Volatility

Tyler Durden's picture

Here's What Wall Street Bulls Were Saying In December 2007





The attached Barron’s article appeared in December 2007 as an outlook for the year ahead, and Wall Street strategists were waxing bullish. Notwithstanding the advanced state of disarray in the housing and mortgage markets, soaring global oil prices and a domestic economic expansion cycle that was faltering and getting long in the tooth, Wall Street strategists were still hitting the “buy” key. In fact, the Great Recession had already started but they didn’t have a clue: "Against this troubling backdrop, it’s no wonder investors are worried that the bull market might end in 2008. But Wall Street’s top equity strategists are quick to dismiss such fears."

 

 
Tyler Durden's picture

The Case For A Bull Or Bear Market In Two Charts





Which appears more likely - a straight-line extension of the past two years' rise in stocks, or another "impossible" decline to complete the megaphone pattern?

 
Monetary Metals's picture

Like Dripping Silver Icicles





Notice the “icicles” dripping all over the place? They occur at different times of the day. What are they? Each one is a brief but dramatic price drop.

 
Tyler Durden's picture

"London Fix" Gold Rigging By Bullion Bank Exposed In Class Action Lawsuit: The Complete Charts





While the allegations in the lawsuit are well-known to frequent (and all other) readers of Zero Hedge, we recommend reading the full filing as it explains in clear English just what the fixing process worked. Perhaps what is more interesting are the abnormalities in the price of gold as highlighted by Derksen, which clearly show the critical role the daily fix has in the manipulation of the price of gold, both in a downward and upward (mostly downward) direction: whichever suits the London Fix member banks.

 
Tyler Durden's picture

Initial Jobless Claims Plunge to Jan 2006 Lows, Government Warns Of "Seasonal Volatility"





So much for the idea of 'slack' in the economy, initial jobless claims just plunged 19k week-over-week to 284k (vs 307k expected) - the lowest since Jan 2006 (which was the lowest print since May 2000). This is the biggest beat of expectations in over 2 years. Continuing claims fell modestly. Let's not go popping the champagne corks of full recovery quite yet as non-seaonally-adjusted claims collapsed by their most in 6 months as the government saw fit to warn data-consumers that "claims are often very volatile this time of year," as auto shutdowns can cause claims to fluctuate. In other words, ignore this noise.

 
Tyler Durden's picture

Overnight Manufacturing PMI Euphoria Boosts Futures To Fresh Record Highs





Ever since going public, it appears that Markit's giddyness about life has spilled over into its manufacturing surveys: after a surge in recent Markit mfg exuberance in recent months in the US, it was first China's turn overnight to hit an 18 month high, slamming expectations and fixing the bitter taste in the mouth left by another month of atrocious Japan trade data (where even Goldman has thrown in the towel on Abenomics now) following which the euphoria spilled over to Europe just as the triple-dip recession warnings had started to grow ever louder and most economists have been making a strong case for ECB QE. Instead, German July mfg PMI printed at 52.9, above the 52.0 in June and above the 51.9 expected while the Composite blasted higher to 55.9, from 54.0, and above the 53.8 expected thanks to the strongest Service PMI in 37 months! End result: a blended Eurozone manufacturing PMI rising from 51.8 to 51.9, despite expectations of a modest decline while the Composite rose from 52.8 to 54.0, on expectations of an unchanged print. Curiously the soft survey data took place as Retail Sales declined both in Italy (-0.7%, Exp. +0.2%), and the UK (-0.1%, Exp. 0.3%), which incidentally was blamed on "hot weather." Perhaps Markit, now that it has IPOed successfully, can step off the gas or at least lobby to have surveys become part of GDP.

 
Tyler Durden's picture

Goldman Goes Schizo On Gold: Boosts Price Target To $1200 Even As It Is "Selling It With Conviction"





With less than 6 months to go until the end of the year, with various gold ETFs suddenly seeing the biggest buying in years, and with gold continuing to outperform most asset classes YTD, what is Goldman to do? Why follow the trend of course, and just like David Kostin had no choice but to boost his S&P 500 price target using the idiotic Fed model as a basis, so earlier today Goldman just upgraded its gold price target from $1,066 to $1,200. Probably this means that after accumulating it for the first half of the year, Goldman is finally preparing to sell the precious metal. Not so fast: because while Goldman did just raised its price target, it continues to have a Conviction Sell rating on Gold, which is its second most hated commodity after iron ore. Go figure.

 
Tyler Durden's picture

5 Reasons Why The Market Won't Crash Or Will





One of the biggest mistakes that investors make is falling prey to cognitive biases that obfuscate rising investment risks. Here are 5 counter-points to the main memes in the market currently...

 
Tyler Durden's picture

Want To Outperform The Market, Buy Illiquid Stocks (And Pray)





As part of Bernanke's and now Yellen's experiment in market central-planning, in which newsflow no longer matters to a market that has lost all ability to discount anything except how big a central bank's balance sheet will be and where HFT momentum is far more important than fundamentals, one of the greatest investing perversions to emerge has been our finding from two years ago since confirmed on a monthly basis, that the best performing asset classes happens to also be the most hated one, as the most shorted stocks have outperformed the market better than twofold just since 2012.

 
Tyler Durden's picture

Overnight Futures Levitation Mode Engaged But Subdued





Despite yesterday's lackluster earnings the most recent market levitation on low volume was largely due to what some considered a moderation in geopolitical tensions after Europe once again showed it is completely incapable of stopping Putin from dominating Europe with his energy trump card, and is so conflicted it is even unable to impose sanctions (despite the US prodding first France with BNP and now Germany with the latest DB revelations to get their act together), as well as it being, well, Tuesday, today's moderate run-up in equity futures can likely be best attributed to momentum algos, which are also rushing to recalibrate and follow the overnight surge in the AUDJPY while ignoring any drifting USDJPY signals.

 
Tyler Durden's picture

The Insiders' Case For A Stock Market Mini-Crash





Ssshh... The trade only works if everyone is lulled into staying on the long side until it's too late.

 
EconMatters's picture

Bond Yield Carry Traders Need To Fade Upcoming Econ Events





At some point there is going to be a sea change in bonds.  The question is does the last week in July finally cause the Sea-Change in Bonds? 

 
Tyler Durden's picture

High Yield Bonds Are Flashing Red Again





There is a glaring divergence between the performance of US equities and high-yield credit's spread over investment-grade credit. As BofAML warns, "either HY rallies or stocks soon in a bit of trouble," because the only pillar left to hold up the fragile un-bubble-like stock market - buybacks - will disappear if costs of funding start to surge (there's always a limit to the leverage a credit cycle will bear). The more concerning aspect is that it appears investors are already rushing for the doors... as this week saw the largest HY outflows in over a year.

 
Tyler Durden's picture

Why One Big Bank Is "Worried That The Market Is Stretched And Could Correct Rapidly"





We show that equity markets are stretched (e.g., more than 80% of the S&P rally since last year is due to re-rating), but we also find that the fixed income market has become quite rich (we have been overweight European peripherals for more than a year on valuation grounds, we show that this argument no longer holds), and the same is true of the credit market. Second because capital has been flowing rapidly into risky assets, we document that argument and here too find evidence that the market might be ahead of itself. We read the market reaction last week to the Portuguese news as a sign that the market is indeed too complacent and could correct rapidly.

 
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