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Selling The QEternity News

Tyler Durden's picture




 

After the kneejerk stop-run reaction to the FOMC's announcement of QEternity - that juiced stocks to the year's highs, there has been no follow-through at all among the cyclical or recovery-sensitive sectors. In fact, all the sectors that ran on QE3 hopes have retraced dramatically. With today's further slump in Energy and Materials (as earnings begin to cast doubt on the hope-rally), they are now down over 5% from the post-QE peak.

 

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Wed, 10/10/2012 - 10:29 | 2874692 vinayjha
vinayjha's picture

Wait till election is over. and stock will be down 20%  http://www.freefdawatchlist.com/2012/10/stocks-for-oct-10th-adtn-cmi-cat...

Wed, 10/10/2012 - 10:37 | 2874723 3rdgrader
3rdgrader's picture

The U.S. marines are the modern version of the Redcoats. How do you like the Bankers Gas Tax? Just keep voting for them.

Wed, 10/10/2012 - 11:11 | 2874861 Thomas
Thomas's picture

I was wondering if QEternity would eliminate the most important market driver--expectation.

Wed, 10/10/2012 - 10:29 | 2874693 GetZeeGold
GetZeeGold's picture

 

 

When infinity comes to an end.

 

Wed, 10/10/2012 - 10:36 | 2874720 insanelysane
insanelysane's picture

Reality: Infinity = Infinity

Hope: Infinity = Infinity + 1

Wed, 10/10/2012 - 10:32 | 2874705 HelluvaEngineer
HelluvaEngineer's picture

No worries.   Everyone knows we will move sideways until Obama is reelected, and then something new and amazing will happen.  How could everyone be wrong?

Wed, 10/10/2012 - 10:50 | 2874758 LMAOLORI
LMAOLORI's picture

 

 

There is another possibility

A Romney Presidency Could End the Fed’s Easy Money

http://www.investingdaily.com/15752/a-romney-presidency-could-end-the-feds-easy-money

Wed, 10/10/2012 - 10:35 | 2874715 slaughterer
slaughterer's picture

What the charts shows is the re-allocation from technology to financials over the last 5-7 sessions.  

Wed, 10/10/2012 - 10:35 | 2874716 machineh
machineh's picture

When a government program doesn't work, it obviously is 'underfunded.' /sarc

Wed, 10/10/2012 - 11:49 | 2874836 HD
HD's picture

It's true.  My rabid animal petting zoo totally failed. I had balloons, cotton candy and free stitches for the kids - still a no go for some reason.

If I only had more money I could have made it work.

Wed, 10/10/2012 - 10:39 | 2874721 Hmm...
Hmm...'s picture

The big question for me is this:

What will happen to Precious Metals when the rest of the asset classes take a nosedive?

 

I have two competing theories, and I can see each of them occurring

1) Gold is sold off to raise money for margin calls, so you see a major selloff in Gold just as you saw in the 2007 time period.

2) Gold is hoarded as people run to Safety.

To answer my question, one really must understand what investors think of the Treasury Market.  Will it be a safe haven (as it has been each time we've had major sell offs)... or will investors shy away from it.

Impossible to know since so much Treasury Purchases are Fed-based. 

Can't read distorted markets.  Sucks.

 

edit/addition: I own lots of gold.  only stock I own is CEF (in my IRA).

Wed, 10/10/2012 - 10:51 | 2874762 Winston Churchill
Winston Churchill's picture

Looking back in financial ,and family history,a 50/50 allocation to cash (multiple currency's) and

PM's seems about right.PM's might take a hit short term,but the cash is for the short term.

There will be some amazing bargains to be had.10 cents on ? sort of bargains.

Timing will be everything as always.

All depends whether we go straight to hyperinflation or visit a deflationary collapse followed

by hyperinflation.50/50 cash and PM's.I think its the only way to go myself.

All outside the system of course..

Wed, 10/10/2012 - 10:56 | 2874773 Dr. Engali
Dr. Engali's picture

That's a tough call on gold ...my first instinct is that gold will sell hard as it is used to cover margin calls. However as I have been thinking about it the gold market knows Ben is going to print like there is no tomorrow so gold might not follow the 07 pattern and might actually rally. Treasuries might be what is used to answer margin calls. what ever happens if gold does sell off it will be a great opportunity to buy more..I remain liquid for that chance.

Wed, 10/10/2012 - 10:59 | 2874788 kralizec
kralizec's picture

So the gold market didn't know up until now that Helicopter Ben was printing like mad?  Or is it they just didn't react properly to it?

I tend to think your first instict is correct, at least that is what I am planning on, I'd like to buy more physical on the dip.

Wed, 10/10/2012 - 11:25 | 2874923 Dr. Engali
Dr. Engali's picture

No I am saying that the flight to safety this time around may be gold instead of treasuries.

Wed, 10/10/2012 - 10:38 | 2874725 unrulian
unrulian's picture

BNN in Canada just referenced Zerohedge as a source for the 4.5 Trillion IMF / Bank story...The Host said don't put it in a banner or anything but it was a ZH reference none the less.

Wed, 10/10/2012 - 10:38 | 2874727 LongSoupLine
LongSoupLine's picture

It's all going to WTI...bitchez.

 

Fuck you Bernanke!

Wed, 10/10/2012 - 10:46 | 2874747 malikai
malikai's picture

WTI is just going back to it's equilibrium relative to the rest of the market.

http://blog.quantsig.net/2012/10/10/wti-6/

Wed, 10/10/2012 - 10:39 | 2874731 slaughterer
slaughterer's picture

Unfortunately, gold is  a large position in some hedge funds leveraged net long.  Thus your theory #1 seems most probable.  

Wed, 10/10/2012 - 10:44 | 2874744 Dr. Engali
Dr. Engali's picture

Correction...GLD is a large position in many hedge funds. Very few hold any actual gold.

Wed, 10/10/2012 - 10:46 | 2874745 GetZeeGold
GetZeeGold's picture

 

 

Heh heh......suckers.

 

Wed, 10/10/2012 - 10:52 | 2874763 Long-John-Silver
Long-John-Silver's picture

An ounce of Gold in the hand is worth 100 ounces in GLD (if your lucky).

Wed, 10/10/2012 - 10:46 | 2874749 slaughterer
slaughterer's picture

Thanks, Dr.  You are correct.  

**

The guy who thinks the market goes sideways til election: your conclusion will be, stay out of options market.  

Wed, 10/10/2012 - 10:47 | 2874751 LongSoupLine
LongSoupLine's picture

Very few hold any actual gold.

 

Spot on...including GLD in its self. (to affirm your unspoken point)

Wed, 10/10/2012 - 10:50 | 2874759 Long-John-Silver
Long-John-Silver's picture

Buy all the physical Silver you can lay your hands on while it's below $34. That window is closing rapidly.

Wed, 10/10/2012 - 10:52 | 2874764 Quinvarius
Quinvarius's picture

Cherry picking sectors will not stop thr currency crisis. There were some downticks and even down days in weimar too.

Wed, 10/10/2012 - 10:59 | 2874794 nick howdy
nick howdy's picture

When prudence, saving, staying out of debt are the the things that destroy a system and lavishness, spending, being indebted are the things that make a system live, then that system is immoral and deserves to die.

Wed, 10/10/2012 - 11:31 | 2874950 evolutionx
evolutionx's picture

Email from Siegel:

 

Message from David Siegel.

 

http://www.webcompact.net/index.php/news/49125-email-david-siegel

Wed, 10/10/2012 - 12:00 | 2875060 P.T.Bull
P.T.Bull's picture

My own informal observation has been that the gold etf gld tends to drop when the stock market drops. Presumably people selling to pay margin calls or something I have no idea about.

If romney has the fed raise interest rates, I expect gold to drop as raising interest rates would lower inflation expectations.

Also, I have seen in the past the market drops around presidential election time.

I am currently out of gold and holding the regretabble fiat dollar. Looking to get back into gold when market drops. Maybe I will make money, maybe lose opportunity if gold rises while I don't have any.

Wed, 10/10/2012 - 12:04 | 2875090 DUNTHAT
DUNTHAT's picture

 

Looks like a pullback for Gold ...

https://docs.google.com/open?id=0B16Nxp5pgJBzaEdUVzRUZHlvT28

Wed, 10/10/2012 - 15:20 | 2875834 Grand Supercycle
Grand Supercycle's picture

Wile E. Coyote overdue equity sell off gains momentum.

http://www.zerohedge.com/news/2012-12-24/market-analysis

http://trader618.com

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