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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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Thu, 01/13/2011 - 11:03 | 872877 Caviar Emptor
Caviar Emptor's picture

Philly Fed revised down. Market crumping

Thu, 01/13/2011 - 11:13 | 872919 HelluvaEngineer
HelluvaEngineer's picture

nope, already fixed

Thu, 01/13/2011 - 11:41 | 873012 shushup
shushup's picture

So far this is hardly a move down.

Thu, 01/13/2011 - 12:42 | 873235 Lieutenant Dan
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.

Thu, 01/13/2011 - 15:14 | 873709 rsi1
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? 

Thu, 01/13/2011 - 11:05 | 872880 goldmiddelfinger
goldmiddelfinger's picture

Indy metals getting their teeth kicked in

Thu, 01/13/2011 - 11:43 | 873018 Arch Duke Ferdinand
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:

Thu, 01/13/2011 - 11:50 | 873035 goldmiddelfinger
goldmiddelfinger's picture

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

Thu, 01/13/2011 - 12:26 | 873179 Minty
Minty's picture

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


Thu, 01/13/2011 - 11:05 | 872881 Star Warrior
Star Warrior's picture

Pure Genius!

Thu, 01/13/2011 - 11:06 | 872883 Hephasteus
Hephasteus's picture

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

Thu, 01/13/2011 - 11:07 | 872892 Jason T
Jason T's picture

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

Thu, 01/13/2011 - 11:06 | 872884 Jason T
Jason T's picture

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

Thu, 01/13/2011 - 11:06 | 872887 Cdad
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.

Thu, 01/13/2011 - 11:10 | 872903 Robot Traders Mom
Robot Traders Mom's picture

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

Thu, 01/13/2011 - 11:25 | 872963 goldmiddelfinger
goldmiddelfinger's picture

He is still more FOS than you

Thu, 01/13/2011 - 11:08 | 872897 tpberg7
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.

Thu, 01/13/2011 - 11:09 | 872900 the not so migh...
the not so mighty maximiza's picture

no wonder people are getting out of dodge

Thu, 01/13/2011 - 11:11 | 872910 Dapper Dan
Dapper Dan's picture

Please expound:

Thu, 01/13/2011 - 11:13 | 872918 hedgeless_horseman
hedgeless_horseman's picture

Mulligan's Valley.

Thu, 01/13/2011 - 11:45 | 873027 goldmiddelfinger
goldmiddelfinger's picture

Butcher's Crossing

Thu, 01/13/2011 - 11:09 | 872902 lamont cranston
lamont cranston's picture

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

Thu, 01/13/2011 - 16:39 | 874120 ThirdCoastSurfer
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? 

Thu, 01/13/2011 - 11:11 | 872911 AccreditedEYE
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.  

Thu, 01/13/2011 - 11:12 | 872916 Sudden Debt
Sudden Debt's picture

Nice catch seeing that one!

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

Thu, 01/13/2011 - 11:14 | 872917 TumblingDice
TumblingDice's picture

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

Thu, 01/13/2011 - 11:14 | 872922 umop episdn
umop episdn's picture

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

Thu, 01/13/2011 - 11:16 | 872929 Ferg .
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 .

Thu, 01/13/2011 - 11:55 | 873046 A Man without Q...
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. 

Thu, 01/13/2011 - 16:56 | 874212 ThirdCoastSurfer
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. 

Thu, 01/13/2011 - 11:18 | 872935 Cognitive Dissonance
Cognitive Dissonance's picture

Overheard in the Fed's executive bathroom.

"Mission Accomplished."

Thu, 01/13/2011 - 12:04 | 873079 JW n FL
JW n FL's picture

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

Thu, 01/13/2011 - 11:19 | 872943 WineSorbet
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.

Thu, 01/13/2011 - 11:42 | 873016 Sig Sauer
Sig Sauer's picture

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

Thu, 01/13/2011 - 12:05 | 873088 JW n FL
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.

Thu, 01/13/2011 - 12:42 | 873230 Cognitive Dissonance
Cognitive Dissonance's picture

P226 Elite Stainless

Thu, 01/13/2011 - 13:49 | 873444 Vernon Wormer
Vernon Wormer's picture

P229 blue steel

Thu, 01/13/2011 - 11:19 | 872944 uno
uno's picture

must read article:


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

Thu, 01/13/2011 - 11:39 | 873004 Crispy
Crispy's picture

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

Thu, 01/13/2011 - 12:09 | 873104 JW n FL
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.

Thu, 01/13/2011 - 11:20 | 872947 alien-IQ
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.

Thu, 01/13/2011 - 11:22 | 872953 tmosley
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.

Thu, 01/13/2011 - 11:22 | 872954 cocoablini
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

Thu, 01/13/2011 - 11:22 | 872955 firstdivision
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. 

Thu, 01/13/2011 - 11:23 | 872958 Quinvarius
Quinvarius's picture

I suggest everyone review these charts before passing judgement.

Who knows?

Thu, 01/13/2011 - 11:41 | 873008 Rusty Shorts
Rusty Shorts's picture

Wow, that looks familiar, thanks for the link.

Thu, 01/13/2011 - 19:16 | 874730 StychoKiller
StychoKiller's picture

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


Thu, 01/13/2011 - 11:24 | 872959 theprofromdover
theprofromdover's picture

I read it as 'Melt-up Mountain'

Well bugger me sideways

Thu, 01/13/2011 - 11:27 | 872973 asteroids
asteroids's picture

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

Thu, 01/13/2011 - 16:07 | 873946 ToddGak
ToddGak's picture

Except a lot of that was retail investors.  This is all banana bucks, and if it tries to pop they'll just flip the circuit breaker and stop all trading.

Thu, 01/13/2011 - 11:27 | 872976 lizzy36
lizzy36's picture

The reasonable explanation for this, is that Wanger hired 14 juniors at minimum wage for his scrap furniture business. 

Ergo the economy is getting MUCH stronger. Market is a perfectly efficient machine.


Thu, 01/13/2011 - 11:56 | 873050 Hephasteus
Hephasteus's picture

I thought it was a dildo store. Sitting on wood is just the "code" word.

Thu, 01/13/2011 - 13:20 | 873347 IrishSamurai
IrishSamurai's picture

Coffee meet keyboard.

Keyboard coffee.


Thu, 01/13/2011 - 11:28 | 872977 erik
erik's picture

Muni bonds are selling hard today.  Looks like the muni bailout chatter will begin soon.  That should not help the USD cause, but if they let the muni problem become an overall market problem then the USD could rise until the bailout.

Very important to watch the USD here.  It is beneath its 50 day moving average; however, it has not closed here yet. 

Thu, 01/13/2011 - 11:35 | 872993 Cdad
Cdad's picture

There will be no muni bailout.  The call that there will be smells like sell side capitulation...and I don't buy that one.  I have exactly one milligram more faith than that...

Thu, 01/13/2011 - 11:52 | 873041 erik
erik's picture

Cdad, I wish you were right; however, recent history suggests there will be a bailout once things get bad enough.  I don't know what bad enough is though unfortunately.  There will be a huge fight over it though as the Republicans will be 100% against bailing out the blue states of CA, IL, NY.  Those states are the core of Democrats power.  That's what makes the muni bailout ten times more interesting than the bank bailout.  It will be an ugly political issue.

Thu, 01/13/2011 - 12:28 | 873186 SheepDog-One
SheepDog-One's picture

Cdad I think you're right, the states will be left to swing in the breeze. They'll have to take it out on their own like Illinois just did with their 66% (lol nice number) tax raise! Bleed the peasantry dry will be what the states have to do...theres nothing in it for the FED to go bail out municipalities!

Thu, 01/13/2011 - 14:25 | 873556 Saxxon
Saxxon's picture

Study what Moonbeam wants to do in California; make one-time tax increases 'sorta permanent' and use the revenues to help the counties pay their way before he cuts loose a slew of traditionally state-funded services.

Thus the savings are passed along to the counties.

Thu, 01/13/2011 - 12:29 | 873190 the rookie cynic
the rookie cynic's picture

Question: Is it now the TBTF banks chance to "bailout" munis and states via punitive interest rates ala Greece and Ireland? That would make the circle complete. US taxpayers bail out the big banks so they can restructure all state and muni debt at more punitive rates.


Thu, 01/13/2011 - 12:56 | 873267 SheepDog-One
SheepDog-One's picture

What taxpayers? Losing about 450,000 of them weekly.

Thu, 01/13/2011 - 16:28 | 874061 the rookie cynic
the rookie cynic's picture

Nominally, number of taxpayers going down. Real taxes going up due to secret tax of inflation and putting every American, taxpaying or not, further in debt via fiscal irresponsibility of Congress.

Thu, 01/13/2011 - 11:30 | 872980 Quinvarius
Quinvarius's picture

All this talk of melt up.  This is nacho your grand pappy's stock market.

Thu, 01/13/2011 - 11:32 | 872986 whatz that smell
whatz that smell's picture

IF (92 days without closing below its 50-day average, which has been matched only 17 other times since 1928)

AND (the market has not closed below the 10 DMA once during the past 30 days)



Thu, 01/13/2011 - 11:35 | 872992 Gimp
Gimp's picture

DOW 36,000

It is in the USSA's National Interest to keep it going up , up and up...

Thu, 01/13/2011 - 11:38 | 873000 maui73
maui73's picture

maybe i am wrong but i found 22 times when the closing price did not been under the 10dma. the last occurence was between feb.16-apr 1 2010. it took 42 days

Thu, 01/13/2011 - 11:55 | 873047 Tyler Durden
Tyler Durden's picture

Don't misread: it is the combination of the two: There were two times it went at least 90 days above its 50-day average, and 20 days above the 10-day average. No other time periods in history were even close to this kind of trend persistency.

Thu, 01/13/2011 - 12:08 | 873103 maui73
maui73's picture

thx. i only examined the 10dma.

Thu, 01/13/2011 - 12:30 | 873194 SheepDog-One
SheepDog-One's picture

Well certainly theres never remotely been this level of fraud and outright manipulation daily in this country anyway...makes the dotcom bubble and even the housing bubble look like mere childs play.

Thu, 01/13/2011 - 11:45 | 873023 Beatscape
Beatscape's picture

That is unbelievable and points to very over bought conditions... We are seriously overdue for a drop. If nothing else, the Fed manipulators have to at least make equities look like an somewhat average market and toss in a down day or their cover is completely blown.

Thu, 01/13/2011 - 12:06 | 873089 Cdad
Cdad's picture

I agree.

It is always a hard call to make in the New Banana Republic Tree nation of America...but I think the market looks quite weak this morning.  I don't think the second half of the session is going to work out all that well, but I am waiting for the world's largest zombie maker to tell me to liquidate my few remaining long positions...which would then cause to to go entirely nuts playing Whack-a-Mole with the world's largest petroshrimp server.

Oh yes, I agree.

Thu, 01/13/2011 - 12:43 | 873240 Ludwig Van
Ludwig Van's picture


Re. Blown Cover -- You're obviously thinking rationally. I'd say the Fat Boys are pretty much out of the closet now. Flagrant and alluring and dick-leading as the slut our mamas told us to stay away from.



Thu, 01/13/2011 - 16:13 | 873983 ToddGak
ToddGak's picture

Nah.  There is no cover to blow.  99% of people have no idea what POMO is or what the Fed does.  And if there is a sell off, they'll throw the circuit breaker, and give the PD's a chance to buy back in at better cost basis.

Thu, 01/13/2011 - 11:59 | 873060 onlymyopinion
onlymyopinion's picture

As long as the economic recovery continues to strengthen, there is no catalyst to sell any long positions.  As for records, they're meant to be broken.  Still expecting a 3%ish pullback after Q4 earnings finish up.  Should be a good buying opportunity for those not currently long.

Thu, 01/13/2011 - 12:54 | 873213 SheepDog-One
SheepDog-One's picture

Oh wow, Zerohedge has created yet another shit stirrer? 'There is no catalyst to sell any long positions'...huh better tell that crowd that just dumped $43 billion worth of longs since the start of the year jackass.

Thu, 01/13/2011 - 13:10 | 873310 onlymyopinion
onlymyopinion's picture

Gotta take profits sometimes no?  Hopefully they're smart enough to buy back on any pullback or they may end up kicking themselves later when the Dow is over 13k and Snp's at 1400+ later this year.

Thu, 01/13/2011 - 12:00 | 873065 funkadelic
funkadelic's picture

They've done it this long why can't they do it forever?  Right?  I mean its definitely working.  They are just awesome at the Fed.  Yea, party on.

Thu, 01/13/2011 - 12:32 | 873202 SheepDog-One
SheepDog-One's picture

Its working? Well maybe to those who are simply looking at the movie being shown on the curtain to keep the sheeple placated since theyve been well trained to believe 'DOW=economic soundness'....however behind the curtain there is complete chaos.

Thu, 01/13/2011 - 12:00 | 873067 vitoox
vitoox's picture

To be precise , it's named People's Commissariat for Finance - Narodnyi komissariat finansov, or shortly Narkomfin. (But who are these People - is up to your  knowledge).

Thu, 01/13/2011 - 12:05 | 873087 Mad Max
Mad Max's picture

Like many rational investors, I've been pulling out of the ponzi market because of signals like this.

But I find myself wondering more and more: what if the whole point is to drive everyone else out of the market, so that the fed and a few key banks end up owning effectively all shares in all major companies?  Sure, those shares may be overvalued at present, but if they own all of them, then they would have effectively taken over most of the economy, right?

Please tell me why I'm wrong.

Thu, 01/13/2011 - 12:34 | 873206 SheepDog-One
SheepDog-One's picture

Sure, same thing Rothschild (Bauer) did to England in the Napoleonic wars, this banker takeover is just more high tech.

Thu, 01/13/2011 - 16:16 | 873998 ToddGak
ToddGak's picture

I think the point is to fund the government, since no one else will, and keep interest rates down.  But, your observation I think is a fantastic side effect for the PD's and banks, that they are not complaining about at all.  Then they can just trade with each other and take commissions.

Thu, 01/13/2011 - 12:22 | 873163 whatz that smell
whatz that smell's picture


Thu, 01/13/2011 - 12:41 | 873229 HarryWanger
HarryWanger's picture

A I've said a hundred times, until AAPL starts trading lower, the market continues higher. And guess what, AAPL continues on a tear upward. Soon to be the largets company in the world, it still has big growth ahead. No way SPX can fall in any meaningful way when such a gigantic company keeps growing by leaps and bounds.

Thu, 01/13/2011 - 12:48 | 873243 SheepDog-One
SheepDog-One's picture

Applemerica! LOL, soon everyone will be starving and looking at $5 gas, but its all good because the rioters will all be rocking out with Igizmos in their ears while taking riot police clubs to the head...and I hear the 3 AM icewater tub plunge is far more tollerable as long as youve got an IMac loaded with Itunes... I knew ZH would wheel out your sorry pot stirring ass again eventually Harry.

Thu, 01/13/2011 - 13:01 | 873279 Withdrawn Sanction
Withdrawn Sanction's picture


Out of curiosity, HW, how’s business?  I find it insightful that you have time to blog when you claim your business is going gangbusters.  Ought you not be ringing the register, helping customers, restocking shelves, or ordering new inventory?    Just wondering about the obvious disconnect here…


Thu, 01/13/2011 - 13:16 | 873330 HarryWanger
HarryWanger's picture

Holidays are over. That's our huge season. I'm not a day to day participant. I own the business and have a great management team. Right now, I'm putting together our 2011 outlook. I need breaks. ZH is a good outlet for that since it seems to somehow see the exact opposite of what my business sees.

Thu, 01/13/2011 - 13:18 | 873339 Bill Lumbergh
Bill Lumbergh's picture

Famous last words of "no way" can Apple ever go down in price when growing by "leaps and bounds"...better watch out for that ascending broadening wedge which points to a target of $150 if fulfilled.

Thu, 01/13/2011 - 13:42 | 873419 HarryWanger
HarryWanger's picture

Yes, I will keep waiting for that to happen. Let's see that would put AAPL p/e at about 7. Don't you see how silly you look?

Thu, 01/13/2011 - 15:06 | 873681 Bill Lumbergh
Bill Lumbergh's picture

Not as silly as your notion that Apple will power the world economy and everything else does not matter.

Thu, 01/13/2011 - 16:21 | 874018 ToddGak
ToddGak's picture

Don't forget, Steve Jobs is very ill, and his health could deteriorate at any time.  Before he came back, their stock was under $10.  Not saying it would go back to that, but any health scare and there will be a big selloff.

Thu, 01/13/2011 - 16:48 | 874168 Ned Zeppelin
Ned Zeppelin's picture

Apple is merely a consumer non-essential-gadget maker, its products are fungible with others, and its descent is a matter of when not if. Gravity never sleeps.

Thu, 01/13/2011 - 16:54 | 874200 kornholio
kornholio's picture

wangers world veiw, "as long as apple keeps going up the economy is fine"....what a fucking maroon....

Thu, 01/13/2011 - 12:28 | 873184 Tsunami Effect
Tsunami Effect's picture

Proof of the Fed's algo for the "foreign buyer" in the ES markets that shows up on down days is in full effect!

The S&P isn't up 45% since Aug '10, it is a 45deg angle though. 

Do you think that the Plunge Protection Team is staffed by the same 20-something crew at the FRBNY?

Thu, 01/13/2011 - 12:43 | 873238 Sofa King
Sofa King's picture

My high quality Theoretical Physics and Electrical Engineering vocational eduction from some of the best Teachers Assistants at one of countries finest engineering Universities has taught me that there is no such thing as Melting-Up.  It's called boiling and when something boils within a sealed vessel it builds up massive amounts of pressure then it explodes when it can no longer be contained.  I'm just saying...

Thu, 01/13/2011 - 12:51 | 873261 SheepDog-One
SheepDog-One's picture

Damn straight. Hell I can even see that and I dont even have all your fancy book-learnin neither. Learnt it myself from messin with the relief valve thingy on grandads corn squeezins still.

Thu, 01/13/2011 - 13:12 | 873322 cclaeys
cclaeys's picture

Did the fed author those books?

Thu, 01/13/2011 - 13:09 | 873302 SheepDog-One
SheepDog-One's picture

Indeed, nothing new under the sun. And in 2000 everyone was saying the same thing as today, 'buy anything hand over fist...this time its different'!

Thu, 01/13/2011 - 14:28 | 873563 Tsunami Effect
Tsunami Effect's picture

you're right.  no attention to valutation.  just clicks and eyeballs!

that "melt up" lasted a lot longer than most expected and prices went parabolic.   that's happening again now w/ tech stocks and so much more.

Thu, 01/13/2011 - 13:05 | 873289 Missiondweller
Missiondweller's picture

"..during this time 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."


Do we need any more eveidence the Fed is buying the S&P? I wonder what the average S&P stock Beta is at now, .95? Higher? If you are in the equity market I'd keep some tight stops, but hey, we know right where to place them don't we?

Thu, 01/13/2011 - 13:16 | 873331 cclaeys
cclaeys's picture

fuk the SP - you want some irritating shit to trade then go look at IWM/RUT...jaysus fuckin christ, these cocksuckers have everything trading at 100x...RAX, RVBD, KRE, DECK, PAY, etc - all of Robo's babies...fucker! About to plunge on the sword trying to trade TZA, fuck these dudes, I am going to cash out and pay my mortgage, let them take money from each other and the suckers because I cant find one single thing that says buy me, I have value.

Thu, 01/13/2011 - 14:41 | 873600 Saxxon
Saxxon's picture

Could not agree more re valuation.

The Song of the Bulls right now reminds me of early 2000 but there were no Bears at that point (they were called Contrarians then), whereas now there is a clamorous, embittered, exasperated Bear Vox Populi.

Thu, 01/13/2011 - 13:05 | 873290 Withdrawn Sanction
Withdrawn Sanction's picture


There is a widespread (and erroneous) belief that the Fed is omnipotent.  It is not.  It is an institution composed of individuals—fallible individuals prone to hubris and overplaying their hands; subject to the same laws of behavior and mathematics as the rest of us.  I mean think about it:  How can a clutch of people in DC and NYC know and bring about the “right” level of interest rates (or quantity of money, or house prices, or whatever)?   The fact is, they cant and I think they know it.   But whether they know it or not, the rest of us need to know and remember their basic impotence. 

While it is true, the Fed can make the supply and demand curves for US Treasuries and MBS jump around—just like a doctor can make a cadaver jump around by applying electricity at certain points to the corpse—the Fed cannot confer value anymore than the doctor can reanimate life.   Dead is dead, whether it’s cadavers or CDOs.

A manipulation game like the Fed is conducting simply devolves into a smaller and smaller circle (of) jerks gong through the motions.  To use another electricity analogy:  Just as one can temporarily restore the lights by jamming a penny in the fuse box, doing so will not address the underlying danger.   Indeed, it makes catastrophic failure much more likely and immediate. 

One of the least appreciated insights of Mises w/r/t the falsified data sent by manipulated interest rates was the idea that to keep such a game going (esp as honest players leave), the amount of money required grows exponentially.  That is, to maintain, say, a 5% growth rate in stock prices requires absolutely more dollars with each successive climb in prices.  Should the influx of money drop (or even fail to maintain its growth rate), prices too will drop.  At bottom, it is this simple bit of math that will be their undoing.   


Thu, 01/13/2011 - 14:42 | 873609 Saxxon
Saxxon's picture

Agreed. One could argue that W lost the election with the 2007 plunge - why didn't he 'control' it if he 'could'?

Thu, 01/13/2011 - 16:27 | 874054 ToddGak
ToddGak's picture

Well put sir.  But if the Fed can create money out of thin air, and pass it along in exchange for bonds, why can't they keep increasing the amount forever?

I imagine if the PDs lose their appetite for bonds, the Fed will just buy them directly from the government, and come up with a clever acronym/euphemism to describe it.  In fact, I can't see how that WON'T end up happening.

Thu, 01/13/2011 - 13:45 | 873429 onlymyopinion
onlymyopinion's picture

Melt up?  Snp's only up 5.6% since last April 23rd (1217).  I wouldn't exactly call a move of 5.6% in 8-9 months a melt up. 

Thu, 01/13/2011 - 15:27 | 873754 whatz that smell
whatz that smell's picture

Algorithm: Have you ever heard of machine code politics? Neither have I. Machines don't have politics. They're very… brutal. No compassion, no compromise. We can't trust the robotrader. I'd like to become the first… HFT politician. Y'see, I'd like to, but… I'm afraid, uh…

Human: I don't know what you're trying to say.

Algorithm: I'm saying… I'm saying I – I'm a program who dreamt he was a man and loved it. But now the dream is over… and the machine code is awake.

Human: No, no, no…

Algorithm: I'm saying… I'll hurt you if you stay.

Thu, 01/13/2011 - 15:47 | 873837 pile of poop
pile of poop's picture

how do you get 45% ??  The low was around 1020 in July and 1040 in August... so it's not anywhere close to 45%.

Thu, 01/13/2011 - 15:53 | 873869 banksterhater
banksterhater's picture

Bernanke said QEII is working because " THE RUSSELL 2k IS UP!" He's fucking watching the IWM every day, saying "it shows small business is improving..."  THAT'S NOT HIS FUCKING JOB!

Thu, 01/13/2011 - 20:37 | 874931 No More Bubbles
No More Bubbles's picture



It's not supposed to be his job, but it has been since March of 2009.


P.S. - TYLER - I'M GETTING REALLY SICK OF YOUR BULLSHIT CAPTCHA!  I enter the right answer which is often a negative # and use the - sign to do it, but it says that's WRONG!  WTF!

Thu, 01/13/2011 - 17:15 | 874310 dcb
dcb's picture

the graph I drew since the ebottm using trend channels show that the market hasn't been this overbought since then.

other factor is quant algos, once more 3you have to draw the speed lines. buy on the speed lines. always it break out of this and the quant pushes it in. see last 15 minutes today. that is why it is so awful to trade. each and every time it breaks the also pushes it into the speed line. so just when you be short because of the break you get burned

Thu, 01/13/2011 - 17:15 | 874311 dcb
dcb's picture

the graph I drew since the ebottm using trend channels show that the market hasn't been this overbought since then.

other factor is quant algos, once more 3you have to draw the speed lines. buy on the speed lines. always it break out of this and the quant pushes it in. see last 15 minutes today. that is why it is so awful to trade. each and every time it breaks the also pushes it into the speed line. so just when you be short because of the break you get burned

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