   And for the rest, an elevated stock market keep the window open on the new issuance, bolstering weaker balance sheets and providing investment bankers with fat underwriting fees.

It couldn't be a better time to be irresponsible... as it's being sponsored by a massive printing press.  There will be bagholders, indeed. 

 

Thu, 04/15/2010 - 12:20 | Link to Comment RichardENixon
RichardENixon's picture

Very well said. I wonder if there is a target for when to pull the plug and loot the bagholders who bought into this pump job?

Thu, 04/15/2010 - 12:41 | Link to Comment Caviar Emptor
Caviar Emptor's picture

I think the problem is there is no plan. As each week goes by and the economy does not look self-sustaining watch Ben sweat. Last week's speech of his in Dallas was an eye opener when he sounded pessimistic notes on employment and the broad economy (as opposed to his testimony yesterday). It's also very revealing that last week the Fed governors were publicly fighting amongst themselves with Hoenig dissenting strongly on rates. A sign the game's not going according to plan.

Thu, 04/15/2010 - 12:57 | Link to Comment hammel123
hammel123's picture

the end game is to default on foreign debt via currency depreciation, see Britain post 1931 the template we are working off, export deflation, be the "best of the worst", the real economy esp. manufacturing will *appear* to do better at higher prices

Thu, 04/15/2010 - 13:07 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Trouble with a big depreciation is twofold: It totally screws over the Chimerica deal and screws any other big US trading partners holding big US debt and securities positions. That's a problem when your partners are financing you. Secondly in a completely import dependent economy it's massively inflationary. Trade deficit last month in a lousy economy was $40 billion. That's nearly half a trillion a year! We're calling the stimulus 'massive" when it's meant to last 3-4 years ie only covers 1.5 years worth of trade deficit. Imagine a trade deficit twice or three times higher. Game over.

Don't underestimate the power of concealment. Off-balance sheet, mark-to-model can hide lots of toxic waste for a long time. 

Thu, 04/15/2010 - 11:51 | Link to Comment RunningMan
RunningMan's picture

I've heard secondhand from someone at the FRNY, that they know full well that "what" they are doing is driving the market up. No indication on "what" it is...

Thu, 04/15/2010 - 12:03 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Large secondary offerings, let alone record offerings, dilute the float and send shares proportionately lower as a reflection of the fraction of equity owned. In normal times. Only "magic" can make the price of a greater number of shares levitate after a secondary issuance. Like when ownership and investment through equity is not even a consideration.

 

Thu, 04/15/2010 - 12:47 | Link to Comment wgpitts
wgpitts's picture

Criminal Complaint to FBI and SEC: "Short" Sellers or Buyers of "Put Options" Defrauded of Billions By Federal Reserve Bank

http://www.facebook.com/wgpitts?ref=profile#!/note.php?note_id=383150183339&id=1054329942&ref=mf

Thu, 04/15/2010 - 12:49 | Link to Comment wgpitts
wgpitts's picture

"Short" Sellers Defrauded By Federal Reserve: Class Action Lawsuit

http://www.facebook.com/group.php?gid=112775505414171&ref=mf

Thu, 04/15/2010 - 12:49 | Link to Comment wgpitts
wgpitts's picture

Investors have lost billions of dollars taking short positions on financials while the SEC  allowed the private central banks to manipulate the banks financial positions without disclosing to investors. Only the bank insiders knew. They made a killing. This is fraud.

How can the central banks secretly provide hundreds of billions of dollars to banks and not disclose this information to investors? Isn’t this market manipulation? Where is the SEC? All those with put options or short sales were defrauded. I am one of those persons!

Fed Releases Details on Bear Stearns, AIG Portfolios
http://www.bloomberg.com/apps/news?pid=20601087&sid=aymTlczlMmpA&pos=1

Fed in hot water over secret bailouts
http://www.csmonitor.com/Money/Robert-Reich-s-Blog/2010/0401/Fed-in-hot-water-over-secret-bailouts

The Fed Admits To Breaking The Law
http://networkedblogs.com/21Xqv

Geithner: Pickpocketing Trillions from the People to Give to the Oligarchy Was "Deeply Unfair", But We ... Um ... Had To
http://www.washingtonsblog.com/2010/04/geithner-looting-country-for-trillions.html

Why Is The Fed Actively Managing A $25 Billion Maiden Lane MBS Portfolio When Its $2.4 Trillion SOMA Holdings Have A $1 Billion DV01? (And Are Unhedged)
http://www.zerohedge.com/article/why-fed-actively-managing-25-billion-maiden-lane-mbs-portfolio-when-its-24-trillion-soma-hol

April 9 (Bloomberg) -- U.S. banks masked their true risk levels by temporarily lowering debt before reporting it, the Wall Street Journal said, citing data provided by the Federal Reserve Bank of New York.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXNVR4sYxMKU&pos=6

4/9/10 Major U.S. banks masked risk levels: report
http://www.reuters.com/article/newsOne/idUSTRE63813R20100409

Thu, 04/15/2010 - 12:50 | Link to Comment wgpitts
wgpitts's picture

Barnanke admits they gave $1/2 Trillion dollars to foreign banks...then the foreign banks did this...the fed subornated fraud in the financial markets through the ECB and with direct undisclosed purchases...everyone who purchased put options or shorted the banks was defrauded

Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."
http://www.youtube.com/watch?v=n0NYBTkE1yQ&feature=player_embedded

BoE Secretly Loaned $102.9 Billion to RBS
http://www.cnbc.com/id/34126826

Bank of England tells of secret £62bn loan to save RBS and HBOS
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6646923/Bank-of-England-tells-of-secret-62bn-loan-to-save-RBS-and-HBOS.html

Bank of England advisers not told about secret £62bn loan to HBOS
http://www.guardian.co.uk/business/2009/dec/03/bank-england-secret-loan-hbos

Bank gave RBS and HBOS 'secret' £62bn loan
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6929451.ece
Fed Refuses to Disclose Recipients of $2 Trillion
http://www.bloomberg.com/apps/news?pid=20601109&sid=apx7XNLnZZlc

Fed Fights Request To Disclose Who Got $2 Trillion In Bailouts
http://www.istockanalyst.com/article/viewarticle/articleid/3775032

Is Obama manipulating the stock market?
Economist claims president 'jawboning' economy to boost Dow
http://www.wnd.com/index.php?fa=PAGE.view&pageId=92100

VIDEO: Federal Reserve Manipulating Stock Prices?
http://www.chartingstocks.net/2009/09/video-federal-reserve-manipulating-stock-prices/

Does The Government Actually Manipulate The Stock Market?
http://www.businessinsider.com/does-the-government-actually-manipulate-the-stock-market-2010-2

Thu, 04/15/2010 - 12:54 | Link to Comment Tense INDIAN
Tense INDIAN's picture

+666

Do NOT follow this link or you will be banned from the site!