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Dow 13,000 Regained On Lightest Volume Day Of The Year

Tyler Durden's picture




 

Hope for a Greek deal (which solves what exactly?) and a better than expected German IFO are the excuses for today's circa 1% spurt in stocks capping a 5-percent-plus jump off Friday's over-short lows. The best 5-day run in four months for the S&P 500 occurred with the lowest average weekly volume of the year - and as we noted earlier, amid one of the biggest short-squeezes we have seen. Correlations across asset classes rose significantly but it seemed EURUSD (and Gold) was as responsible as anything for today's magical carpet ride - especially the little dose of magic into the close. Treasuries trod water - completely ignoring equity's excitement. Silver and Gold popped notably (playing catch up to USD and stocks), as did Oil, with the USD sliding (-1.25%) non-stop on EUR strength (+1.85% on the week!). Have no fear, retirement is back on - Dow 13,000 is back with us... (but it appears, for now, the squeeze-ability is over)

 

Low volume, check! Rampapalooza, check! Technical Level to pin it on, check! And in case you were wondering - unlike Weds/Thurs trade size - today's average trade size was considerably larger (with some significant blocks going through into the close - pros fading the surge once again?)

 

Today was 'correlation' day...

 

... Gold snapped up to USD/Stocks weekly move and clung to them for the rest of the day... Gold still small winner YTD over stocks... Treasuries did not partake this time...

 

 

 

S&P 500 futures have retraced to pre-election levels...amid dismal volume (lower pane)

 

Commodities were in a frenzy once stocks opened...

 

 

Charts: Bloomberg and Capital Context

Bonus Chart - as a reminder - here is why the short-squeeze ammo is run out for now...

 

Bonus Bonus Chart: AAPL will be tested on Monday - we surge up 1.75% today with a huge push in the late day to regain that critical swing high and low around $571 (again with significant volume and block size). VWAP support still seems to be around $563 and we suspect (given volume patterns) that a close above $575 will signal a push higher, until then we are biased short.

 

and also on AAPL - on 2/12/2008, the 50DMA crossed below the 100DMA (with a downtrending 100DMA) and the stock lost over 10% in 2 weeks. Today - the same occurred... and average trade size was large today in AAPL (suggesting real money moving) just as it was at the peak-day...

 

 

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Fri, 11/23/2012 - 14:24 | 3006948 DavidC
DavidC's picture

What do you mean "with some significant blocks going through into the close - pros fading the surge once again?". Selling blocks?

I thought it was well over done at 12,900 given the news and numbers this week. Shows how much I know.

DavidC

Fri, 11/23/2012 - 14:26 | 3006953 fonzannoon
fonzannoon's picture

3 weeks market ramp. 1 week macro bad news to create selloff and sucker in shorts. 3 weeks market ramp. Rinse, repeat.

Fri, 11/23/2012 - 14:35 | 3006983 JPM Hater001
JPM Hater001's picture

Don't forget to take your shot for going back over 13000.

Use the weekend to prepare for a drop back below...you take a hit.

Fri, 11/23/2012 - 15:05 | 3007070 flacon
flacon's picture

Joy to the world! Christmas is here! Repeat the sounding Joy! /sarc

Fri, 11/23/2012 - 14:38 | 3006995 RopeADope
RopeADope's picture

More like a game of hot potato.

Month #1 - Nuclear War wipes out half of planet

Firm #1 with unlimited margin due to mark to model of trillions in derivatives - "Hey the market dropped and we weren't positioned, lets ramp it to go short"

Month #2 - Alien species launch biowarfare attack

Firm # 2 with unlimited margin due to mark to model of trillions in derivatives- "Hey the market dropped and we weren't positioned, lets ramp it to go short"

Ad infinitum

Fri, 11/23/2012 - 14:52 | 3006999 DavidC
DavidC's picture

fonzannoon,
Agreed. For myself though, I'd made a bit in the run down, stayed out in the rally and started shorting again in the high 12,800s.

Like I say, given today's move versus the figures (jobs the other day were BAD) and news this week, shows how much I know.

As per Tyler's leter post, the banks keep pumping it up while the retail market keeps leaving.

DavidC

Fri, 11/23/2012 - 20:07 | 3007679 disabledvet
disabledvet's picture

thanks for your liquidity. three years running now! hopefully you've had a massive short position in HP for some time now...how did Exelon do today?http://seekingalpha.com/symbol/exc?source=search_general&s=exc oops. looks like small caps really are starting to get "noisy." http://seekingalpha.com/symbol/iwm?source=search_general&s=iwm interesting that the index had a big selloff last year when the large caps really took off. without any economic recovery to speak of i think the "inflation hedge" of small caps still are struggling. http://seekingalpha.com/article/931951-flextronics-makes-the-case-for-lo... fascinating business model with this one: "contract manufacturing." As Patton famously observed "fixed fortifications is a monument to mankind's stupidity" so it would seem is "fixed plant an equipment." Flextronics actually "contracts out" the entire manufacturing system...scary idea actually. Pretty big on the revenue side but needless to say "not very popular politically." interesting idea though: "exactly how many specific parts do i need to manufacture anything?" and of course the answer is "fewer and fewer." never underestimate the ability of industry to drive down costs and improve the consumer experience. i've just finished reading the spec's on "Big Red's" new NC700X...this thing is a real winner at $7,000. needless to say "the way they make it is just as revolutionary."

Fri, 11/23/2012 - 14:28 | 3006959 Gubbmint Cheese
Gubbmint Cheese's picture

Janjuah said one more rip to 1500 before all hell breaks loose.

Fri, 11/23/2012 - 14:31 | 3006972 Winston Churchill
Winston Churchill's picture

Just baiting the Muppet trap.

Poisoned bait.

Oh well......

Fri, 11/23/2012 - 14:33 | 3006977 Boilermaker
Boilermaker's picture

That makes perfect sense.

Or, as Fast Money said, "sure, armageddon is around the corner.  But, that doesn't mean the market can't go up".

Fri, 11/23/2012 - 14:40 | 3007004 DavidC
DavidC's picture

Did it really say that?!

DavidC

Fri, 11/23/2012 - 14:55 | 3007045 Boilermaker
Boilermaker's picture

Oh yea.

Fri, 11/23/2012 - 14:30 | 3006966 falak pema
falak pema's picture

everything which is expensive needs to be light; so the photon is the the most expensive of particles. Something that we haven't realised. The day we can transform this jewel into an electron seamlessly, freely, we will be home and dry! 

Fri, 11/23/2012 - 14:30 | 3006967 Boilermaker
Boilermaker's picture

FUCK YEA!

Fri, 11/23/2012 - 14:31 | 3006970 vote_libertaria...
vote_libertarian_party's picture

Let me see, stocks rocket higher all week.  So that means:

 

Greece...fixed

ECB budget...fixed

Fiscal Cliff...fixed

Spain...fixed

Cyprus...fixed

Ukraine...fixed

Israel / Gaza...fixed

 

D'OOHHHHH

Fri, 11/23/2012 - 14:42 | 3007008 DavidC
DavidC's picture

You missed out

France...fixed
Italy...fixed
UK...fixed
USA...recovering nicely.

DavidC

Fri, 11/23/2012 - 14:33 | 3006976 buzzsaw99
buzzsaw99's picture

benniebux are like manna from heaven

Fri, 11/23/2012 - 14:33 | 3006978 Conman
Conman's picture

Yay! so JCP and HP fixed like europe? Also all those fired hostess employees got enough cheap walmart phones to sell on ebay? then all is well, buy buy buy!

Fri, 11/23/2012 - 14:35 | 3006984 Mongo
Mongo's picture

Dow 13000 is a registered trademark of ©Federal Reserve

Fri, 11/23/2012 - 14:43 | 3007013 DavidC
DavidC's picture

Hmm, as 10,000, 11,000, 12,000...

I've still got my 10,000 cap somewhere...

DavidC

Fri, 11/23/2012 - 14:58 | 3007050 NaiLib
NaiLib's picture

Manipulation day! Dax CFDs just popped 20 points on thin air :):)

Fri, 11/23/2012 - 15:00 | 3007059 Everybodys All ...
Everybodys All American's picture

We are just about there. I'll wait for Tuesday afternoon. Starting to think Dow 13,300 is possible.

Fri, 11/23/2012 - 15:11 | 3007088 LongSoupLine
LongSoupLine's picture

I can't even find the will to joke on this...

 

 

Especially when the SEC, CFTC, etc all sit and watch this fucked up horse shit happen...day in, and day out.

Fuck you Shapiro, Gensler and other regulators.  Fucking assholes.

Fri, 11/23/2012 - 15:32 | 3007127 virgilcaine
virgilcaine's picture

I'll be back Sun Eve to Re Short!.. went to Cash on Tuesday.

Turkey week is notorious for being a a little strange vol wise and price wise.

Fri, 11/23/2012 - 15:46 | 3007154 devo
devo's picture

Ramp up to make shoppers feel that wealth effect.

This is getting funny.

Fri, 11/23/2012 - 18:02 | 3007417 kwality
kwality's picture

Also, end of year ramp-up = profit taking before eoy while taxes are lower = more $ for Unkie Suga.

Agree w 1 down 3 up... gotta keep this pig flying past the End of Time and into the Brave New World....

Fri, 11/23/2012 - 15:52 | 3007169 orangegeek
orangegeek's picture

Yep - everything is bullish - fiscal cliff, austerity, double digit unemployment.  Today is just nothing but sunshine.

 

http://bullandbearmash.com/chart/dow-jones-weekly-trend-continues-losing...

 

The Dow weekly on the other hand, is not looking so good.

Fri, 11/23/2012 - 16:36 | 3007250 John Law Lives
John Law Lives's picture

Let the central planning fraudsters enjoy the week of gains in the "markets".  They haven't solved any structural problems around the world.  I don't care if someone GIVES Spain and Greece et. al. the money needed to pay off their debts or if the "fiscal cliff" is also averted in the US.  Nothing will turn the ship around until tens of millions of good paying jobs are created around the world and governments learn to practice fiscal responsibility.  Since none of us see that happening, weeks like this one will be forgotten soon enough as we hurdle toward the great R-E-S-E-T event.

100% FUBAR.

Fri, 11/23/2012 - 16:46 | 3007265 devo
devo's picture

Pretty much.

I think (?) everyone knows this, but they're trying to time trades in the meantime. Problem with that is it's high stake musical chairs.

 

Fri, 11/23/2012 - 17:13 | 3007328 John Law Lives
John Law Lives's picture

Small fries could get stomped the next time a flash crash occurs.  Their market limit sell orders might not fill in time on the downside and they could lose big if the sell orders are filled at much lower prices than they thought... and the SEC may not do a damn thing for them.

Tread lightly.  Their money (and Mark Mothersbaugh's money) could be gone in a flash...

Fri, 11/23/2012 - 16:55 | 3007286 razorthin
razorthin's picture

Why are you still looking for a fundamental reason for the ramp?  I told you all that the indices bounced off of trendline last week.  It was do or die, and it was perfect timing with oversold conditions on the daily and weekly charts.

Fri, 11/23/2012 - 20:15 | 3007704 disabledvet
disabledvet's picture

if as Zero Hedge has reported "nothing has changed" why should the market then not keep going higher as a consequence? Obviously the crazy people who sold everything because "the black guy just got reelected" have now been put in there place. trust me when i tell..."they were far from optimistic when he won 4 years ago." i sticking with "the girl that brung me to the dance." generally speaking changing anything in DC is well nigh impossible. that's WITHOUT a war i might add. but i digress...

Fri, 11/23/2012 - 20:55 | 3007784 sessinpo
sessinpo's picture

You have some serious misconceptions. Who sold everything based upon the black guy? No one. They simply shifted their assets into another market to protect themselves. For example, George Lucas blatantly expressed that he sold the rights to Star Wars to Disney, partly on tax purposes. He can now use those billions on other projects.

 

You better be careful of that girl that brought you to the dance, (funny- in my days it was the MAN that brought the girl to the dance), she might be sticking it to you.

Fri, 11/23/2012 - 20:38 | 3007742 stinkhammer
stinkhammer's picture

dear leader will not let us down 

Fri, 11/23/2012 - 20:50 | 3007748 sessinpo
sessinpo's picture

Time to look into selling rallies again. It was an easy call of the current rally on Nov 16. Another high wouldn't be a surprise over the next week or so based upon selectve retail reports. But generally, I see little net movement.

 

Additionally, I have some thoughts on the "fiscal cliff".

At best, I see the "cliff" as an excuse to sell.

1) Taxes are raised on everyone with or without spending cuts (sell)

2) Taxes are raised on whatever higher income earners with or without spending cuts (sell)

3) Taxes remain the same with or without spending cuts in a temporary bill until January when the new Congress starts (sell)

 

The only positive situation would be if taxes remained the same but then you still have the issue of economic weakness (sell)

 

I don't see any real substantial spending cuts. Usually cuts are promises put into the future that don't materialize.

I have lightened my short equities position since my call for a rally on Nov 16. Will be looking to re establish a larger short position as the dow sits around 13k. Congress after Nov 26 with a bried recess Dec 7-10 before adjournment Dec 14. Basically, that gives the government a little over a week to get a deal done.

Fri, 11/23/2012 - 23:55 | 3008039 ak_khanna
ak_khanna's picture

The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.
The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls
OR
When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.

http://www.marketoracle.co.uk/Article35345.html

www.letstalkmoney2012.in

Sat, 11/24/2012 - 22:51 | 3009280 DowTheorist
DowTheorist's picture

The Dow's rally is suspect.

 

Volume has not confirmed price action. Volume has been steadily declining in the last four days. Furthermore, volume at key pivot lows has been bearish. More on the bearish volume pattern here:

 

http://www.dowtheoryinvestment.com/2012/11/dow-theory-update-for-nov-21-...

 

Furthermore, last Nov 16 the Dow Theory flashed a primary bear market signal.  So the odds favor lower prices in the future. On average primary bear markets have lasted ca. 6 months. So, while nothing is carved in stone, it seems that we are merely witnessing a bear market rally. Those brave of heart could even attempt to short.

 

More on the primary bear market signal and the relevant chart here:

http://www.dowtheoryinvestment.com/2012/11/dow-theory-special-issue-afte...

 

 

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