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Overnight Market: Futures Breaking Below Draghi-Believe Lows

Tyler Durden's picture




 

S&P futures are being crushed overnight. Currently trading below the levels of September 5th Draghi comments (back under 1400) and -11pts from the close. AUD is weak, Treasuries are modestly bid (as is the USD) and commodities are rolling over. The catalyst? We see four things: 1) Delayed reaction to global supply chain implications of an AAPL outlook cut (and/or overseas holders hedging) as well as some missed earnings in China; 2) Major Aussie quasi-bank Banksia (yes, its really called that!) hitting the skids (a la Northern Rock) bringing fear that Australia is entering 2008-mode USA; 3) a NYT article which could be inferred as a direct attack on the Chinese political faction (exposing Wen Jiabao's hidden billions); and/or 4) a realization that at 14-plus x P/E multiples, the US equity markets are not pricing in anything the kind of possible pain a fiscal cliff scenario (or Romney-ite in the Fed) might bring. Of course, the need for a narrative is irrelevant, the most net long position since 2008 is unwinding (for now) but by the time we wake for New York's morning, things could have reversed once again.

 

S&P 500 futures are down over 11pts at 1396.50 - 100DMA is 1388.75, 200DMA is 1364.5

 

AUDJPY is 1 big figure down from yesterday's highs.

TSY ylds are 6bps down from yestereday's highs.

WTI is at the lows of the week - around $85.

Gold and Silver are sliding - down 1% on the week at $1703 and $31.79 respectively.

The NKY, Tpoix, and Hang Seng are down around the same 1% or so as US equity futures but the Shanghai Composite is down 1.7%.

 

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Fri, 10/26/2012 - 01:10 | 2920713 This is the end
This is the end's picture

Could Ben and the Printerettes really fall short with only 8 trading days left to the election?!!! That would be the ultimate "October/November surprise". Stay tuned to find out........

Fri, 10/26/2012 - 02:29 | 2920783 saturn
saturn's picture

The market is crashing, where the hell are Bernanke and Draghi now???

Fri, 10/26/2012 - 03:12 | 2920809 devo
devo's picture

Who do you think was buying Apple and Amazon after hours??

Fri, 10/26/2012 - 06:52 | 2920923 Spirit Of Truth
Spirit Of Truth's picture

Ben and Draghi will be historical footnotes to the idiocy of a generation that worshiped money instead of God.

http://thespiritoftruth.blogspot.com/2012/10/some-apocalyptic-ranting.html

JMHO.

Fri, 10/26/2012 - 04:40 | 2920854 HD
HD's picture

 They are alone together in a helicopter cockpit high above the markets - about to inject some desired liquidity...

 Ben turns to Draghi: Mario, do you like movies about gladiators?

Fri, 10/26/2012 - 06:35 | 2920913 elams1894
elams1894's picture

Mario: No.  Have you ever been in a... in a Turkish prison?

Fri, 10/26/2012 - 01:14 | 2920721 Ms. Erable
Ms. Erable's picture

Ruh roh. Funny, but this one doesn't 'feel' like a bear trap...

Fri, 10/26/2012 - 01:31 | 2920742 The Shootist
The Shootist's picture

I don't kow. The consensus seems to be that a 'pullback' is coming... what with the fiscal cliff and all. Plus Apple, or the iConomy is a damned bubble. But kicking the can is so easy.

Fri, 10/26/2012 - 03:27 | 2920819 Dr Benway
Dr Benway's picture

Banksia was sold to Aussie granny investors on the premise of higher yield yet still being safe and backed by property. Of course the lowering of the cash rate only pressures granny investors to move more money to such assets.

 

See this as a portent of things to come, as plenty of other schemes have been sold in exactly the same way while having the same outsized undisclosed risks. One example is hybrids. Another is my personal favorite, the listed investment company (LIC) scam:

 

http://s1144.photobucket.com/albums/o489/_DrBenway/The%20Great%20Australian%20Investment%20Ponzi/

Fri, 10/26/2012 - 08:03 | 2920971 CrimsonAvenger
CrimsonAvenger's picture

It is, until it isn't.

Fri, 10/26/2012 - 02:08 | 2920769 Awakened Sheeple
Awakened Sheeple's picture

Stay nimble..my gut tells me we see a reversal tonight or tommorrow. I covered shorts AH. Will reload on a bounce. Then hopefully this thing goes down in flames.

Fri, 10/26/2012 - 01:16 | 2920724 Lazlo Toth
Lazlo Toth's picture

Look Donald.... You already got your spotlight... just stop it......

Fri, 10/26/2012 - 01:18 | 2920726 Dr. Engali
Dr. Engali's picture

It's too bad old Benny boy chased away all the bears. The fall will be epic with no buyers at lower levels.

Fri, 10/26/2012 - 02:17 | 2920775 Bay of Pigs
Bay of Pigs's picture

LONG gold and schadenfreude

Fri, 10/26/2012 - 09:29 | 2921189 fuu
fuu's picture

Schadenfreude[SCF] +3135.83% over the last 5 years.

Fri, 10/26/2012 - 01:19 | 2920728 a growing concern
a growing concern's picture

Don't you mean Quasi Mohammed Bank?  Jeez, you guys are getting really sloppy with your reporting.

Fri, 10/26/2012 - 01:24 | 2920733 vinayjha
vinayjha's picture

What have this idiot Draghi and fellow EU finance minister done so far ?

Just talked BS

 

http://stks.co/nDJb Everything you need to know for Oct 26th trading.

Fri, 10/26/2012 - 01:28 | 2920740 Jugdish
Jugdish's picture

Soon the Aussies will evolve to biker muscle fags in truck tire armor ravaging the countryside for high octane gasoline as was predicted in the movie Road Warrior.

Fri, 10/26/2012 - 01:35 | 2920745 The Shootist
The Shootist's picture

Lol, Bartertown bitchez.

Fri, 10/26/2012 - 01:55 | 2920749 awakening
awakening's picture

Is Mad Max to us Australians, and the American accented version was horrible in comparison.

Edit; Coming back on topic,

'As a non-bank lender, Banksia offers investors high interest on debentures and then lends these funds out as mortgages or commercial property loans.'

After reading ZH for so long (and doubting the workings of world economics before that), combined with our tighter economic times (don't let the Murdochs fool you into believing otherwise), I am not surprised at the demise of Banksia. I even dare to say it was long overdue; as by my observations down here people have been tightening their belts (so much for the fat biker image =P ) lately on consumer spending (recent inflation figures aside), seeing more store front vacancies (fwiw; I'm not alone with that observation so its not a local issue) and many other things beyond my grasp have all meant this was bound to happen.

Here is to hoping this is the big wake up call desperately needed down here, giving the doubters around me that sweet moment at last when I can say "I told you so!".

Fri, 10/26/2012 - 02:32 | 2920785 Orly
Orly's picture

Here is a thoughtful article by Andy Xie of Caixin Online, courtesy of Rupert over on MarketWatch.  I'd love to get your take on it, as I trade 4X and my biggest dream is to retire on the decline in the AUDUSD.

http://www.marketwatch.com/story/australia-facing-a-hard-landing-andy-xi...

Thanks.

Fri, 10/26/2012 - 03:44 | 2920825 awakening
awakening's picture

Note that I'm no financial guru in any sense (at best I'm probably the mug you'd not look twice at in the street, half the time being by design on my part I admit) but that article is interesting. Since my opinion was asked for though; I'll do my best by picking out what captures my attention the most amongst it.

In general; most of the points presented in the article are spot on (especially the reasons that support a financial crisis) and picking out penny mining stocks in the hopes that they strike gold (pardon the pun) is a plausible way to make some winnings in the market (if only to avoid the HFTs as ZH noted on the ANZ open a short while ago). An weakness to the article is predicting 'when' the crash will happen though, as a new rabbit out of the hat from Bernanke or others could kick the can further than 2013 (I hope not, the can kicking has to end) and change the dynamics of the financial game.

"Through good research, he has picked more winners than losers. He recently spent millions of his winnings to buy a posh property close to the conference venue. “There are such opportunities in Australia,” he proudly told me."

Though otoh this above quote IMO (Murdoch does a hard sell about getting into 'real estate', not plausible as negative gearing has helped prop up prices and property demand beyond what new potential market entrants [akin to young adults living in their American parents basement] ) is a good way to waste those winnings. Property in CBDs is (if not only my opinion) heavily overpriced and in many cases the value of land in these areas is worth much more than the buildings sitting on top of it. Given the millions cash in hand I have would personally (if you forgive my rambling on here) spent it on rural property (you can get much more than a quarter acre for that kind of money without having to go 'bush') and maybe entertained the thought of grabbing some physical bullion (mandatory "gold, bitchez" here for ZH).

" This dynamic is behind the mining investment bubble in Australia. When it bursts, its multiplier effects would force its economy into a hard landing."

Plausible, ZH has been warning of such a possibility via articles relating to China. I was surprised by the recent ZH article (here: http://www.zerohedge.com/news/2012-10-21/chinese-gold-imports-through-au... ) showing Gold exports surpassing coal as our second biggest Chinese export. If it were not for the gold buying of China (though in the long term may cause a problem for the governments ties to the US with thanks to the 'currency war') I'd say it would be obvious to all now that Australia is in a lot of trouble.

'as I trade 4X and my biggest dream is to retire on the decline in the AUDUSD.'

I'm afraid I don't know much about forex, but if your planning on the AUD falling against the USD then I think (not financial advice) this is a good plan but only IF the USD can hold out long enough against the AUD to outlast the upcoming crash and the currency war with China (which leads back to the above ZH Chinese Gold Imports article).

Again I'm not a financial master of any stretch of the imagination (but I do know enough to know I would be the 'sucker at the table' were I to play in them) and quite happy to sit them out with what little coin I have (and perhaps a little bit of the old yellow if I get the chance to do some prospecting myself =) ).

 

edit

Finally, if your looking for more of an Australian perspective on things down here, then maybe you'll find a few threads on a web forum called Whirlpool enlightening: http://forums.whirlpool.net.au

Fri, 10/26/2012 - 09:09 | 2921130 Orly
Orly's picture

Great.  Many, many thanks, awakening.

:D

Fri, 10/26/2012 - 06:39 | 2920915 elams1894
elams1894's picture

Mad Max brother.  I always wanted to know what it was like Beyond the Thunderdome.

Fri, 10/26/2012 - 01:54 | 2920752 Milton Waddams
Milton Waddams's picture

i just threw up all over myself; in the interim does a chart like this mean anything to anyone?

 

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Fri, 10/26/2012 - 02:32 | 2920786 Orly
Orly's picture

Sure.  It means you have to go back to HTML school.

:0

Fri, 10/26/2012 - 01:54 | 2920756 lolmao500
lolmao500's picture

http://world.kbs.co.kr/english/news/news_Ec_detail.htm?No=94154

Standard & Poor’s downgraded the credit ratings of three French banks including BNP Paribas on Thursday.

The global credit appraiser also put forth a negative outlook for 10 French banks, including Societe Generale.

Aw yeah! Will Fitch fire back with a downgrade of the US??

Fri, 10/26/2012 - 01:56 | 2920760 chump666
chump666's picture

looks like a liquidation trade, hedge funds selling aisa, australia, gld is being sold hard, which is a good indication of liquidating trade, rather than safe haven.  it's the darling of the market aapl.  if there was any catalyst for a major sell. thats it.

Fri, 10/26/2012 - 02:00 | 2920763 Spitzer
Spitzer's picture

Gold miners are beating estimates.

I don't think gold will be down much tomorrow..

Fri, 10/26/2012 - 02:06 | 2920766 The Shootist
The Shootist's picture

I was going to ask what was going to be a major sell chump? Apple, gold, or risk? Or everything.

Fri, 10/26/2012 - 02:06 | 2920768 Bastiat009
Bastiat009's picture

You mean on Saturday? :-)

Fri, 10/26/2012 - 02:35 | 2920788 Orly
Orly's picture

Looks like EURUSD headed back to the Fibo at ~1.285.  Along that time-frame, the sell-off should be over by early a.m. Tuesday.

Fri, 10/26/2012 - 02:03 | 2920762 lolmao500
lolmao500's picture

Oh right it was in the article... LOL

http://m.perthnow.com.au/business/thousands-of-victorians-have-their-cas...

Thousands have their cash frozen after collapse of Banksia Financial Group
Fri, 10/26/2012 - 02:57 | 2920803 Uber Vandal
Uber Vandal's picture

But it was given a clean bill of health less than 4 weeks ago.....

http://www.smh.com.au/business/auditor-gave-banksia-accounts-a-tick-2012...

If you really want to see that deer in the headlights look, ask someone if the money they have in their accounts is actually theirs.

Fri, 10/26/2012 - 02:11 | 2920771 q99x2
q99x2's picture

Holy shit if AAPL is falling that means gravity must still be in existence.

Fri, 10/26/2012 - 02:24 | 2920780 Duke of Con Dao
Duke of Con Dao's picture

here's my 2 cents...

Einhorn's answer to the question about Fed policies of 1937 was not very convincing...

the questioner caught him with his proverbial pants down...

now for some entertainment:

YouTube - Victim of Campaign He Blew his Mind out in a Fridge: Here's a Voter who would not Take It Anymore!

(with a De Niro voice over from Taxi Driver and John Cusack )

Fri, 10/26/2012 - 02:31 | 2920784 devo
devo's picture

Gold, unfortunately, still hasn't decoupled. People still don't understand what is going on.

Fri, 10/26/2012 - 02:37 | 2920789 Orly
Orly's picture

Gold is not going to decouple.  It is a ramp-driven asset, same as the Australian dollar.  As the Ozzie goes, so goes gold.

Fri, 10/26/2012 - 02:39 | 2920790 Spitzer
Spitzer's picture

Its paper gold. Paper/digital gold might not decouple but that is the price we will see when the bond bubble bursts. In the end, physical rules.

Fri, 10/26/2012 - 03:12 | 2920794 GoinFawr
GoinFawr's picture

Au red. Ag red. Cu red. Heating oil red. Brent red. WTI red....

Natty through the freaking roof.

That's two 'opposite days' in a week

Don't blink folks.

Fri, 10/26/2012 - 13:31 | 2921370 GoinFawr
GoinFawr's picture

CONTANGO FANDANGO'd?

MALArKETS

Fri, 10/26/2012 - 02:49 | 2920796 q99x2
q99x2's picture

Dow 13,000 for the 13,001st time. YeeeeeHaaaaaa.

Fri, 10/26/2012 - 02:53 | 2920799 The Shootist
The Shootist's picture

I want to dust off my DOW 10,000 hat. Wait, no, I want to get that hat.

Fri, 10/26/2012 - 02:52 | 2920798 lolmao500
lolmao500's picture

Creditanstalt 2012 style?

Fri, 10/26/2012 - 04:17 | 2920847 Julian
Julian's picture

Australians yet to wake up to this...not in major newsfeeds yet.  Nothing mentioned..silence http://www.adelaidenow.com.au/news/breaking-news/australian-market-preview/story-e6fredec-1226503573291

Fri, 10/26/2012 - 04:49 | 2920861 Never One Roach
Never One Roach's picture
NSW, Victoria post biggest drop in house prices

 

http://smh.domain.com.au/real-estate-news/nsw-victoria-post-biggest-drop...

Fri, 10/26/2012 - 04:49 | 2920863 HD
HD's picture

Either TPTB can hockey stick this thing or they can't. If they can they will...

...if they cannot, when that reality hits the index chasers and the see-no-evil BTFDers will soil themselves running for the blocked exit.

 

Fri, 10/26/2012 - 06:56 | 2920928 chubbyjjfong
chubbyjjfong's picture

I am detecting the whif of collective pooey pants already.

Fri, 10/26/2012 - 07:05 | 2920932 DrDinkus
DrDinkus's picture

GDP...............oh my

Fri, 10/26/2012 - 07:38 | 2920948 malikai
malikai's picture

AUDJPY was nice last night. It's positive now, but I'm expecting overshoot.

http://blog.quantsig.net/2012/10/26/audjpy/

USDJPY has a bit further to go..

http://blog.quantsig.net/2012/10/26/usdjpy/

Fri, 10/26/2012 - 08:08 | 2920980 luckylongshot
luckylongshot's picture

Your reasons don't make sense. Banksia is only $0.6 Billion and China can't go into recession because it owns its central bank and recessions generally only occur when privately owned banks cut off the money supply. The Chinese can provide limitlesss funding for whatever projects they choose so can create jobs whenever they want to. This feels more like a growing realisation that things are going downhill.

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