Europe Squeezes Back To Wednesday's Reality

Tyler Durden's picture


Quite a shocker of a day in FX and European corporate bond and stock markets as shorts are squeezed back up to last Wednesday's levels. Sovereign bonds - which one would think the beneficiary of all the exuberance are flat as a Gaza-strip apartment building: +/-2bps in the last 4 days (aside from Portugal which rallied over 30bps today). The following four charts gives a sense of the anxiety both ways in this market with the low volume this week likely to help all those hoping for a final solution. Credit markets gapped tighter and kept going (one of the biggest moves of the year with XOver -35bps) with financials outperforming (more life-lines for the over-levered?); equity markets all retraced last week's losses in large part (aside from Greece); EURUSD broke back above 1.28 and its 200DMA; and Europe's VIX has collapsed from over 22% to 19.6% at the close today.


European Sovereign bonds unimpressed...(apart from Portugal)


European Stocks reverted back...


and corporate and financial credit soars/squeezes back to Wednesday's levels...with financials outperforming


As EURUSD rallied to two-week highs...


and Europe's VIX cliff dives...


Moves feel very squeeze-like wherever we look - not sustainable - and in general equities have considerably outperformed broad risk assets.

Charts: Bloomberg

Your rating: None

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Mon, 11/19/2012 - 12:58 | 2996110 Abitdodgie
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You have to love the Jews                                                                

Mon, 11/19/2012 - 13:02 | 2996124 slaughterer
slaughterer's picture

All the German institutional TA guys were calling a correction to DAX 6750.  Guess they were off by 200 points.  Oops.  

Mon, 11/19/2012 - 13:30 | 2996205 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture


  • The nationalist not only does not disapprove of atrocities committed by his own side, but he has a remarkable capacity for not even hearing about them.
  • Actions are held to be good or bad, not on their own merits, but according to who does them, and there is almost no kind of outrage — torture, the use of hostages, forced labour, mass deportations, imprisonment without trial, forgery, assassination, the bombing of civilians — which does not change its moral colour when it is committed by ‘our’ side.

George Orwell - Notes on Nationalism (1945)

Mon, 11/19/2012 - 13:01 | 2996118 mewenz
mewenz's picture

so much good stuff here...sure I'll be flamed but don't understand the gratuitous need to fan the fire of hatred

Mon, 11/19/2012 - 13:40 | 2996227 NooooB
NooooB's picture

The only people I hate are Racists..... And the Dutch....

Mon, 11/19/2012 - 13:40 | 2996229 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

You know,  I suspect that civilians blown up or maimed by bombs from fighter jets or drones don't give a particular fuck whether the guy pulling the trigger hates them or just feels a cold detachment.


I'd worry less about hate, and more about who's causing suffering.

Mon, 11/19/2012 - 15:18 | 2996499 mewenz
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"who's causing suffering"...yep, just far too often seems to be "the guy in the other uniform" according to far too many.  Someone "not like me" is the bad guy.  Guess I don't see it that way all the time.

Mon, 11/19/2012 - 13:02 | 2996130 Flounder
Flounder's picture

Wouldn't be surprised to see the equity avgs flat or neg today by the close.

Mon, 11/19/2012 - 13:13 | 2996158 TeamDepends
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My advice to you is to start drinking heavily.

Mon, 11/19/2012 - 13:03 | 2996131 Everybodys All ...
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Very predictable Thanksgiving week short squeeze. It happens over and over again on lighter volume days and weeks. Which will be setting up for a much larger correction once again testing lower lows this next time down imo.

Mon, 11/19/2012 - 13:26 | 2996196 Jonas Parker
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Gotta squeeze the stuffin' outta dem turkeys...

Mon, 11/19/2012 - 13:04 | 2996132 slaughterer
slaughterer's picture

Here comes 200DMA on ES at high noon.  Boehner and Pelosi seen holding hands outside a cinema?

Mon, 11/19/2012 - 13:08 | 2996142 ebworthen
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Go light on the corn dogs and bring your syrup of ipecac, this roller coaster is a doozy.

Mon, 11/19/2012 - 13:11 | 2996152 slaughterer
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Corn dogs?  Got to keep it light: Twinkies.    

Mon, 11/19/2012 - 13:10 | 2996145 OldE_Ant
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bad is good!  Every 1-1.5% up and down day is simply p-replay of 2008 where 1-2% up/down days turned into a 20-30% market drop.  This week has to be up so thanksgiving goes well and next week the booze wears off.

Mon, 11/19/2012 - 13:12 | 2996157 slaughterer
slaughterer's picture

OldE_Ant: next week correction is consensus.  Be brave, be contrarian, be a a robo-bull.  

Mon, 11/19/2012 - 13:13 | 2996156 geewhiz190
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the touts were out in force in the weekend press..  puff pieces on AAPL had to be an all time record.  wonder what Einhorn is doing today

Mon, 11/19/2012 - 13:14 | 2996160 LouisDega
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Spider update: Spider says im not ok Spider

Mon, 11/19/2012 - 13:15 | 2996162 ekm
ekm's picture

Do not be fooled.

This is my definition of the current stock market: A PERENNIAL HOPE/EFFORT TO LURE SUCKERS.


What's happening has got nothing, absolutely nothing to do with Israel or housing data or anything else.

The only current issue for primary dealers is that nobody else has money to buy the crap they've purchased and they are stuck. Hence Primary Dealers are FORCED to buy and buy and buy and buy.

Hence, stocks markets have no other way to go but to go FORCIBLY up until one or two primary dealers collapse.

The scheme never changes: Bear Stearns, Lehman, MFG, always the same.

Do not be fooled. Any news is irrelevant.

Mon, 11/19/2012 - 13:15 | 2996163 slaughterer
slaughterer's picture

WTI up 3%

Guess people figured out there is a war going on in Middle East and industries need oil to produce things.

Gee, who would have thought?


Mon, 11/19/2012 - 13:16 | 2996166 BraveSirRobin
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"What we have here is a failure to communicate."

Mon, 11/19/2012 - 13:16 | 2996167 fonzannoon
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one of the fast money people just suggested apple is stuck in a trading range. it was a woman. that was the only thing that kept the four guys from beating her to death on the air.

Mon, 11/19/2012 - 13:19 | 2996170 ebworthen
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Or the guy who said Apple is up 45% this year, so people are cashing out before capital gains taxes go up.

What?  Taxes affect behavior?  People taking profits?  What is CALPERS to do?  What will the Wall Street equity circus do if they pitch a big tent and no one comes?

Mon, 11/19/2012 - 13:24 | 2996185 slaughterer
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FB EOY tax selling will be a spectacle, I guarantee.  

Mon, 11/19/2012 - 13:30 | 2996206 nonclaim
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GRPN could offer year end discounted securities for FB, AAPL and what else.

(and yes, grpn is still listed)

Mon, 11/19/2012 - 13:55 | 2996273 SheepDog-One
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'Apple up 45% this year, so theyre all cashing out'....once again we're supposed to believe 'the greater fool' theory that theres an endless line of real dumb rich guys to offload your stawks to whenever, and also they dont mind taking the tax hit that the 'smart guys' didnt want to take. All just pure bullshit.

Mon, 11/19/2012 - 13:25 | 2996190 slaughterer
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AAPL has strong technical average at $666.  Brings out the best in everybody.  

Mon, 11/19/2012 - 13:19 | 2996171 dwdollar
dwdollar's picture

Time for the Bernanke Santa Claus cartoons...

Mon, 11/19/2012 - 13:24 | 2996183 q99x2
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per CNBC: The Federal Reserve Bank of New York won the dismissal of former American International Group Chief Executive Maurice "Hank" Greenberg's $25 billion lawsuit accusing it of acting unlawfully in bailing out the insurer during the 2008 financial crisis.

On another note: Goldman told clients to expect an 8% S&P drop. So, there is the confirmation of a stock market ramp.

Mon, 11/19/2012 - 13:34 | 2996217 slaughterer
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All types of people today complaining today about the D-bag bulls they see on CNBC and BBG and ... everywhere.  What if Kostin (GS) is the biggest D-Bag of them all?  We have Rosenberg and Janjuah both short -term bull right now, and ONE (count it, ONE) equity strategist at GS calling for 1250 EOY?  To top off the confusion at GS: we have the chief economist of GS calling for earnings momentum in 2013 and a base case scenario of a rally.    GS is like a faculty club where the staff like to debate each other through their wild forecasts after gourmet lunches.  It is like the "business card scene" in "American Psycho."  Clients, I mean muppets, be damned.  

Mon, 11/19/2012 - 13:30 | 2996204 tooriskytoinvest
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EU is doomed for a long time


Mon, 11/19/2012 - 14:29 | 2996365 inevitablecollapse
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we are all doomed for a long time

Mon, 11/19/2012 - 13:47 | 2996255 SmoothCoolSmoke
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Mon, 11/19/2012 - 13:48 | 2996262 LongSoupLine
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MSN online "money news" headlines:

there you have it...recovery is here.  unfucking real.

Mon, 11/19/2012 - 13:58 | 2996282 SheepDog-One
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Looks like desperation to find some bagholders.

Mon, 11/19/2012 - 14:18 | 2996332 LongSoupLine
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