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Time to Get Out of Dodge
Today's heavy volume smells a lot like billions of mouseclicks ejecting stocks. All the Fembots supervising the motion chasers were getting flogged and horsewhipped if they did not immediately eject out of their positions. The market is basically issuing a "no confidence" vote on Washington's policies.
The skying of regional banks today was an anomaly. A huge boatload of stocks were crushed today:
Could it be a fakeout? Anything can happen.
But it smells like me that it is time to "Get Out of Dodge"....
Unless GOOG gaps up $50 points after hours....
LOL.....
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This was not the "market" talking. It was a bunch of algos following movement. The market consists of investors and traders, with the bulk of the sticky money being controlled by the former.
The market, or at least the investors in the market, lost confidence in the sham and pulled out in the 1st to 3rd quarter of '09. The real hardcore fundamental guys were either short or sidelined.
Mayhap a true correction that goes way, way down will bring the real money and the real investors back to the market.
+11
Just in time for the Hype!
I expect that when the "correction" begins in earnest, we will see 80 point plunges in the S & P, followed by small corrections. Then when the multiple 30 - 40 point plunges materialize thereafter, CNBS will proclaim all is well since "it's getting less worse."
I expect to see these kinds of moves all year as the carry trade winds and unwinds every time the helicopter loudspeaker is makin noise. Gonna be a fun year. Ill actually enjoy watching it as i have ZERO money in us markets now! wooohoo
Same boat. Aside from token shorts the patience game is on.
Same boat. Aside from token shorts the patience game is on.
I can't wait to see what happens when/if the Fed MBS buying stops.
We will subtitle that moment in history as:
The Moment America's Social Fabric Was Run Through a Shredder
The market started flashing technical weakness and bearish volume divergence back in July, obviously the fundamentals don't support the market "strength". We will see the averages back at July levels pretty quick if today was any indication, volume was no problem today.
SPX broke down out of a 6 month rising bearish wedge the past couple of days, dating back to late July. Ditto the DJIA. Prob is, fundamentals, technicals still don't matter schitt if the permanent BID guy keeps jacking up futures every time news comes out good, bad or indifferent. Asia is absolutely getting hammered tonight and he's kept the Dow, SOX and NAZ flat to up slightly. Of course, he did that LAST night too...
Right on Reggie
I agree , SPY was consolidating in the $89 to $95 channel for over 2 months around June/july and in august it started moving up. Id like to see it down there again to properly reassess the direction without stimulus.
You got that right Jack.
Algos following the market. How come until now its been all upside and it seemed that the market was being forced up.
Better get the fuck outta dodge...they are!
A buddy of mine sent me Bob Prechter's latest comment, warning the bear market is back (sigh!). President Obama spooked the markets...LOL...and the old song & dance continues. Nothing has changed folks except for the players. The liquidity rally will keep grinding higher.
Today's market action:
Most active gainers:
NYSE
Nasdaq
Amex
Most active decliners:
NYSE
Nasdaq
Amex
Only if the liquidity continues, and nothing spooks the algos.
I don't know if the top is in or not and Prechter certainly has a terrible track record for the most part, but how is your response to today's action anything other than EXACTLY the kind of bullish complacency one would expect to see at at top?
"Liquidity" didn't stop a lot of trendlines from the March lows from being decisively brokent today, that's for sure.
An asteroid could be coming towards the Earth,
"Armageddon"-style, and Leo would still be talking
down to people for not calling it bullish
for the markets.
If I'm not mistaken, he keeps saying the market will rally on "liquidity" until February. Well, it's January 22nd tomorrow, so while I have to give him credit for being right until now, it's probably within the margin of error to say it could be over. It's the complete lack of the consideration that the rally is over that smells of complacency.
Like I say, I don't know if the top is in or not. I did get stopped out of a long trade in the late afternoon, so even though the market showed enough strength to give me a long signal, it was not sustained. This is a signal with ~66% accuracy, FWIW.
Now that you mention it, the Yellowstone seismometers have picked up an awful lot of quakes >3.0 in the Yellowstone supervolcano caldera in the last few days (just a few clicks northwest of Old Faithful).
http://www.seis.utah.edu/req2webdir/recenteqs/Maps/Yellowstone.html
Whew...Financial meltdowns, then Haiti, now Cawlifawnia....queue the Armageddon-ites.
Seems we are about due for another Patty Hearst. Who will it be?
how bout this Volcker was married 9/11/54. Is someone
trying to tell us something?
Just some harmonic tremor; nothing to see here. If it picks up maybe you should short ADM.
The greater cash flow crunch that started in 2007 will overwhelm and swallow the "liquidity" rally like a little minnow.
$1.5 Trillion is a joke compared to the amount of leverage already destroyed and that which will continue to be destroyed. A ban on prop trading will only be a catalyst to accelerate things to the downside.
I think the people of Massachussets have ruined the Keynesian spend orgy, Leo.
Good luck anyway though. There wouldn't be a market without differeing opinions.
BTW, did you buy Chinese solars on the dip yesterday or today?
No, not yet, but the ones I am looking at now are the following:
http://finance.yahoo.com/q/cq?d=v1&s=csiq,jaso,ldk,sol,solf,stp,tsl,yge
Look at the volume on these puppies. The big hedgies brought them down to scoop up more at these levels. I will buy more next week.
http://www.rand.org/pubs/monographs/MG776/
Zbigniew Brzezinski and his buddies comment on solar (and other stuff).
Today's market correction had nothing to do with Obama. It's been looking for a pullback technically anyway.
The market got to the top of it's rising wedge a few days ago, and was severely overbought on stochastics.
To blame the decline on Obama is like blaming the decline on pink elephants. The rising wedge broke, that's all.
Hold on a sec... that sounds like a reasonable explanation. Where's the conspiracy theory? Where's the bottled up "I told you so!" diatribe spilling out onto the keyboard? Are you sure that you should be posting on ZH??
Is these same stochastics in overseas markets as well?
Better to walk into tomorrow without charts in a
bear market. It is so farfetched to say Obama had
nothing to do with today's market sell off. Keep
peering at your charts. What will the markets do
next Friday when private sector jobs shows -40,000?
Because that's the early call.
How are those Chinese Solar Stocks working out for you?
Ummm ... You base this on what, exactly?
I'm going to remember that quote, and call you on it if you're wrong.
Ya know Leo, I like what you do with Pension Pulse...
Well thought out and accreditive to sound discussion
but this pumping liquidity/trading thing of yours smells of collusion with the hypocritical PTB. Respect will not be forthcoming even if you prove to be right.
You again there is a time and place for everything.
clearly now is not the time and place to be bullish
on US stocks.
"President Obama spooked the markets..."
It was a rather niggardly retreat as it were.
Lulz, Leo, lulz. How's that initial-claims-upside-surprise investing theme working for ya?
How about if GOOG gaps DOWN $30 after hours....
A near future term, "You got goog'd!" And yes it will be a bad thing.
Specific reaction to their Q4 earnings, don't you think?
nice avatar
Moronic comment in the author's post. This is not a "no-confidence" signal, that is the signal the market was giving from 2007-2008 as the market's lost everything they had gained for a decade. Then we had a rally on the back of the market believing the government would prop up everything and give Wall Street whatever it wanted. Today it was made clear that Wall Street is going to pay a price for the trillions of tax payer dollars it's received. Today the market was telling you that the free looting of the taxpayer is OVER!
ummmmmmmmoookay....The dog and pony show will continue.
At the very least, you have stated well what we are supposed to conclude from all of this. Does anyone else feel these sudden, yet fully formed and completely contrary to immediate past history histrionics on the part of Obama feel a little. . . contrived? I still detect the stench of Goldman et al in the room. The TBTFs were probably all short their own stock today. Let's face it: there is a White House list of what gets pounded for the benefit of the MSM every singel day, this day was no exception, and it is a small thing to leak that list.
I like where this is all going, don't get me wrong, I just feel like we're headed into a nice seemingly quiet ravine full of Apaches and it is 1863.
I think that the decline had nothing to do with any news event. The market has been approaching the top of a rising wedge forever now, and the chart of every major index finally ran out of room. Once each broke below the wedge, it's now time to go find support.
It should be obvious to everybody here that the market doesn't really react to news. It's been going up on bad news since the technically oversold low in March of last year. Now it has been technically overbought, and there was no more room in the chart pattern to alternate between.
Now people are going to say that EWI people practice voodoo and this and that, but many ellioticians have been calling for this pullback.
In a way, the staff of the TBTF are short their stock today, as we are entering the period where you reference the share price for the bonus awards. Having the share price drop 10% now, when they only vest in 2 years time, sounds like a decent deal. Most bankers who still had jobs did very well on the timing of bonus awards last year as well...
The taxpayer has very little left, fait accompli. Happens every time..
Buy volatility. Period.
Sell volatility for 2010 - this will be the contrarian trade of the year!
Better late than never, you could have nailed the low if you made that call last week.
http://stockcharts.com/h-sc/ui?s=$VIX&p=W&yr=3&mn=0&dy=0&id=p58375642300
How about sell period. And go into bonds. Ever think
of that?
The last 2 days is nothing more than Geithner having a temper tantrum after the Brown election. He'll turn on the buy programs again, after Helicopter Ben is re-affirmed.
BTW, I was expecting this to happen:
http://www.businessinsider.com/big-banks-have-already-figured-out-the-loophole-in-obamas-new-rules-2010-1
Big banks have already begun poking the holes in Obama’s new rules—holes they expect their banks to pass through basically unchanged.
The president promised this morning to work with Congress to ensure that no bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.
But sources at three banks tell us that they are already finding ways to own, investment in and sponsor hedge funds and private equity funds. Even prop trading seems safe.
A person at one big Wall Street bank said it expects that new regulation will affect less than 1% of its overall business.
The key phrase is “operations unrelated to serving customers.” The banks plan to claim that much of the business in which it engages is related in one way or another to serving customers. Even proprietary trading, for instance, can become related to customer service if it is done through internal hedge funds in which some outside clients are permitted to invest.
One insider at a bank pointed to JP Morgan Chase’s ownership of the hedge fund Highbridge Capital. It is thought that under a strict “no hedge funds” rule, Highbridge would have to be sold off. But under the rule proposed by the Obama administration, Highbridge can be retained by JP Morgan because outside clients are permitted to invest in it.
A still more devious way is to have a banks own employees be the customers who are invested in the internal hedge funds. That way trading operations can remain closed to outsiders while the regulatory requirement of relating the trading to customer service is met. Goldman Sachs is rumored to be considering this approach. (Goldman isn't commenting on the regs right now.)
“This thing is about showing the public that Obama is standing up to Wall Street. So the rhetoric is heated. But the implementation will require far less change than people think right now,” a person familiar with the thinking at the upper echelons of one of our largest banks said.
“The market is getting this wrong by selling off the megas,” a person at another bank said.
Kind of funny to think that Wall Street thinks that it's already figured out a way around regulations that haven't even been written yet. Clearly, trying to game regulations is a full-time job for a lot of people on the Street, but publicly stating how you plan to do it when the regulations' final wording isn't on paper seems a bit premature.
Of course, the fix could be in so solidly that even telling the regulators how you plan to beat the regulation doesn't matter.
GS and JPM probably wrote the legistation.
Sure, but the rules of political kabuki theater would dictate they keep that on the down low for the moment, then the government can act surprised years later when one of those still-operating internal hedge funds blows up and needs to be saved.
@ Uno Too much uncertainty to be long GS or BAC or JPM. Paul Volker has been working on this plan for over a year and has built a coalition. Now Bama has joined. Let's face it, Goldman is really a hedge fun. If you don't have the balls to short these casinos then get out of the game.
Connect the dots, panic reigns till November.
Time for another crisis.
Main Street to Fraud Street, "SHOW ME THE MONEY!"
You know it's bad when Robo doesn't include the ladies in his post. =-(
Good observation...Come on Robo, some eye candy please...
Yeah! Some more Allesandra Ambrosio, por favor!!
hahahah, good point. now were gettin serious.
its Robo's tell....
O...M...G.!!!!!! You are sooo right! So that must mean....
RUN FOR THE HILLS!!!!
Let's see.....banks raised new equity capital last year for what purpose? To pay bonuses. Bad capital position still, so what do they do: pay bonuses. Stay on the Taxpayers' Boob all year, then pay back TARP before the clock strikes 12:00 on 31 December so that they can: pay bonuses.
Goldman paid out 120% of profits (shareholders applaud!)
Morgan Stanley paid out 60% of REVENUES!
They know it's over. The beast is dead. They're stripping as much meat off the carcass as they can before the real vultures arrive.
Uh... werent the last "big volume sell-offs" just good buying opportunities?
Looks like the last big volume down day was Oct 29?
On the flip side of that, one could argue that the very best time not to buy the dips is the point at which everyone thinks buying the dips is a good idea. Keeps fresh buying coming in all the way down in a bear market, no?
Does everyone think "buying the dips" is a good idea? Have we even had a dip yet?
Stocks are 3-4% off highs. Gold is 15% off highs. Which is in correction?
My take on My Favorite Things from the Sound of Music:
When the Dow breaks, when the market drops,
When I'm feeling sad,
I simply remember my DXD {and SDS, QID, and FXP}, and then I don't feel so bad...
Or in the immortal words of Austin Powers, "Yeah Baby!!!"
+1
Biggest volume in the big ETFs I've seen in a good long while. Volume usually points the way, so, we may have seen the highs in the market for a while.
Ok, come on. This all has to do with China pulling lending recently. China is not buying our bonds and now their "consumers" are buying on our stocks because they can't get loans or margin accounts. This is just 2000 all over again except China and the US are in opposite positions.
I thought it was more like a collective recognition that adults may soon be home and it's time to behave. Interesting behavior on Obama's part - it could be that we look back to the Brown win as the same as March 9 - pivotal dates. Time will tell.
Bernanke's confirmation. I'd rather he be in the Chairman's spot when he is forced to resign, than sitting in Princeton laughing at the whole thing.
Agreed. I want to see him admit that he knows nothing, among other things.
Strictly an oil/dollar play, kids.
Step one: Oil price rises to Eighty dollar a barrel or a bit higher.
Step two: Oil prices retreat from the high on 'inventories' or some other nonsense.
Step three: once the dollar floor is affirmed, US equities break.
A weak dollar would result in +90 dollar oil. Gold would push past 1200 dollars an ounce. Oil prices at that level would be a headshot with a .44 mag to the economies. By keeping a lid on prices, KSA tries to keep a meltdown at bay.
Keep in mind that oil over 35 dollars a barrel is fatal to most of the world's economies which is why this recession will never end.
also keep in mind that oil <$60 = fundamental breakdown of law and order and social and political chaos in the OPEC nations.
also keep in mind that oil <$60 = fundamental breakdown of law and order and social and political chaos in the OPEC nations.
Goog down $26 in after hours trading, tomorrow should be fun probably a sell off with the usual Monday high next week....
Big sell off?
Up 10 months in a row is an extreme "outlier" event in the history of any and all markets. ...70% rallies are extreme outlier events. SPY $87.59 is my call on this retracement.
http://www.youtube.com/watch?v=FnMLGkj91Og
DJ 4000 by early 2011....
Yep... 3.5% off highs. We must be headed WAAAYYY down.
How's that logic working for you guys?
What logic drove it up for 10 months? A normal retracement in a bull market will take the SPY back to $87.59.
The question is, is this a bull market?... I say no Fucking way.
Your name becomes you.
Were you this adamant about questioning the logic of those who were bullish after a 3.5% rise from the March lows?
Its not about logic, the market goes up, the market goes down. We have bull markets and bear markets, this market is flat for 10 years (unless you measure it against your cost of living, in that case it is way down).
The market just rallied 70% now it will retrace 50% of that move, that is what markets have always done. If we are in a bear market as I suspect, it will retrace more than 50% because that is what bear markets do and have always done.... Maybe its different this Time?
What?! This is just weak thinking.
The 2003 bull market is up ~45% on SPX. Retracement from peak in 2004 is only -8% and it finishes the next 3 years up 10% each with no 10% corrections.
AND -- that was coming off a stock bubble!
Didnt retrace 50% in 92,93,94 either... more like 35%, off more modest moves (+19%, -8%). Retrace was due to large rate hikes in 94... and then we all know what happened after 95.
Bagholder
Flat for 10 years is not a bull market. See at you at SPY $87.59 and we can go over it again.
Read this again very carefully Bagholder,
this market is flat for 10 years (unless you measure it against your cost of living, in that case it is way down).
Fading big 10-yr asset class moves (up or down) is probably the right idea, no?
Listen carefully... very generally-
You WANT to be long stock when the last 10-yrs are bad.
You WANT to be short gold when the last 10-yrs are good. (or whatever asset)
Now, other local factors matter. Like did we just have a big top/bottom and which way is the business cycle pointing? How do leading indicators look? How do broad indicators like lagged short-rate, lagged inflation look, credit spreads?
Then you always want to out-perform your risk exposures by 10-20%/yr... thats called "alpha". It really helps.
Where's all the gold chatter?
buying the dip, duh
"You WANT to be long stock when the last 10-yrs are bad."
Ah, escuse me Okii BaguHodaru-san, but I speak Japanese, so can you please esplain what you mean and I must do same to Nikkei? Ona gai shimasu.
Whatever happened to the CRE monster in the closet?
CRE is going down the tubes right now. Are you living in reality ?
Holy crap. The Nikkei is getting POUNDED. -2.79% as of 9 PM EST!
I think I found your missing link, Missing_ Link.
http://www.bloomberg.com/markets/stocks/wei_region3.html
Bye Dodge. Had a GREAT time. Let's do it again sometime.
Replace Geithner with Grayson.
Tks RobotT, you post good stuff and great graphics. Tyler and Marla and ZH thanks... keep pushing the curve!
Bugs:
"Panic reigns till November" of what year?
SSEC just broke down fro a large triangle it had ben in since July. This whole equities thing is looking to come unglued in a hurry. TA is not dead, btw. I was on here talking about silver as it restested its wedge apex, and boom, went down like a stone after that. The major indices all formed second small wedges after their first big wedges. I have not seen that before, and I dont know if it was due to intervetion, but 2 perfect ascending wedges on top of one another sounds like very bad news to me.
Robo -
"The market is basically issuing a "no confidence" vote on Washington's policies."
are you kidding me? we don't have a "market", and you know it; we have a bankster-managed farce. Today, the banksters tanked the farce to send a message to Obama. Investors had nothing to do with it.
Ned Z:
The Brown election is a side show. (not that you suggested otherwise) The real pivotal date event today for me was the announcement in my town of the bankruptcy of the largest local commercial real estate developer who has had a hand in past projects with values of up to $400 million dollars - and that's big $ around here. Last weekend it was a (family owned) local bank on FDIC watch list. They need a cool $30 million dollars to stay afloat. I bet the family decides banking is no fun anymore.
"As in the macrocosm so in the microcosm". Zerohedge does a great job on the macrocosm. As to the microcosm - everyone, stop and take a good look around you. And when I say good look I mean right down to the blank and fearful expressions on the faces of the people you meet, the dark rings under their eyes and the deep wrinkles suddenly being carved into their temples.
And Remember This Day!
Totally hear you. we have had several developers in the news in the Philly burbs with confessions of judgement on tens of millions and the writing is on the wall even as those developers "vow to fight on" in the local news. I point to all these half-finished or just started mega projects around us and call them the "high water marks" of where we've come from . . . literally After The Flood (of cheap and easy credit).
brings back memories of the "see through buildings" in Houston et al of the 80s
remember this day
Thought For The Day: jim sinclair
Get ready for bailouts of everything everywhere to levels beyond your wildest expectations.
Only gold can insure you against what is coming down as a product of the glib political decision made today to bury the financials in order to placate voters.
To add to the political panic in Washington is the Supreme Court ruling allowing corporations to spend whatever they want on political elections and lobbyists. This may not have percolated into the heads of the sitting administration, but it means that if unemployment is not overcome this will be a one term administration.
You can be sure the amount of money that is going to be legally spent on making sure certain candidates DO NOT WIN in November is going to be titanic in size.
The administration has acted too fast as a result of their loss in Mass. yesterday. They may well kill the golden goose of the equity market wealth factor the sitting administration has worked so hard to build.
The blowback will expose the true revolution which is job oriented and dire.
Hanging the banksters is an inviting solution, but will not stop the voter rebellion now in progress everywhere.
and what will our voter revolution accomplish? we will just get 2006 back...I see no way out, our politicians left and right are corrupt and lack any plan or vision, flipping back to congress we had in early 2000s will do us no good, not that this congress is any better...
and why is it we can get tough on anybody we want like immirgrants, unions, street criminals and it is seen as good hard stances, but getting tough on banks is scapegoating and economic suicide? like not getting tough on banks was so good for us...
one day of movement and half of you are calling the top - incredible.
two days of movement lol
THis was just a warning. If you do not confirm bernie, we will send all your puppies to Oscar Meyer.
My guess is there is thirty percent chance of market still topping out a bit higher, and its late March, April when it really goes down.
I don't know guys... if you are bullish please show that you are making money. If you are bearish please show that you are making money. The market can go up and down, but I'm sure everyone is in it to MAKE MONEY and NOT LOSE MONEY.
If you want to convince people that your strategy is working, please show some numbers.
I can't believe so many people have commented on something Robot Trader posted.
As soon as this pig rallies, he'll be saying to BUY.
RT is about as useless as Jim Cramer.
Love how the regional banks were up yesterday. They are absolutely loaded with junk. I took one of them down for $5m a year ago and replaced it with a hope note that they hold as performing. Short the regionals and payday will surely come. This new big bank proposal is inadvertently going to let them fail. I'm beginning to like Obama. jk
Easy there, PTSD victims. Today was an Agency POMO - $1.5 billion. Stick save today, gap up monday, new test of 1140 by Valentine's. April is when the rats head for the fire escape. Remember October's earnings?
Easy there, PTSD victims. Today was an Agency POMO - $1.5 billion. Stick save today, gap up monday, new test of 1140 by Valentine's. April is when the rats head for the fire escape. Remember October's earnings?