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VIX and SPX Are Mirror Images As Dollar Gets Monkeyhammered As Per The Mandate
In today's rehearsal of what efficient markets should look like: the VIX and the SPY will correlate with an R2 of 0.999 while the dollar will get the usual royal beatdown as the Yen-Euro trade goes parabolic. If that doesn't work out, we will try a different script tomorrow.
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Death by a thousand cuts for the dollar.
Monkeyhammered.
Such a perfect metaphor for both the dollar and the guy swinging the hammer.
HY12 is getting squeezed like crazy...been moving $1 higher every day for over a week now...trading almost $94 offered now! IG12 at 2009 tights - hovering at 104/5bps - which has been strong support in the past...we saw LCDX hover and the break, now HY hover and break, IG is doingh the same now - makes me nervous to be too short IG (especially into the roll)...
Always liked that term "Monkeyhammered". And when it pertains to the bloated buck, one shouldn't be surprised. Lets borrow some more money!!!
A simple question: How does shorting the yen for euro crash the dollar? I can see it happening, but I don't understand the impetus for it.
take a look at the weighting scheme for DXY - EUR is much more heavily weighted (57.6%) than JPY (13.6%) so buying EUR and selling JPY will cause a MORE aggressive shift in DXY than simply selling USD against all currencies...next support for DXY at 75.89 (9/22/08 lows), beyond that - look out below...can we really keep ralying even as the dollar drops precipitously? remember that chart ZH showed a week or two back about the upside/downside stress between DXY and SPY - it is taking larger and larger drops in the DXY to 'help' stocks...at some point we reach a limit..(I guess DXY has a floor at 0 right? LOL)
thanks for the clear expl.
Thank you for a great post, from someone that is being slapped silly by that darn Monkey trying to catch the bottom to all this.
Eddy Murphy calls the bottom.
http://www.youtube.com/watch?v=tt87phicwZA&feature=related
the usd is up; gold is up; the dow is up; erections are up; wages are up; the dead are rising; the recession is over; ben b. is our savior, and mattel is making a ben barbie-doll in his honor. everyone back to sleep...
yes...my "hedges" are not working today....
ouch
Why can't the dollar start doing ok for a "while"?
- Fallen around 40% since 2000 v 40% fall in the 1930's.
- Most countries depend on keeping their currency cheap to fund exports to the US.
- US economy is more more attractive than Europe due to its socialism, language barriers, and labor immobility, costs, and rigidity.
- US economy for a while has stregnths over China, e.g., middle class of only 110 million for now.
- Canada, Mexico, Australia, and New zealand face difficulties in a deflationary world of excess capacity.
- Long term currency is correllated with productivity growth and the US has strengths in new tech.
Thats the prechterites view.
A strong Dollar/DXY due to debt being priced in $....
Problem with that view is , if we start getting "debt reconciliation" programmes going forward ?
Only thing i would like to point out with your otherwise correct post is that Canada doesnt face any difficulty in a deflationary world because of the commodity-oriented economy.
Nice call on the reported IYR forced squeeze yesterday morning. Still green shooting, pushing 3% today (DRN +8.65%).
Anyone have the figures for where max pain is this month on the S&P? Are we ever going to have a red day again? Shorting this market is the only move in my opinion, but it's a painful one. These 11month breakout high closes are getting old quick. But it doesn't appear that anyone is selling into these ramps. I will soon be added to the pile of shorts that have had their clock cleaned in the last 6 months unless we pullback from these levels. 1060+ i'm toast.
No... It is no longer possible for SPY to be off more than 35 or 40 cents, and at that for half an hour maybe. When you see that, cover the shorts, go long, and try again higher at EOD if you feel inclined. There is not a thing in the way of S&P 1080-1100 now... I will start looking at puts then.
A million monkeys swinging a million hammers will never create the productivity needed for sustainable growth.
Parody is the greatest form of compliment.
you lost me there
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
trade weighted dollar index still above summer lows despite the carange in dxy.....classic bull divergence....
a mere 4% bull reading on the daily sentiment index ....
turn is nigh my friends!
Dollar is the new carry trade funding currency!
This inverse relationship is what we saw in the last bull market. When will the correlation break? who knows
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
VIX Index daily chart still looking bullish, and looks like it's forming a base.
Weekly chart is currently bearish/neutral.
USD Index monthly signals are still giving bullish warnings.
more:
http://www.zerohedge.com/forum/market-outlook