S&P Melt Up Price Momentum: A Once In Never Event

Tyler Durden's picture

As part of the most recent observations on the boil up (melt up is so QE1) in the S&P, we find something quite interesting. A quick glance at the chart below shows the general market 45% climb since Bernanke's leak of QE2 in August, as well as the market's 10 day (purple line) and 50 day (green line) moving averages. As a point of reference the S&P has been above the 10 day average for 30 days straight, and above the 50 day average for 92 days straight. What is remarkable are some statistical findings as pertain to the average's movement with respect to the SMAs. Sentiment Trader points out that while as part of the recent surge in the S&P, the market has gone for "92 days without closing below its 50-day average, which has been matched only 17 other times since 1928." Where it gets scary, is that as pointed out, during this time the market has not closed below the 10 DMA once during the past 30 days. And as Sentiment Trader notes, "this has never happened before, in 82 years of history." Congratulations to the Centrally Planned Socialist States of America: its Chairman has just made the Guinness Book of Manipulation Records.

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Caviar Emptor's picture

Philly Fed revised down. Market crumping

shushup's picture

So far this is hardly a move down.

Lieutenant Dan's picture

They put out the actual numbers once in a while, so those who have missed the move have a chance to hop on the gravy train.

rsi1's picture

From 2/15 until 4/16, 43 trading days, the market closed above the 10 days MA every day.. what is all the fuss about? 

goldmiddelfinger's picture

Indy metals getting their teeth kicked in

Arch Duke Ferdinand's picture

Could the U.S. Dollar rise 50%?

""It looks like the DXY (Dollar Index) is tracing out a long-term pennant or wedge, with price moving up and bouncing repeatedly off resistance around 90. The abrupt retreats could be interpreted as the result of frenzied intervention. If this wedge pattern holds, then price will compress into an increasingly tighter range and then explode upward once 92 is decisively breached.""

Read more: http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/01/could-us-dollar-rise-50.html

goldmiddelfinger's picture

Surely significantly higher before significantly lower, don't know about 50% that's a little exaggerated. BTW how's the head?

Minty's picture

I think thats a pretty sloppy wedge.  I draw that as a penenant (triangle).

 

Hephasteus's picture

Free iWins for everybody. Rock out while you starve to death!!!!

Jason T's picture

you mean soon the peasent farmers won't be accepting the Ben confetti from Washington?

Jason T's picture

end it with a bang benny boy .. a monster never before seen flash crash that dwarfs the 87's crash. 

Cdad's picture

Sweet!  I am ready to be fitted with my government tracking chip now, please.  I want to be the first, a trend setter.

Robot Traders Mom's picture

The government put a metal plate in my son's head if that counts.

tpberg7's picture

Manipulation is the heart of the Fascist business model but it is beginning to look more like the great Mystery of Babylon.

the not so mighty maximiza's picture

no wonder people are getting out of dodge

lamont cranston's picture

And on declining volume. POMO - part of a complete breakfast.

ThirdCoastSurfer's picture

This sight needs a "Like" button whose accumulative total raises comments like this to the top of the list and lowers those that don't necessarily contribute to the conversation; instead of just posting FIFO. Is it really a market if the only entities left trading are the State of New Jersey and the proceeds of PD's from POMO? 

AccreditedEYE's picture

ahhh, leave it to the Fed-funded 'Bots to keep things moving in a nice, clean linear fashion ever higher.... it's the DOWN part that they have a hard time keeping as pretty on the chart.  

Sudden Debt's picture

Nice catch seeing that one!

and eh... how did that rally in 1928 end up?

TumblingDice's picture

Moving averages tell us where to buy the dip. Kind, generous moving averages.

umop episdn's picture

Forecast: continued massive clouds of bankster paper supplying something known as 'liquidity' for a favored few.

Ferg .'s picture

I still maintain that this is a perfect storm of complacency . Sure things could continue to fizz up ( and this market has gotten mighty frothy ) but if any of the numerous latent catalysts ( EU debt concerns , insolvent US municipals and Chinese inflation to name a few )  spark then I'd imagine the sell off would be sharp and fierce .

A Man without Qualities's picture

For me, the extra kicker is the degree of margin trading.  One thing that stops sell offs being too severe is the old school buy and hold crowd  don't dump in an instant.   But look how the markets are evolving - mutual funds vs ETFs, relative value funds vs beta chasers, middle class professionals with a retirement portfolio vs 20 year olds with 50 times leverage.  Everything screams to me that the second they take their eye off the monstrosity they have created, something will come from left field and we'll have a sell-off that will break the fantasy of the fair value market for all time.

But, I don't think there's much complacency - the big boys know this market is incredibly fragile and if they let anything go, even a tiny bank in Portugal, it could start a chain of events they cannot control. 

ThirdCoastSurfer's picture

I think the "buy and hold crowd" is alive and well and is actually dominating the market.  The LTCG rate of 15% is a 20% discount to the corporate rate and high wealth's ordinary income.  A  20% correction is effectively break even to the LTCG crowd, and the market's latest momentum didn't really start until August of 2010 (especially given May's flash crash) and thus the lack of volume, volatility/corrections as the LTCG's hold on for dear life in hopes that QE2 can carry them to August 2011 (which is when QE2 is scheduled to end). 

Only a 20% correction will begin to trigger stops at this point and the 10% market trading stop  (to prevent a repeat of May) provides the LTCG gang with the ability to sleep at night while the EU burns. 

Cognitive Dissonance's picture

Overheard in the Fed's executive bathroom.

"Mission Accomplished."

JW n FL's picture

I needed that laugh this morning... thank you!

WineSorbet's picture

I'm not sure if I'm angry because we now live in a centrally planned economy or that I failed to make a shit load of easy money which they handed to everyone.

Sig Sauer's picture

meh......i'm angry about both

JW n FL's picture

do you have an extended clip?

 

do you have a Palin map?

 

do you own PM's and think its worth more than paper?

 

someone report him please.

 

time for your treatment.

uno's picture

must read article:

http://www.bloomberg.com/news/2011-01-13/traders-smaller-bonuses-still-top-pay-for-brain-surgeons-4-star-generals.html

 

An oil trader with 10 years in the business is likely to earn at least $1 million this year, while a neurosurgeon with similar time on the job makes less than $600,000, recruiters estimated. After a decade of deal-making, merger bankers take home about $2 million, more than 10 times what a similarly seasoned cancer researcher get

Crispy's picture

Good for them! A succesful trader with 10 years experience earns every penny and then some.

JW n FL's picture

see... they use sticker shock...

 

earned is un-important? just the number...

 

and then becuase wall street has bought and paid for its share of medicine... the working class is shit out.

 

it is a contest, of sticker shock.

alien-IQ's picture

And what of volume? Volume? We don't need no stinking volume!

FWIW: SPY volume has not topped 200 million in the last 26 trading days and in fact has only surpassed (barely) 150 million three times on that period.

tmosley's picture

I love how no-one questions Ben Bernanke on his math, given that he has divided the markets by zero, giving us many once in never events.

cocoablini's picture

I don't think its complacency. After 3 years of outflows and deflation, stock ownershop- unique buyers and sellers- are almost nil.
The 4.3 billion traded on the NYSE is mostly hft liquidity transactions- not real transactions. The rebate system chugging away until POMO Daddy comes in with the juice.
Its "their market"
Itsnot tradable anymore and not worth it.
Partially a success for Obama who wants to run speculation out of the market, excecpt the only ones left are uber speculators and scammers like Goldman, JP

firstdivision's picture

Statistical significance means nothing in an environment froth where the manipulators outweigh the market to move freely.  Additionally TPTB have already negated stocks to have negative movements with the "breakers" they so magically needed after May 6th.  This now allows them to auto stop trading without the need for human intervention, then decide after the fact if the movements should have been allowed or not. 

Quinvarius's picture

I suggest everyone review these charts before passing judgement.

http://www.nowandfutures.com/weimar.html

Who knows?

Rusty Shorts's picture

Wow, that looks familiar, thanks for the link.

StychoKiller's picture

Mein Gott!  Even with logarithmic range scales, those curves were parabolic!

 

theprofromdover's picture

I read it as 'Melt-up Mountain'

Well bugger me sideways

asteroids's picture

Reminds me of the tech bubble when stocks would go up day after day without any reason. Then "pop"!