OpEx

Investors Lose Faith - Slumping Stocks Give Up All Yellen Gains

It appears the "what the market missed" that we detailed earlier - This sets the Fed on a collision course with the market because "with the market pricing fewer hikes than the Fed suggests, someone is going to end up being wrong," - is starting to filter out to the mainstream. Despite exuberant buying in FANGs, the broad market indices have retraced the post-Yellen exuberance as bond yields fade, hinting at the market's growing realization that this could be a policy error.

Don't Believe The Hope

If there is one chart that tells the 'truth' about the US equity 'market' it is this. Not only has breadth collapsed back to Black Monday lows (despite elevated index prices) but yesterday's exuberant rip higher diverged dramatically from a very significant drop (3 decliners for every advancer) in overall market breadth. Yes, it's Fed week, and OPEX, but the underlying support for the ponzi is waning rapidly.

What The Charts Say: "Things Are Far From Well"

One can choose to ignore all these charts. However, many of them suggest eery similarity to 2007/2008 in structure. And if this structure plays out the so called "Santa" rally may not be all that it's cracked up to be. The cumulative message of all these charts: Things are far from well.

The Most Important Earnings Report You Should Know About

"As we progressed through the quarter, conditions softened. And September was especially weak, particularly in the U.S. product businesses....September typically is the strongest month of the year... There appears to be a general slowdown in U.S. industrial customer spending, both capital and operating spending.... we're not expecting to see sequential growth until the second half of the year (2016)"

- Keith Norbusch, ROK CEO

Goldman Downgrades Valeant On "Lack Of Confidence" After Charlie Munger Slams Company

A bigger problem for Valeant, however, emerged today when none other than Warren Buffett's right hand man Charlie Munger in an interview with Bloomberg "tore anew into the besieged drug company, calling its practice of acquiring rights to treatments and boosting prices legal but “deeply immoral” and “similar to the worst abuses in for-profit education.”  And to prove just how much clout Munger does indeed have, moments ago the most important Wall Street bank, Goldman Sachs, downgraded Valeant to Neutral from Buy, cutting its share price target from $180 to $122.

"No Brainer" AAPL Investors Anxious Amid iPhone Momentum Concerns, JPM Expects "Cautious" Guidance

Yesterday's tumble on the read-through from component-maker Dialog Semi added to fears, noted by Berenberg Bank the previous week, that iPhone sales momentum was not as rosy as Tim Cook told Jim Cramer after all, is not seeing many BTFDers this morning. As we previously noted, the China channel checks painted an ugly picture, and now JPMorgan (while maintaining their 'overweight' rating on AAPL) is warning that it expects "cautious guidance" amid a weakening global macro picture.

Options Market "Crash" Indicator Hits Peak Panic, Surpasses Record Highs

Since we first exposed (and explained) the Black-sh Swan-link nature of the options market's Skew Index, the mainstream media has lept to various conclusions (from ignore it, like everything else, to 'wow'). However, what is crucial to comprehend is that the soaring Skew is occurring at the same time as a collapsing VIX. However, what we have seen over the last two days is somewhat unprecedented - VIX has continued to collapse into option expiration (and we know the pattern that occurs after opex) as SKEW has soared to new all-time record highs.

Buying Panic Fizzles As Option Expiration Looms

In the absence of any key economic developments in the Asian trading session, Asian stocks traded mostly under the influence of the late, pre-opex US ramp momentum courtesy of another day of ugly economic data in the US (bad econ news is good news for liquidity addicts), closing solidly in the green across the board, led by China (+1.6%) and Japan (+1.1%) thanks in no small part to the latest tumble in the Yen carry trade, which mirrored a bout of USD overnight weakness. And since a major part of the risk on move yesterday was due to Ewald Nowotny's comments welcoming more QE, news from Eurostat that Eurozone CPI in September dropped -0.1% confirming Europe's deflation continues, should only be greeted with even more buying as it suggests further easing by the ECB is inevitable.