Where Do Stocks 'Belong'?

Tyler Durden's picture

Twice this year we have seen the US equity market become enamored of its own hope-holding, momentum-trapping, liquidity-driven, success while the bond markets (Treasury and High Yield) have remained a little less sanguine. This lack of exuberance among all but the equity players perhaps better reflects the sad reality of fundamentals (as we noted here) or perhaps this time it is different. To wit, the following two charts as a gentle reminder that gravity still exists and where the short-term floors might be...


S&P 500 vs Treasuries...


S&P 500 vs High Yield Credit...


Charts: Bloomberg

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Kaiser Sousa's picture

on the ass of seniors instead of Depends????

LiesAreTheOnlyTruth's picture

Down the tubes?  As George Castanza would say, "It's ALL PIPES!"

nofluer's picture

Where do stocks belong?

P/E Bitchez!!!

Calidreaming's picture

Stocks belong at dow 7k ish right now .  I thought thats where they were after waking up from a four year sleep.  Then I looked- wow  thank you Plunge protection team - you guys are swell!

Conman's picture

Too bad you used deerinheadlights.jpg yesterday. Why the reversion to reality all of a sudden. We need a QeRooomer to put us back in a unicorn infested stupor.

John McCloy's picture

Wait..so Ben cannot have low rates and everyone in bonds AND stocks?


Dr. Richard Head's picture

It's transitory, temporary, provisionary, changeable, momentary, passing, and can be fixed in 15 minutes.

gmrpeabody's picture

Just wait till the fourth quarter..., earnings will be great..., you'll see...

It's like Charlie Brown's Great Pumpkin!

LongSoupLine's picture

SPY a reasonable buy at 0.01

fuu's picture

There is some serious support around $0.

Zero Govt's picture

not sure about that... the long term trendline support for 2017 is -$47 Trillion

..it's amazin what parasites can suck out of a nation before their game is up and it collapses

XtraBullish's picture

Ka-ching ! The $VIX is now finally gapping higher and about to go right back to 50 where it belongs...

Long from under 14.00 and looking to shove it up Jamie Dimon's ring.

helping_friendly_book's picture

I haven't looked at the VIX for a month. Thx for reminding me. What a nice suprise. I used to check the vix and dow transports daily when it mattered. Looks like it might be relevant again?

triple short the SPY using SPXU!

I have been waiting for this. I think the FRBNY is crowding my trade shorting the market to bury Bo Bo.

Village Smithy's picture

Stocks belong in the back of my pick-up with all the other junk I'm taking to the dump this afternnon.

scatterbrains's picture

If the CFTC doesn't lower  /ES margins after the close today then that tells me Berstanky tapped out (ufc style) on the news that Germany wants to see their gold.  Has the fed pulled all their manipulation games suddenly ?

LiesAreTheOnlyTruth's picture

You can count on some kind of statement or words.  They're so all-in, with unlimited reserves, they will never let this go where it should.  With unlimited buying power (100 trillion if necessary) ... they can win if they just do more!

That's the fantasy they live in of course. 

icanhasbailout's picture

PPT looks to be defending Dow at -250 psychological level

adr's picture

Stocks belong at the point before the fantasy began.

Sadly for most longs, that would be around March 15th 2009 when myth to market allowed companies like Diedriech Coffee to suddenly explode 3000% in a couple days.

$.88 to a buyout of $35 by Green Mountain in less than a month. I'm sure there were real fundamentals driving that move.

Or Select Comfort going from a hundred million dollar loss to a mutli-million dollar gain in one quarter. Which led to what, a 5000% surge in the stock over a year?

The miracle of Myth to Market. Obama's great gift to The Squid.

101 years and counting's picture

E for 2012 will come in at ~$88.  slap a 12P on this and 1050 is about right.

but, during earnings recessions, P drops to 10.  ok, 880.

DeadFred's picture

Thanks. Now that trend support has a stake through its heart I was wondering where things are headed. Heading toward the end-world support at 1360ish looks good. Conclusion: don't sell VXX yet.

LiesAreTheOnlyTruth's picture

I'm feeling the same ... especially since there's few if any shorts to cover quickly :)  Shorting has been destroyed by the Fed, so no covering would mean little or no bounces in the future and a lower floor.

These are the times when shorts are nice to have out there covering ... too bad the Fed shot them all in the back ;)

LiesAreTheOnlyTruth's picture

Well ... if it's inflation you want, it's inflation you got!  Don't bet we fall too far ...

Check this out...


Almost FOUR times as many $100 bills being printed than $1 and up to 20x as many as other notes.

Just a matter of time until they bring the $500 back into circulation so you can pay for dinner with a single bill again!

icanhasbailout's picture

I'm guessing he's not an Obama voter.

nofluer's picture

The Powers That Be will need all those hundreds when they convert everything to cash and run for Argentina...

... where Kirchner waits to take them away from them so she can get her Tall ship out of hock.

Nobody For President's picture

PPT, report to the flight deck NOW!

Grand Supercycle's picture

SP500 impending sell off...

Despite recurring short squeezes, SPX etc daily charts continue to break down.

DOW 8 hour chart shows H+S (bearish pattern)