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V'ohlewmm? Robots Don't Need No Steeenking V'ohlewmm
A SPY block moves market by several points. We exaggerate. (Not really). Volume down, market up, volume up, market down. Rinse, repeat. Computers are happy as pigs in a trough as shorts refuse to even dip a toe in this busted market. China tightening? Greece collapse? Record debt overhang? Pulled IPOs and HY deals? Who cares. The algos are sniffing and providing liquidity.
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3rd verse same as the 1st.....
The computers know to buy the crap out of the market at 9% down on a dip. We are already back in one of those freaky periods like 03-07 where the markets never get to a 10% pullback.
The droids know: pull it back 9%, then ramp it 15-25% from there.
10% ain't allowed.
and, in other news, there's gonna be AAPLsauce flowing in the streets...
http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html?mod=mdc_leader
update: sometime between 3:02 and 4:06 pm today, BAC and GS rocketed to the 3rd and 4th highest in "sold on strength." Up/down ratio on GS was a hilarious 1/100 for the block trades.
One day the dip will no longer rip and everything that those have gotten comfortable with in the past year considering the predictability of the markets just vanish. If you play in the casino long enough you inevitably lose everything.
true!
let's hope the fed will some day be audited .
ill be there shorting it with vengeance
It is amazing. Truly amazing.
It is. Those ten minute volume bars on SPY seem to get smaller and smaller on every up day. And yet...
"Computers are happy as pigs in a trough as shorts refuse to even dip a toe in this busted market"
I'm adding March puts by the bucket load.
Oh come on! Greece is a side show. So what if EU disintegrates, Euro disappears and Europe reverts back to the EFTA? No big deal whatsoever....lasted a long time like that.
China tightening so as to slow a boomer down. That's responsible!
Euro is a side show obscuring China's de-emphasis on US $ reserve holdings. That's the ticket, the longer term worry! If want equity exposure, use non-US, OZ, Canook. Take the currency and better economic profiles. Emphasize materials and metals
And Gold
And it does make sense. Too much high powered reserves in the banking system and some will find their way into equities. Opportunity cost is 1/4% at FED. Gotta juice the P&L's, done via the trading desks.
touch base with me in about a week. im willing to absorb some short term red for a nice bear meal on the other side.
The April's or June's will give you more bang for the buck, IMHO. I rolled my March's into longer dates.
potentially yes. I may dive into some April tomorrow.
All the more reason to suppose that when it goes, it will go big time. HFTs will just walk away from the bid as Joe Saluzzi has been saying for a while now.
DavidC
I'm as bearish as can be, but the Fed is less likely to walk away from the bid.
at least until treasury yields start getting out of hand....
They already walk away from the bid on
serious trouble. Hasn't anyone noticed?
If anything happens, they simply
won't be there.
Well, I am short for the umpteenth time in the past couple of weeks, and this is the first losing trade so I can handle it. Had not thought they would try again, but I guess the urge was too strong. Can't win 'm all.
A bankster controlled market. Because it doesn't make any sense.
....boyz are just playing on the dollar seesaw.
Buffering.......
Wish I had a trough.
Gotta hand it to the wizard. Wizard no stop until sheeple return to Oz. And when they return.......we make sure they never return home again!
This is such a tempting setup to retail investors who missed last March, and are being pitched the bull story.
spx close @ or above 1100?
i actually agree with you.
only interesting if i make it challenging for you.
thats exactly it, everyone hates them - one of the most crowded trades is NOT short euro (taht is a week long phenomena), it is short treasury.
Lets see what happens, we're a bit above my cost, and I sleep well at night in the near-term.
I am currious Oso, I don't know much about treasury bonds but how is everyone short treasuries when the yield is so low? I thought low yields meant demand was high.
It's the curve steepness that is the issue. Few brave souls hold a position on the long bond.
US Treasuries. The most universally despised asset class (it would seem) from a general reading of the articles on this site. Comment for comment they generate more abuse and derision than Greek, Spanish, Portuguese and Irish debt combined. Not to mention all the eastern European, municipal, state and corporate debt dominoes set to fall. When was the last time such a hated asset was guilty of being in a bubble? Answer: never.
I'm sure there are more than a few Japanese who long for the days when they too "hated" their 10YR note for yielding barely 3% let alone the current UST 10YR yield of 3.7%.
Just curious - on the subject of shorting long dated Treasuries, which I have no interest in, isn't part of the cost of holding TBT making the underlying bond interest payments?
How about a nice double top at 1105 and the 200hma, then a nice freefall to 1000?
Step right up and try your luck. Here it is gentlemen, your chance of a lifetime, your dream come true. For only twenty five cents you can buy yourself guaranteed riches beyond your wildest dreams. Honest Ben's the name, stocks and bonds are my game. We have only the highest integrity here in the big casino. Every throw an opportunity, every try a winner.
Winner Winner, Chicken Dinner.
+1 Buzzsaw reminds me of the Andy Griffith episode where Opie Taylor was shooting the rigged cork gun at the county fair! So Sheriff Taylor (The Fed) shows up and they give him a gun that shoots straight....we have a winner!
Operation recapitalize America on the backs of short sellers been ongoing for almost a year now. Reminds me of that scene from "Rounders" when the tourists sit down with pros at the Taj Mahal unknowingly. Same thing expect around the table sits GS,JPM,Merrill, Pershing, Paulson, Soros and everyone else who needs their "assets" to continue upward in order to convince people of a recovery because if they do not and average Joe & Jane give up on 401k contributions the jig is up. If it is not real that fake it.You tell me it is not a monopoly when have all the money in the world to do the the equivalent of defying gravity and logic even though the "recovery" is about 4 months past due.
When this all ends it will end will charges of treason and life sentences. Congress and the Senate will be purged in elections.
+1. For those who live to stand trial.
I believe that there will be blood. The extreme nature of this will elicit extreme emotions.
I am certain that the reason the markets collapsed last year post inauguration was the fear that Pres. Obama would not play ball. Considering everything that had just occurred and his election based upon false promises Wall Street was probably thinking it may be time to fold of the tent and move camp. Once they realized he was easy to manipulate and more of a media creation without any substance there was no concern. 2012 and every election prior to will be different. The entire political structure is about to undergo a radical face lift not seen in our short American History. People still have the right to vote ..for now
Regardless of when this charade ends and end it will. The reprecussions as more jobs are lost and small business begins the collapse will amplify what just occurred. Here is how simply this is to understand and I will use our retail leasing real estate trouble here in Manhattan to best illustrate how vacancies occur and why they are at recent high.
2006 Manhattan: Everything is wonderful in bubble land. Tenants are paying upwards of 3500-3800 for new renovation West Village 500 Sq.Ft 1 Bedrooms. In 2002 these same spaces were leased for 2200. The moment Wall Street collapsed and those fictional "Profits" turned out to be losses the game ends.Flash Forward 2010
2010: Same spaces now lease for 2500-2600
Wall Street workers lose their jobs, staff is cut, attorneys representing these firms lose their jobs, market and advertising dependent on these firms lose their jobs, summer internships go from an average of 15+ short term rentals annually to 1 this past year.
Next we have the trust fund baby crew that would come strolling in from all parts of the globe living off their parents money and speculating by opening up coffee shops, sandwich shops, Nolita boutique "fashion shops" paying $7000.00+ for 300 Sq.Ft of space, restaurants are sprouting like hotcakes as the East Village and Lower East side are transformed with speculation dollars purchase lots or older buildings in the hopes of renovating and hoping on the $3000.00 a month rent gravy train for a new reno in Alphabet City. The fools stepping up leasing commercial space average 5 months in business and typically expend their deposit before leaving in the arrears.
Now all these commercial spaces not existing on a 10 year sweet heart lease or with a tremendous following go under. All their workers vanish. All their accrued credit card debt (Typically north of 100k-200k for renovations and build out) are likely never recouped. Landlords now realize they can barely break even let alone profit without the commercial space kicking in via rent and the property tax payment agreement. So they go under. Food suppliers see a massive contraction in liquor sales and wholesale since they have been living in a bubble so they lay off workers. Cab Drivers have considerably less rides to give so they lose money.
All of the rent control buyouts are finally realized to have lessened to leasing costs in Manhattan.
Fact:
1) When you add 20% inventory from buyouts and neighborhood expansion to East Village, LES, Alphabet City, Hells Kitchen and even Harlem your rents decrease. Supply is unlocked
2) When you build 50 stories upward you unlock supply.
3) When Wall Street has one legged chopped off setting off a chain reaction monopoly money floating around supply drops.
Many tenants pick up and leave in the middle of the night. Some attempt to negotiate incredible deals for themselves using the chaos to their benefit even though they can still afford to pay their previous lease agreement. Why will you pay 3500 when you can threaten to leave a pay 2600? So now even existing tenants who are current become a liability.
Just walking down Bleecker Street Thursday I saw 3 new spaces that recently went out of business. Their is not enough demand to sustain those rent rolls. Any purchaser from the past 8-10 years can potentially end up underwater on a commercial purchase. Simply look at Stuy Town.
As all these small businesses go under they default on their mortgage and more job losses occur and unimaginable pressure befalls pricing. Keep in mind now that for the past year more and more people have been added to unemployment at a huge clip and Just now those extensions on top of extensions are expiring so now consider this..What occurs when all the cash is sucked out of the system? Then you survive on credit. This is why credit lines have been getting cut for 2 years now. They see this coming. So what happens when credit runs out? Well then even more small business which was previously just barely surviving from fair leases cannot sustain their pricing and afford their lease because of deflation so they default. This is an unavoidable chain reaction that is only now beginning to pick up in force.
Now you incorporate the fact that states are bankrupt. I expect the job cuts by bk states to trim the fat to add to the fire as these never before unemployed people are thrown to the wolves. Just look at the recent closing this month of 20 fire departments in NYC.
http://www.nytimes.com/2010/02/02/nyregion/02fdny.html
Just the tip.America was living on a credit card plain and I expect most Americans who feel they received a raw deal have no intention of paying their credit card debts. Who needs a good credit score when everyone else has a horrid credit score. Even the person your leasing from will likely defualt on their credit card and car payments. And that is why moral hazard does not work because eventually what is good for the goose is good for the gander. Who needs a car without a job? Repo it and add it to the inventory..lol
Anyone who attempts to tell you we are in a recovery is living in the past where these events were controllable. Credit is gone and is not returning anytime in the near future. Credit was America's welfare that allowed funding of the supposed dream & luxury lifestyle. Nothing was produced and a few zeros were added to the end of a homes value so banks could indebt the middle class through the ruse of "home appreciation".
We are 1000% in a depression and the fundamentals are NOT ok.
Thank you for the info on NYC as i found it pretty interesting considering the last time i visited was back in 2006 and thus probably saw the polar opposite of what you are describing today.
However, your ending paragraphs bring about a doomsday scenario which, IMO, is not what is going on. Though i agree there is no recovery and a constant bid on the markets doesnt mean jack, i dont subscribe to your school of thought either.
If things really were as bad as you suggest, your gov would be doing a lot more presently than sitting back and merely watching their mechanisms of last year (0%) do their tasks.
Thanks for the history lesson, Dad. You're what Taleb refers to as "noise".
-1000 for lack of creative thinking.
John...well said, well written.
A credit based economy with contracting credit and increasing defaults is a recipe for disaster.
I also think your point about state gov'ts (and municipalities as well I would add) and potential layoffs is spot on. the stimulus money kept most if not all of the teachers, police, administrators, etc employed for the past year. absent massive amounts of additional aid to states and localities from D.C., there will be serious layoffs coming and that will be a battle royale indeed pitting taxpayer vs. public union employee with the state's legislative buffoons and governors caught in the middle with one little problem: they have no cash and no credit left to them.
Your opener was too naive to read the rest.
Obama not play ball? As if.
Who do you think put him in office? Hint: it wasn't just the UAW.
And what happens when there aren't any shorts in the game any more? Do the averages just blast up at 5% a day on no volume?
BTW: I don't think mom and pop will be bamboozled, not after 2001-2 and 2008-9. Fool me once...
Mom and Pop will continue to be bamboozled (just a new set of Mom & Pops). I know family that is happy that they have recovered "most" of their losses but will not cash out !!
Re: "When this all ends it will end will [sic] charges of treason and life sentences."
Sadly, accountability is as unlikely for the financial criminality of the past 3-5 years as it was for other Govt-caused national security scandals: Gulf war "illness" (aka experimentation), Agent Orange, Project SHAD (more experimentation), 1950's nuclear testing exposures.
Maintaining existing power structures (Govt, Wall Street, etc.) is the current national security agenda. If the unwashed masses get restive, we will have a real war to distract them. Anyone else wonder why 'I'm-a-dinner-jacket' feels surrounded by gringo infidels?
Your nuts. There will be no charges of any kind. You're just on the wrong side of the trade. It's not a crisis for them, just you.
No volume, OpEx week and DXY.
exactly.
agreed.
it'll be interesting to see action for wed...gap up to vaporize any remaining puts??? and then sink it to blow calls?
1105 is tough resistance, 1110 should be a wall.
Volume is friggin PATHETIC -- everyone here at the CME/CBOT is wonder -- WTF is going on????
Here's what's going on. The mark who makes the game work has left the building and you guys are just now starting to figure it out.
gotcha
This is what some...ahem..journalist @ Bloomberg stated as the reason for today's rally...
http://www.bloomberg.com/apps/news?pid=20601101&sid=a0tslYXmCeCw
Do they even fact check their shit before they print it? Or is the editor on vacation?
This is akin to the reporting right before the Bearstearn's boo boo where news media just regurgitated whatever BearStearn's management were saying, not bothering to check if it made sense or not.
A Greek official said it ! It must be true! PRINT IT!!
I believe this report from the government may have had something to do with it...
http://www.theonion.com/content/news/labor_dept_available_labor_rate
Rahmp it up - free cash for everybody! Where's Robo? The wildebeests are out of control again - we need pics of chicks and animals!
mellmeister
after a day like this, ya need the money girls:
http://www.youtube.com/siswimsuit#p/c/8395C4E27B95B6DC
market just like the 30yr auction... who are those buyers..
The great Monolith has raised the market once again. How do you short a market that is fully protected by software that is designed to withstand nuclear attacks? You can't. But wait, how could this be ? They go against " the Great Charts"
I dunno, maybe I am reading too much gloom and doom. At heart I do believe we are all screwed, but Jesus look at the stock market for the past 12 months. Whole Foods up big AH tonight... WHOLE F***ING FOODS!! If ever there was a belweather for yuppified conspicuous consumption, they are it. Everyone's out of work but earnings keep beating and the stock market keeps rising...
At what point to the "bear market rally" folks capitulate? Dow 12K? 15K? 20K? I am waiting for the weight of all this debt to crash down but am beginning to think it will never happen. The problems seem to have magically disappeared. Most of the govt data points to expansion and recovery. What the hell is going on? Are we screwed, or did we just drive over a big-ass speed bump on the way to perpetual prosperity?
Could be another short squeeze on WFMI -- a few quarters back, they beat by a penny and I rode a short squeeze to a 13% gain in 3 hours.
No dividends, rich p/e... probably going to go right back into the 20's in short term. Check out the 6 month chart.
Today was Euro up, dollar down, US Stock market up, carry trade on, very low volume day. Not healthy to chase on days like this.
What's up with BAC, why the hell did it go up 5% today? Should I start a short position on it?
That must have been a response to Barclay's massive beat early this a.m. Nine point four billion pound profit!!! (Surprise, surprise: most of their gains came from proprietary trading...) The stock was up eight percent at one time before I couldn't take any more and stopped watching.
i find JPM rising throughout the day after an international office is bombed most remarkable.
doesn't everyone buy stock in a company that is universally hated and has a bomb go off in front of their office? I mean, that's even better than an earnings beat, right?
I paid off my BAC credit card.
Volume, whatever. A bid is a bid.
You definitely don't get paid in "volume". You get paid in the difference between the buying and selling price.
That said, all we've done over the past week is a 50% retracement of the initial move down. That's quite "normal" from a chartist perspective. Could we still go to new highs? Yes, of course, but so far, the market action isn't indicative of a strong move up, as we saw following other significant lows during the rally from the March 2009 low.
Low volume + rising price = wrong price.
right now we have one of the best bullish constellations possible in astrology for markets - especially the US market as Venus Jupiter are in a trigon with Venus Jupiter of the US chart. Actually as Jupiter was the first to enter this position around 5th markets have gone up. The Sun will join this position in 6 days. Hence second half of the week may be a little setback but the rally is poised to go on to 1120 SPX and COMP will even make a new high. That's the way major tops are made anyway. I am bearish as well but right now even carry a little long position. Early March we should have the top of this leg up and SPX should not make new highs but the VIX will likely retest the lows still.
I definitely want some of what you're smoking.
Thanks Major Tom
For those of you who think tht the Euro is off the hook and all the shorts can quietly unwind: a giant surprise is in store for you!
Traders are rolling Euros into Yen right now.
Short the USD/JPY pair. Short the EUR/JPY and the EUR/USD pairs here, too. Short the EUR/USD at 1.3790 and don't look back.
See y'all in a month or so for my scorecard.
How much decay would a long EUO have over a month?
Just trade the 4X. No need for Iron Condors and all that crazy computative stuff. Trade on intuition and charting skills.
All options are manipulated somehow.
ready for homerun? history repeats itself...another stock rally till september-november?!?
It's that time of the month again, perhaps Tyler needs to follow up on post "On Incident Patterns Of Fed MBS Purchases And OpEx Expirations". The well is running dry fast with only one last hurrah to go next month.
Come on guys. This is the normal options expiration week schenanigans. They sold us a bunch of PUTS on the SPX/SPY and now its time to burn em so they can expire worthless. We'll close above 1100 and below 1110 on Friday. Guaranteed.
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