Weekly Chartology

Nothing can curb the endless bullishness and enthusiasm of Joseph Cohen's successor, not even a 1000 point drop in the Dow in 5 minutes, and the realization that markets are nothing than the backdoor opium smoke-filled gambling den of a few mutually front-running algorithms. In the latest Weekly Kickstart, Goldman's David Kostin, tries to fill the Goldman trading axes, and begins with the following: "Fundamentals ignored as US equities gripped by contagion fears; we see 1250 by year-end." Of course, those who have done the opposite of what Kostin has preached (i.e., Goldman Sachs itself) are the only ones outperforming the market: "Our recommended sector weightings have generated -12 bp of alpha YTD. Our overweight recommendations (Energy, Materials, Info Tech) have generated -32 bp of alpha while our underweight positions (Health Care, Consumer Staples, Utilities, Telecom) have generated +20 bp of alpha." We will soon refresh the Goldman "CONviction Buy List" YTD P&L. That one should be fun. In the meantime, enjoy some pretty charts from 200 West.

Fundamentals ignored as US equities gripped by contagion fears; we see 1250 by year-end, Goldman Sachs

Comments

[LeBalance]

Suggestions TD: insert a >more< between "nothing" and "than" in the first sentence.

And also swap out the "the" after that "than" for an "a".

and yes ****if**** you were to play the game it would be counter to Goldy's advice.

[Onehunglow]

Let me be the first to say it David Kostin is a douche bag.

"Fundamentals ignored as US equities gripped by contagion fears; we see 1250 by year-end."

This guy needs a good kick to the nuts.

True fundamentals have been completely ignored during this bear market run up. Do you think these guys really believe the bullshit they spew.

[AN0NYM0US]

apologies for the CNBS clip but it is a classic

Jim Rickards, of Omnis, and George Dowd, of Newedge school Becky Quack and Dopey Joe Kernan on currency, gold and silver

[gimli]

Here's a German view on the state of Middle Earth titled:

The Mother of All Bubbles -- from the staff of Der Spiegel

http://www.spiegel.de/international/europe/0,1518,692666,00.html

[gimli]

By the way, I think I can whoop that Finance Minister --  Wolfgang Schäuble

[gimli]

Deutsche Orc

http://www.spiegel.de/fotostrecke/fotostrecke-54465-4.html

[JW n FL]

by gimli
on Sat, 05/08/2010 - 07:53
#337825

Here's a German view on the state of Middle Earth titled:

The Mother of All Bubbles -- from the staff of Der Spiegel

http://www.spiegel.de/international/europe/0,1518,692666,00.html

gimli,

        Thank You! for the read... Fan-Fucking-Tastic!

Sincerely, JW

[assumptionblindness]

Those who practice an old paradigm will defend it most fiercely as a new paradigm emerges.  The "best and brightest" paradigm is history.

[sweet ebony diamond]

I wonder if he is a borg.

[ZackAttack]

I wonder if Trichet realizes that he's sitting on a nodal point in history this weekend?

He holds the fate of fiat in his hands. If he's going to go Keynesian, he'd better go big. Trillion in QE, trillion in liquidity, coordinate with the US Fed to open up the swap lines for another half $t at least.

If the market laughs at him on Monday, they are well and truly fuckered.

[drwells]

No more than, say, Nicholas II or any of the other poor slobs who were handed these historic turning points and proceeded to bugger them beyond recognition, I expect.

[RobotTrader]

Showdown at "QuantSleaze Corral"
Rasputin
- Sat, May 8, 2010 - 07:20 AM

For months now, I have quietly (and not so quietly) stated that the Fed
will have to implement "QuantSleaze 2.0" sooner or later.

Well, it appears it will be sooner.

Because, as demonstrated this last week, the world has plummeted
back into "Great Disintegration Mode" with literally every single equity
index getting pounded, CDS spreads blowing out, inter-bank lending
frozen, currencies gyrating and other destruction and mayhem being
visited on the Ponzi Pyramid monetary system.

So, this weekend really is "It". The great showdown between the
debt/derivatives destruction and the central banks and governments who
have vowed to fight to the death against the liquidation that is again
underway.

Last night, the EU fired their first "bazooka round" by stating
they will defend the sclero at all costs, take on the "Evil Speculators"
(translation: Bond Vigilantes who are finally calling the bluffs of
bankrupt sovereigns), and perhaps even spin up their own captive
"ratings" agencies to slap AAA approvals on any toxic trash that strikes
their fancy.

Furthermore, the Chocolate-Makers are also discussing creating
their own "EMF" (European Monetary Fund) so that these bankrupt EU
countries can bail themselves out...by borrowing more from one another!

However, these moves--even if all somehow miracously implemented
before Sunday night's Asian stock market open--will not be sufficient
to overcome the resurgent re-collapse of the financial system.

Which leads us to what WILL stem the implosion, and will absolutely
be implemented:



1. The ECB will finally throw in the towel and agree to monetize
trash, flinging fresh scleros in exchange for deadbeat sovereign
debt/bad bank "assets"


...and:



2. The Fed will--at a minimum--re-open the swap lines they used in
2008, only this time probably to the tune of a TRILLION fiatscos


(Ras Conclusion): Anything LESS than these two drastic measures of
turning the spigot on the "Fiatsco Flame Thrower" to "Full Blast" and
the economic chaos that picked up speed last week engulfs the entire
planet.

And these goons know it.

So, the "Showdown at QuantSleaze Corral" is on.

And my prediction is TPTB come out with all guns blazing.

[Hulk]

Ras is spot on. Got gold???

[Pure Evil]

Maybe this is what Sarkozy was hinting at in his latest rant this weekend, a la the post by Bruce Kasting.

Sometimes I wonder who some of these guys are working for, either this Ras fellow is some prophetic genuis, or he's disseminating the information ahead of time to plant the seed in people's brains.

And, I can't help but wonder if this doesn't all tie into President GW Bush's Atlantic Alliance policy initiative.

Either way, all this indicates is that we are well on our way to global government and a common global currency.

One step at a time, one step at a time.

[anony]

Shouldn't that be every LONG index got pounded.

The short indexes have done quite nicely.

[drwells]

Dear TPTB,

Please administer one last 200-point bitchslap to gold so that I can liquidate my IRAs, load up, and make back the 38% tax/penalty hit within three days.

Thanks!

[Cursive]

Here's my tip for David Kostin (or really my tip to potential GS clients or followers of GS research):

Close all long positions on the next bounce.  If you've got the savings, go to your bank and withdraw enough cash to cover 3 months of living expenses.  If you fell compelled to trade this casino, get long volatility.

[JW n FL]

What are you hedging with long Volatility?

[RobotTrader]

Amazing how fast the market became oversold....

In one fell swoop.....

Two -1500 tick readings in a row is unprecedented.  Last time it happened was in 1997 (LTCM meltdown).

Note the McClellan slammed back to the lows, positive divergence with the Summation Index:

[dcb]

if you are goldman prop desk and shorting like I have been doing the goal is to keep the reatil investor in as long as can. funny even while goldman was betting on the huge market collapse I don't recall there analysts saying it was going to happen. I don't recall any major investment bank saying it would happen.

[Missing_Link]

Yes.  Funny how they claim the market is at a bottom, even though it's heading straight down according to their chart.

[BlackBeard]

Popular satellite radio/youtube news show naming names of corporatist senators.  Good to see other media outlets (albeit small) get the word out:

http://www.youtube.com/watch?v=d8-JXhzXdSU&playnext_from=TL&videos=6QrAduSFPRk&feature=sub

[JW n FL]

http://www.opensecrets.org/industries/mems.php

Follow the link.. look at the dollars and who is buying who...

And Thank You! for the Link... BlackBeard

Be well, JW

[BlackBeard]

Great link yourself.  Thank you back.

[RockyRacoon]

A small part of today's comment from Ed Steer:

The open interest numbers for Thursday's trading were rather amazing.  Volume in gold was an absolutely gargantuan 298,487 contracts... less about 27,000 roll-overs.  Open interest rose a fairly steep 9,546 contracts... but Ted Butler said that he was surprised that this number was as low as it was, considering gold's big price move and the volumes involved.  Gold's total open interest is now a whopping 562,229 contracts... not a new high yet, but getting there.  Silver's volume on Thursday was a very chunky 55,529 contracts as well... of which around 3,000 contracts were roll-overs into future months.  There are now 657 silver contracts still open for May.... up 151 contracts from Wednesday.  Open interest was up only 736 contracts on silver's smallish price gain.  I wouldn't read much into these open interest numbers until next Friday's Commitment of Traders report.  It would be lovely if the COMEX had to update their open interest changes every day... just like they do on the TOCOM.  But that would make things more transparent... and that's not a good idea when you're running a criminal enterprise on this scale.

And, comes this:http://market-ticker.org/archives/2286-CFTC-Warns,-GOLDSILVER-Spikes.htm... (nice charts)

CFTC Warns, GOLD/SILVER Spikes?

Hmmmm....

WASHINGTON (Dow Jones)--The U.S. Commodity Futures Trading Commission issued a warning to the market on Friday to remind participants that speculative trading limits apply throughout the trading day as well as at the end of trading.

Timestamp, 11:15 Central time

Now let's look at two charts.

You don't think that GOLD was being speculatively shorted beyond intraday position limits, do you?  That oval, by the way, is right when the announcement was made.

Or shall we look at SILVER?

Naw, there's no evidence that "someone" (or a few someones) were breaking the law here, is there?

Nobody would ever close out unlawfully-held shorts after being warned by the CFTC, would they?

This from the CFTC website:

http://www.cftc.gov/PressRoom/PressReleases/pr5819-10.html

CFTC’s Division of Market Oversight Issues Advisory Regarding Intraday Speculative Position Limits

Washington, DC – The U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight (“DMO”) today issued an Advisory to alert market participants with respect to their ongoing legal obligations to comply with speculative position limits. Speculative position limits apply to positions held on designated contract markets (“DCMs”) and on exempt commercial markets (“ECMs”) with significant price discovery contracts (“SPDCs”) (collectively, “exchanges”).

Speculative position limits provide for the maximum size of the net long or short position that any one person may hold or control in futures at any point in time. In enforcing speculative position limits, the Commission and exchanges rely on information generated by the Commission’s Large Trader Reporting System (“LTRS”) or on equivalent large trader reporting systems maintained by individual exchanges. Under the LTRS, daily reports are filed at the end of the trading day (“as of the close of the market”).

In this Advisory, DMO reaffirms that, irrespective of the end-of-day applicability of the LTRS, speculative position limits apply on an intraday basis as well as an end-of-day basis. This applies to both Federal limits for certain agricultural commodities, set out in Commission regulation 150.2, and any exchange limits imposed in accordance with the core principles for DCMs or ECMs with SPDCs. A trader whose position exceeds the applicable speculative position limit at any time during the day is in violation of the Commodity Exchange Act and CFTC regulations, even if the position is subsequently reduced to a level within the applicable limit by the close of the market for that day. Accordingly, intraday speculative position limit violations have been and continue to be subject to Commission enforcement action as violations of the Act.

Last Updated: May 7, 2010

Media Contacts
Scott Schneider
202-418-5174

R. David Gary
202-418-5085

Office of Public Affairs

[Gold...Bitches]

Get ready for silver...

Feds Probe JP Morgan’s Silver Trades

By MICHAEL GRAY

Federal regulators have launched both a criminal and civil investigation against JPMorgan Chase for its trading activity in precious metals market.
The Commodities Futures Trade Commission is looking into civil charges and the Department of Justice’s Antitrust Division are handling the criminal probe, according to sources who did not wish to be identified due to the sensitive nature of the information.

[Hulk]

And here will be the announcement GB, at the conclusion of the investigation: "After 8 months of investigations into JPM's alleged PM manipulations, no evidence can be found of JPM manipulating the PM market

Sorry Gold...Bitches, but thats how our corrupted system works now...

[anony]

I am 'looking into' a condo on St. Bart's that has a view of the nude beach.

But I don't think I can do much about buying it.

[Missing_Link]

I don't get Goldman's chart on page 3.

They show a bunch of local tops and bottoms in the S&P, and while they show the late-April top, they show it currently at a bottom.

Call me crazy, but in order to be sure the market has bottomed, don't you need a solid rebound, or at the very least, a period of consolidation?  A day of -1.25% returns doesn't count as "consolidation."

We're still free-falling until the market proves otherwise.

[Astute Investor]

"Fundamentals ignored as US equities gripped by contagion fears".

Seems to me that the sovereign debt crisis / contagion is quite real and certainly a key component of the FUNDAMENTALS surrounding the outlook for U.S. Equities.

It just confirms that fundamentals don't matter to GS no more than deficits don't matter to Dick Cheney....

[JW n FL]

Flight to quality...

Green Shoots Bitches!!!!

Treasury needed buyers... well guess what, this week they will have buyers lined up around the block! its not hard too see the light.

and... Chenney was a Conservative doing God's work... how dare you. Pro-Life Bitches!!!!

[Grand Supercycle]

I've uploaded a new DOW chart.

http://www.zerohedge.com/forum/latest-market-outlook-0

http://stockmarket618.wordpress.com