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What To Make Of Today's Market Move
A visual summary of today's action...
And a verbal one, courtesy of Peter Tchir from TF Market Advisors:
If not unprecedented moves we are certainly witnessing a rare day in the markets. The entire energy complex is down 5-10%. Metals and agriculture are down 2-5% except for silver, down a whopping 11%! The Eur has depreciated 2%. So far stocks have been largely immune to the move and credit has completely ignored it.
Clearly a combination of crowded trades, margin increases, and surprisingly dovish comments from Trichet sparked this move. It's clear that the moves down are triggering additional stops and that no one has been willing to step up and play for a big bounce.
Equities have remained fairly calm so far. Certainly a decrease in commodity prices is helpful and would go a long way to ease one of the main concerns expressed by company after company. The move in the dollar is a little more troubling as the weak dollar has clearly been a positive for the economy and profits. But the reality is that the stock market is a little like dear in headlights right now. Investors aren't used to seeing moves of 10% in a commodity as important as oil. I think the initial reaction of doing nothing will give way to selling. Investors taking losses in commodities will take profits in stocks or at least raise some cash to post additional margin on their remaining positions. The economic data has been weak at best and deteriorating, eroding support for stocks. None of the major problems in the world have been solved, they have been merely swept under the carpet or ignored, but are still there. The sovereign debt crisis is not better, if anything it's becoming more clear that default is likely for at least Greece. Japan is still in the early stages of dealing with the consequences of the earthquake, tsunami, and nuclear disaster. MENA remains troublesome. With all the excitement of taking out Osama, no one focused on the fact that the 'No Fly Zone' in Libya has expanded into bombing buildings where Quadaffi is living.
If the selling starts, the reports show that margin debt and net leverage in the stock market are back to extremely high levels. Any selling in stocks could trigger margin calls there too. The housing market remains a mess and fraudclosure hasn't gone away, if anything, it seems a safe bet that DB and MortgageIT are not the only entities in the crosshairs of the government.
Clearly something is going on in the markets that is not natural. Liquidity is at a premium. Stocks have watched it calmly so far, but I expect they will get dragged into this as well and we will see margin liquidations in stocks too. All indications are that people are pretty fully invested. As mentioned earlier this week, stocks had lots of excuses to rally early in the week, but couldn't. The buy the dip mentality is still there, and that could rescue stocks, but since the sell off in other assets does not appear normal, I wouldn't rely on buy the dip to save stocks.
Credit is completely ambivalent right now. That largely makes sense, but we all know that credit is always liquid until it isn't. It may be time to start shorting some LQD and HYG. The carry is low, the markets have been supported by a big influx of cash - HYG has the most shares outstanding ever, and LQD has seen a strong rebound in shares outstanding recently. I don't think there is anything wrong with the fundamentals in credit. Companies have generally cleaned up their balance sheet and earnings are fine, but if investors need to raise some cash this market is as likely to get sold as any, and the speed of the sell off could be surprising. With high yield, only yielding 7.5% I'm assuming many hedge funds have had to use some leverage to get potential returns above 10%. If any move down remains small, they will grow their positions, but at some point, they will have to cut positions to defend their returns. Many are relucantly long at these levels, so their willingness to hold on is lower than usual as they are not in love with the market at these prices.
In summary I would be very careful here. I would be short stocks, light if not short credit, and would be looking for opportunities to go long the energy sector in particular. It will be interesting to see how China reacts overnight and I expect tomorrow's NFP to be a big disappointment - though I'm looking forward to hearing some new creative excuses as to why it was weak.
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HAHA. That picture never gets old.
We may see a surprising UE number tomorrow, no? That might explain some of this....market always prices things in early....and we certainly wouldn't get the word ahead of time (like the big boys).
Fun times
...soooo, when they come out with 9.2% UE then the market can go up and the commodities will stay the same or go up a little....maybe, go up big as then the market would see QE3 as assured....heck, who knows.
Wow....and the 10 year closes at 3.16. Threatened closure of the Fed's fiat money spigot sucked all the air out of the room for the dying dollar crowd.....at least for now. Gross has probably re-entered UST or he is weeping or doesn't believe QE will cease for long. The only commod finishing in the green was wool. This day is a confirmed shakeout, so the future gets much more interesting.
It's all about the Fed. The commods pricing explosion has overpowered the Bernank this time, though he'll never admit his overprint caused it. The Soros SLV sell off was the tell, since he is still considered a top hand on currency movements.
Ans soon we will see a confirmed shakedown
Bought 30 silver eagles this morning from a local dealer.
First time owning physical metal.
Feels good and will eventually buy more.
Hang in there on this roller coaster ride.
Thanks for the intelligent & insightfull comments (that excludes you Texican).
Keep buying.
Anyone know any local dealers in the DC area?
Tyler
you are cool
BUT YOU CAN'T PRINT MONEY
OR STOP PRINTING WHEN YOU WANNA
ALSO YOU CANT DUMP GOLD AND RAISE MARGIN REQUIREMENTS
YOUR STILL COOL THOUGH
I bought my silver for the long haul, but it's still hard to watch. This has been one of the strangest weeks I've seen in a long time.
I try to maintain perspective. It's all about managing expectations, the most difficult part of any parabolic rise. While Silver was rising through the $30's and $40's I was putting aside money to pay the IRS and I felt I had missed an opportunity to add to my stash that I would not see again. Now that I have cash again the opportunity is back.
As I watched the incredible silver juggernaut march steadily upward, I too wondered if I was missing the last great gasp of this bull run. My expectation was tempered by my lack of extra cash due to the seasonal nature of my business. Well my business has picked up and silver has backed off. As I watch things unwind, I'm charting cashflows to put myself in a position to capitalize on another buying opportunity that may consolidate from this pullback. Patience my boy, patience.
DaddyO
The market hates a vacuum. I think most investors wonder what will follow the staged Osama killing. Obviously it was brought to us at this time for a reason. The powers that be are up to something and everyone is waiting for what that is. I think it's obvious that the takedown of commodities is shaking out speculators so that the billionaires can clean up. My advice is to hold your positions and acquire PMs when the prices stabilizes. The Powers in control can shake markets, manipulate news, and roil investors but they can't manufacture PMs. They want yours.
Interesting you should say that, Lindsay Williams a few months ago said there would be a run on PM's to a high price, he said it woulndt go over record prices at first (wrong about that) but then there would be a steep drop and TPTB would be buying it then. They want to collect as much PM for themselves as possible, then we would see the real fireworks after the govts and elite have sopped up all the PM's they can. Looks like we're about there now.
SheepDog, I think the word you are looking for is "fleecing" (first associated with sheep, now a Wall Street strategy).
+ Many rolls of eagles, the fundamentals are not lying.
...and so the stage is set for QE3...no inflation problems folks, just look at the PM's...oh, and by the way, those lousy employment figures, well we have a solution for them...more QE is needed....and the stock market going down and taking all those retirement plans with it....well, just let us get that QE3 going....super size it.
Boys get ready for Dow -2000 or -3000 in one day. Mega liquidations are imminent as Fed Team 6 just blew open the skull of every trader left in the market. Lock n load puts if u still got ammo
Probably right, we'll see some bad days soon they need fear and panic now. No one believes the BS birth cert story or the obviously fake Bin Laden story (except the biggest morons). They need money and they need it now so we'll see in the coming days market chaos and terror attacks, near 100% certain.
Buy in bloody may and go away.
Key word(s) - circuit breaker. Check the limits and processes.
AND I DON'T THINK YOU ARE ON THE SPOOKY DUDES (SOROS) MUST CONTACT LIST
BEFORE I DO ANYTHING
AND THIS MAY BE A GOOD TIME TO BUY SILVER
Tyler,
This is the visual summary of today's action:)
http://www.youtube.com/watch?v=BHu8LAWSKxU
Haa haa !
Oh man, thanks, I needed that laugh.
win
Last week's rally was totally fabricated in the basement of the Marriner Eccles building by traders using Zimbabwe Ben's funny money. This is reality setting in.
I know this is a little OT so please don't junk me, but I have some surplus USD notes (+Gs). Should I sit on them or what?
The way things are going is getting really confusing....
#UCK - THIS IS FUNNY!!!!
DEAR IN THE HEADLIGHTS... and they think creativity is only limited to the artist class.
Lots of I told you so (KD) and Deer in the headlights posts about Silver/Gold/etc. Means that correction is nearing end.
Got to have that debt ceiling taken down, says El Presidente.
Perhaps the last few posts were a bit esoteric.
Sit back, enjoy the beer, and view the plays:
http://www.youtube.com/watch?v=6086Il-YId0&feature=related
This is inflationary, right?
Santa Claus (AKA Sinclair) told us months ago to expect $50-$100 dollar a day swings in Gold soon. Maybe that old guy knows what he is talking about.
$60 dollar swing from the high of $1522.36 to the low @ $1462.08
In my books it means less player left in the field. so any big order buy/sell will cause big swing.
One word: Depression
Silver is old news. William Shatner is my new Golden Goose.
Nothing closed at the day's low.... except Silver...
Silver comes down and the trolls come out to breed...
Hey What-does-it-all-mean, hows that baby making going with Texas Gunslinger?
Investors taking losses in commodities will take profits in stocks or at least raise some cash to post additional margin on their remaining positions.
Nonsense thay got out when Goldman Sachs told them to and when Bernanke sent the signal to them last week.
http://thesheepletimes.com/2011/04/30/bernanke-sends-signal-to-carry-trade-speculators/
But you missed it Tyler because you are not objective all you want to do is promote a one sided arguement. Shame on you.
You are a horses ass. This is the best info site I've run into. What do you want? Should Tyler hold your hand and tell you what to trade on an hour by hour basis? Do your own fucking homework or pay someone to do it for you.
Shame on you.
"promote a one sided arguement" ... I missed it bothsidesnow ... just what one side is Tyler on?
That little deer looks like it is pretty much clueless after being blinded by the light.
Bliiiiiiiiiiiiiiiinded by the light.
wrapped up like a deuce
Another runner in the night.
wrapped up like a douche.
If it howevers above $30 for over the weekend than BTFD, if it breaks lower than $30 than wait for new normal.
Sun is spot on.
This drop in silver and other commodities will shake lose the panicked investor, which is exactly what the big buyers are looking for.
Investor rule #1 - buy when everyone is selling, and sell when everyone is buying.
Buy the dip...
Had them on the ropes last week @49's,
coulda been contenders.....
love the deer pic up top, priceless......
With all the insults flying around, I'm felling little left out. So I have something to say to myself. "Go Fuck yourself FuffyCone!!"
Don't be so hard on yourself.
That's not fair.
Barron's says DON'T BUY THE DIP....... You know what that means.........
You buy it. And you buy it fast. (Although, i can't promise you i'll be behind you.)
http://online.barrons.com/article/SB500014240529702033907045763052139671...
Bernanke raising rates 10% tomorrow.
Looking @ xag daily, and the trade is stalled @ 100day sma. Asia should be interesting. The 31.50 area gets crowded again. Junk That!
You may junk me for this, but...
Metal fatigue, bitchez!
Wanna really get sick to your stomach?
Watch this video of the President's victory lap and the people at Ground Zero today here in Manhattan. I thought we were not releasing photos so we did not "Spike to Football" ?
Meanwhile we have given 19 billion to Pakistan in aid since 9/11...for the country that harbors him
http://www.youtube.com/watch?v=r6vu4Y-67Wk
If Pakistan harbored him, Uncle Sam knew about it.
After all, the CIA and ISI work together (with the help of banker-gangsters like BCCI) to create mujahideen and alCIAdas.
Today was a lesson to be learned on diversification.
High dividend paying Dow stocks were largely unfazed from this carnage.
Glad I didn't "load the boat" with everything I had hoping for a COMEX default.
LOL......
Such sour grapes. Still up 100% in the last 12 months.
As a trader, you could have participated in the run, and sold out as the crash started. Even now, after this "huge" fall, you would be WAY up.
But you didn't.
We left "natural markets" long ago. Where are we going? I haven't a clue but I refuse to play any longer.
Especially since there's never been a 'natural market'. Nor will there be, ever, since it's an illusion to validate the theft of land and labor that gave Capitalism its start.
MOve on...
http://www.youtube.com/watch?v=-5NBja6NLTg
The U.S. fiat Dollar did not become less fiat today, in fact, it became more fiat.
The U.S. went another ~+$5,000,000,000 or so in debt today.
Get physical silver & gold.
Another 5 BILLION IN DEBT
People should be batting an eye.
Contra Costa County in California 2009 reports 8563 active employees.
Total Compensation per FYE 2009 was $1,003,444,152.
http://www.co.contra-costa.ca.us/DocumentView.aspx?DID=2194
$5B is 40,000+ people employed with good wages and good benefits for a year.
Phew! Sold 20% of my AGQ 3 days ago. Bought ZSL two days ago and sold it today.I don't know, this might be a head fake only to give us another good bounce tomorrow. I'm ready to buy more physical gold. This is not over until its over. When it is over we are all going to need evidence of a merciful god. Just biding my time.
Duck and cover, duck and cover, duck and cover, duck and cover, duck and cover, duck and
MOve on...
http://www.youtube.com/watch?v=-5NBja6NLTg
Of course, all the ups and dows are fully based on reality and not a figment of speculation ....
yeah, ... right!
did anyone get a screenshot/copy of TXGS's second comment about the line forming over there
----------------------->
I really wanted to respond to that.
It's days like today that make hedgefunds blow up
I F'N LUV THIS MARKET !!!!
This is fun to watch !!!!
I LUV it!
Everyone is so set for a huge NFP miss tomorrow that the S&P will rip after the actual number comes out. Whether it will last into next week well that's another question.
good point. Gold 36000 for president.
We are definitely close to the bottom in silver, although it appears the cartel is attempting to stuff silver back down below $30. We'll see if they are successful. Physical buying will be monumental below $30.
http://silverdoctors.blogspot.com/2011/05/million-dollar-question-when-w...
I win!!!
But I'd rather you guys give me a gun so I can kill myself.
(I junked myself)
Just an FYI, I knew which cave Bin Laden's dead body was in. Been there since December 2001.
Folks Need some help here - It appears that there is a pattern - GS Connect S&P GSCI Enh Commodity TR ETN- Symbol GSC -
• There have only been 5 days where commodities collapsed significantly more than today; 3 days in 2008 and 2 days in 2009
o 19 March 2008 - Right before Bear Stearns collapsed -->Commodities down 6.68%
o 29 September 2008 – 14 days after the collapse of Lehman Brothers & 19 days after Fannie Mae & Freddie Mac were nationalized - down 9.27%
o 20 November 2008 – down 6.75%
o 7 January 2009 - JP Morgan receives additional Federal assistance to rebalance commodity funds - down 6.99%
o 17 February 2009 - a month before QE1 was enacted – Commodity prices return to 2002 levels – down 6.68%
o 5 May 2011 - down 8.19%
It appears that with each major market event this ETF dumps - is this simply over-leveraged market mechanics OR something structural? - Any assistance would be helpful - thanks in advance
Any ETF's long will be cut short on risk aversion. Primarily a liquidity issue, since ETF rely on liquidity etc. If the next QE is delayed for a a few mths, you should see some major selling in the ETF markets.
It's all China, a net importer of oil, huge inflation issues and a property bubble that would make your eyes bleed. I think the market is flipping out on that, at least hedge funds are starting to sell from an Asian risk aversion. The Shanghai B has been steadily selling - foreign stock holders.
I would be running a China/Asia stock index right next to everything eles on your monitors. Something is up.
The commod market was a classic corner trade, the WTI and Brent collectaion trade was a sell signal, same with gold and silver. With a QE pause, markets will correct in a May maybe to June. China/Asia is in trouble, CDS spreads and a CDS/bond bubble is blowing out + they have a liquidity problem brewing + housing + Japan is a fiscal write off = sell
I agree with the author, short stocks/risk and long energy. Hedge funds will start shorting and picking up energy stocks. Good analysis
QE3 (or it's surrogate) will be promptly announced when IWM takes out 80. That could be tomorrow.
I certainly wouldn't disagree with someone who wanted to hang on to their metals (as I think it will be back at this point sooner rather than later). I just don't think you should buy the dip just yet. It hasn't even bottomed out once yet.
'On another note, I hope that the market's hesitancy to inflate despite the decidedly unstealth Bernanke helicopter will finally force those religious monetarists to abandon their arrogant worship of the M trio. If anyone controls this economy, it is the consumer.
Visual of today, hmmm... This looks about perfect. http://www.youtube.com/watch?v=PSEnwPuawBA
90% drunk rider, on Pigman's http://bible.cc/matthew/8-31.htm repossessed Hawg (AKA The Beast), hits Bambi's mother http://www.youtube.com/watch?v=TNJJvJuTbSk on the Middle Class Highway To Hell.
http://www.youtube.com/watch?v=uebInqG1pJI&feature=related
This Bin Laden euphoria will fade out and we'll be back to reality, $50 silver, $120 oil, etc.
"Buy to the sound of cannons and sell to the sound of trumpets."
Was that Bin Laden Op the trumpets sounding? Also Chairsatan talking about cutting MIC spending.
I am watching copper.
For the first time since following ZH I am glad I am very light on PM, while very heavy farm land, farm equipment, and lead. All paid for free and clear. Nothing in the markets. I admire and respect many of you and have learned more here than in 7 years of higher-ed. Godspeed my friends.
We are turning away "interns" on the farm left and right. The job pays a $700/mo stipend with housing, utilities and some board included. Times is fucking tough and not looking better. I know nothing of market forces and currency manipulation but the one thing I do know is that I am happy I own property that can not be taken from me (at least not while I'm still standing).
Hang in there metalheads and I will continue to learn from your knowledge and balls.
This drinks for you.
I just love CNBS's new headline article tonight: After Cinco de Mayo, Bulls Planning Cinco de ‘Buy’-O?
Now is the BEST time to buy oil, silver and palladium after they have dropped so much. Nothing has changed---MENA is still in flames, unemployment and food stamp are much worse and The Bernank is getting ready to announce a Whopper QE3.
I suspect hedge funds and more pension funds are now following the U of Texas, Mexico, Russia and India and buying gold as a life preserver.
AMERICA!