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Net Speculative E-Mini Contracts Hit Greatest Short Exposure Since Lehman Failure
A few weeks ago we indicated that the S&P Large contracts surged in the week ended March 23by the biggest amount since the March 2009 lows (which incidentally was followed up by the latest phase of the most ridiculous market melt up since 1932), observing the capitulation phase of the melt up. So it is interesting to point out that non-commercial speculative positions in the just as relevant E-Mini contracts hit the greatest short exposure since the collapse of Lehman, declining to -51,180 in the week ended April 20th. The last time we were negative by such an amount was in November 2008, when the market was plunging daily, however then the bias was positive with E-Minis surging all the way to the March inflection point at which point they collapsed once the market started its seemingly endless creep higher. Have we reached another inflection point, with the E-Mini specs, at least, betting there is a market correction upcoming?
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this sentiment is in direct conflict with this fellows work...
http://cotstimer.blogspot.com/2010/04/banks-gold-in-cash-s-500-nikkei-bu...
... a signal which has been bullish since Feb 22 and rightly so.
Cotstimer does good work with this data. My own charts say that we've got room to run to the upside, too.
If you're trying to short this market, you've got to be super-nimble and honor your stops unquestioningly. Otherwise, you're just going to get run over.
Oh dear more shorts to squeeze the market higher
Those shorts have an admirable track record looking at this chart.
Exactly. Big rallies tend to end in euphoria, not in obedience to record short levels. It seems unlikely that this market will crash until all those shorts have given up and thrown in the towel. Until then, unbelievably, it's up, up and away.
"Oh dear more shorts to squeeze the market higher"...Racer
"Exactly. Big rallies tend to end in euphoria, not in obedience to record short levels. It seems unlikely that this market will crash until all those shorts have given up and thrown in the towel. Until then, unbelievably, it's up, up and away." Amish Hacker
What a bunch of morons you guys are....these are futures, there are ALWAYS short positions. They will NOT be wiped out. Learn what futures are and how they work before you grace us with such dumbass comments
thank you for your critique. what is your interpretation of the chart?
It is a limited time frame chart, I would love to see it over longer term. That said, their accuracy has been remarkable. Such massive long positions just into the 2009 bottom. They have been net long for over a year and just turned negative, obviously I agree with Tyler's conclusions.
Bears are an endangered species and are growing tired of panicking (having been in this mode since February). Time for good old fashioned bull angst to step into the traces and do yeoman's work in the rinse cycle.
Who knows? The only thing this rally has proven is that crazy markets go absolutely bonkers before they regain some sanity. What else would explain markets approaching their pre-crash levels with absolutely nothing changing in the global economy except for sovereign debt levels moving from cumbersome to apocalyptic, and unemployment going from bad to worse.
Oh that is simple. Corporate profits are doing very well inspite of very high unemployment. I guess this says that all those unemployed folk are not too important to corporations. However the Fed will use the uunemployment as an excuse to keep rates at zero for a long long time. Great profits+Zero cost of money = explosive stock prices. Not too hard .
The math behind this sorta hit me a couple months ago, looking at unemployment by education level, which is a decent proxy for income. Higher education levels had (obviously) lower unemployment levels, so, yeah, to the extent that those who have lost their jobs weren't big consumers anyway, it's a non-issue in the bigger picture.
Still, that doesn't change the fact that valuations on actual earnings are quite high.
And the FDIC can quietly continue its bank closure job. SEVEN this Friday in Illlinois. Is the FDIC trying to make a statement for my (state's)men & women ?
Dont forget non-reportable (small trader) position which is net 56776...
This whole rally IMO, was just a technical bounce off the March bottom. Now the reflex rally is going to hit a huge wall of resistance and lacks catalysts to break out.
The whole thing was more about mass psychology and blind momentum, fostered to unprecedented high levels with this new age of blatant propaganda mongering by the govt and MSM.
The wall at 1222 is there and all the Summers, LIESmans, and corrupt FED members and their political lackeys in congress cant change that.
They have already pulled all the rabbitts out of their hats (and asses) they can for now just to jack it up to this level.
I look far an all out media blitz, fudged data, and outright manipulation of the capital markets in the very short term to try to breach that wall, but imo, Mr Market will call bullshit and shanannigans on the whole mess.
The parable of humpty dumpty comes to mind.
Stay tuned propaganda fans for "QE 2.0" "New and improved" version, and eventually qe3.0 etc until finally the real doom is here and things must be dealt with or else.
I hope what your saying is true, however I would not underestimate the power of HFT computer algos. The brilliance of these supercomputers could theoretically keep this going a very long time...
The whole collapse of 2008 looks orchestrated. Look we now know that the squid was relying on getting paid on their CDS with AIG. Under a new administartion / new Treasury Sec who knew what actions might be taken with AIG. So with a couple months to go with friends in high places best to create a collapse/financial panic so AIG could be properly supported so their contracts are paid out in full. It all kinda falls into place now . So the Lehman non-bailout seems like it was expressly done to create the level of panic required to go extraordinary things - like make AIG counterparties whole.
So that 666 on SPX ( which by the way put it back to 1968 levels in real terms) was completely artificial and ridiculously cheap. Probably current levels or maybe SPX around 1000 is "fair value". So we are not that extended.
666 was cheap by no means. Did you read the Arizona anti-illegal law ? That oughta scare the jitters out of every bondholder in the US of A and China for that matter. Dig ?
The 2008 collapse looks orchestrated because it was orchestrated. Lehman was bankrupt at the same time as Bear Stearns. The Fed kept Lehman afloat with $31 billion - which it extracted from the bankrupt estate the day after Lehman filed (not challenged by the liquidator).
I wrote about the orchestration as it was happening:
Ring Fences, Rustlers and a Global Bank Insolvency (written before Lehman failed)
http://londonbanker.blogspot.com/2008/09/ring-fences-rustlers-and-global...
The Unitary Federal Reserve: Crisis Choreography
http://londonbanker.blogspot.com/2008/09/unitary-federal-reserve.html
Financial Eugenics: The Paulson Plan for Survivor Bias
http://londonbanker.blogspot.com/2008/10/financial-eugenics-paulson-plan...
The leaked recording of the conference call between the Treasury and SIFMA made it clear that the whole aim of TARP was to help "the healthy banks become even healthier".
looked at the ring fences one a bit. good work. thank you.
Some very interesting posts. Noticed that most if not all of the posts were 2008 vintage. Have you done any more current posts, and if so, where are they hidden? If not, you should.
It is indeed surprising that not one question has been raised about the possibility that the Lehman non-bailout ( one day after they were allowed to go bankrupt - the Fed opened its window to wall street) - was purposely done. That the collapse was possibly orchestrated. The motives are now clear. The story makes complete sense. Watch the Fuld testimonies - he gets a strange expression on his face when asked why Lehman collapsed. Like he knows but cant really say.
I think primefool is quite right in a way. I watched all the Lehman testimony and it seems to me the fed knew that Lehman was to far gone to help and decided not to. The fed talked about 3 card monty at Lehman and Bill Black testified that Lehman was deep into outright fraud. The repo 105 funny business was known before hand. Fuld and Lehman had basicly screwed the pooch so badly that had they survived, there would be to many very uncomfortable questions from to many people so they were sent to the hell they deserve.
To me all the questions being raised have to do with the stock market rally in 2004-2006. After all the blatant after-hours futures manipulation, CNBC propaganda, lies from buy side AND sell side analysts, manipulating of currency and commodities markets by the big banks... all in the name of pushing the stock market higher. It makes you wonder how much of this was going on back in 2004/2005 when people weren't really using the internet to compare notes. There was no zero hedge back then. Makes you wonder exactly how long this kind of manipulation has been a part of the goverment's playbook.
The manipulation was always there, but it picked up steam after 1982. Thats when the 401k / IRA programs started and middle class started pouring savings into equities. Look at historical graphs. Wall Street really got a sniff of it in 1993 with the Glass Steagall repeal. Since then its been a never ending rollercoaster. Its now reached a point where the stock market is the ONLY barometer of the economy for a lot of commoners (even if things are horrible horrible in reality) !! Amazing aint it ?
The retail ETFs are right at 2007 highs, despite no personal income growth ex-govt transfer payments, no credit growth, continued declines in private sector employment, accelerating mortgage delinquency rates, no let up in consumer debt default rates, flat home prices, few mortgage refinancings, and declining savings rates. This rally in retail has only occurred because of 10s of 1000s of closed stores across the US and the federal govt issuing debt, the Federal reserve directly or indirectly buying the debt, the federal govt handing out the cash to consumers directly and indirectly to spend, Americans spending all that money, and US retailers hoarding the cash. But now the Fed is no longer printing to buy debt and the federal govt won't be handing out cash much longer. What happens then?
What happens is things are supposed to be magically better now.
The govt is great for heavy handed reactions but never has an exit strategy just in case.
The muslim world is supposed to happy now having been "liberated", and no troops necessary any more.
The green shoots are supposed to be growing into sturdy saplings now and the economy should grow on its own.
There are no more druggies, thanks to the war on drugs which supposedly has worked as advertised.
UPDATE: Ummm..Drugs aint so bad now,since states tax coffers are emptying out fast. CNBC is pushing weed now in addition to being the propaganda arm of the fed!
There should be the basis of a real good "green shoot" joke in there somewhere!
The Dow sliced thru the 200week ma- retail is chasing. This week, we have T-Bill auctions Mon-Wed, FOMC and Friday end of month windowdressing. They might sell it off on Monday(or Tues) enough to push $$$ into bonds, Tues maybe flat, Wed is ZIRP confirmed, they ramp to S&P 1230. Maybe 1250.
Ben could do the right thing & raise .25%,( market down to 20-day ma but back after Thurs-Friday tape painting.)
This and most Friday afternoons, when Barrons publication is going to feature a stock with a market moving article, that stock will trade significantly more than usual volume in the after hours session and if its a positive mention the stock will trade way up and if its a negative mention the stock will trade way down. Yesterday tickers GES, RMBS and FISV all traded much more volume after hours session than normal and traded much higher in the case of GES and FISV and much lower in the case of RMBS which is right inline with their Barrons mentions today. I have complained about this in the past to the SEC as well as to Barrons and other media outlets. My complaining appeared to slow the frequency but it is still occurring regularly. This is not something that is hard to to back test and prove. Take notice for yourself. Every Saturday when Barrons puts out their publication check the time and sales of the stocks on Fridays after hours. Someone is getting the info of what will be mentioned and trading on it. I would wager half of my trading account that those trades week after week could be linked to the same person. Just look at all the stocks featured in Barrons weekly publication and look at the time in sales for those stocks the Friday after hours session prior to their being mentioned in Barrons. The really obvious part is that these stocks typically do NONE to very little volume after hours but on the Fridays before they are to be mentioned in Barrons they do a ton. Like RMBS yesterday someone is holding 50k shares on the offer down 2.5% That NEVER HAPPENS after hours without significant news. I have began documenting these occurrences as well as my complaints to Barrons and the SEC in case I need them in the future. This activity is stealing in my eyes and illegal. It needs to be stopped. Please file a complaint about this to the SEC via the link below. Any little bit we can do to stop insider trading will help.
https://denebleo.sec.gov/tcr/add.action?c=3
I copied your post & emailed them indicating I am also asking the SEC for an investigation. h/t to ZH too.
Barronshater
I noticed this phen too. Never traded it though,since I had researched trades going on.
Interesting...This has been going on for quite a while too, I stopped subscribing to barrons over 6 months ago, I just didn't find much value in it and it seems to be written by kids...
Blue Horseshoe loves Anacott Steel.
I think next week will be a down week. Indexes down 2%. Massive Treasuries, Op/Ex, and Goldman in the news.
Everything is so crazy right now.....I am moving back into the hyperinflation/hyperdeflation camp. Down week next week, and then it's up, up, and away. I also see the next crash, barring a false flag or maybe a real attack on American soil, beginning in the spring of '12. Hyperinflation will have been in full effect by that time. 'Merca will not realize it until the Fall of '12, when the Hollywood Futures Index implodes. Then everybody and their mother will try to jump in our Argonaut. We will have set sail by then. The way I see it, if you want in, get ready before JPM is done with their shorts. They will be done at $20.92. The market will capitulate massively at that point. Then to the moon. Get ready.
On a long enough timeline all risk assets will go to zero!
Yes, but on a long enough timeline, people will realize FRNs are a risk asset as well...
People will realize FRNs are THE risk asset...
The obvious bubble in the bath water is the FEDs balance sheet. The FEDs got there work cut out for them. The easy part was buying up all the crap paper out there to save the world, now let's see if the world is going to reciprocate... From the looks of that graph someone heard the rumble and are punching out before the bubble breaks the surface.
Next DOW key resistance is 11,250/300
If that level is penetrated next target is 11,900
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