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Perfectly Broken Market Ramps On Yesterday's News

Tyler Durden's picture





 

Was it just yesterday that this efficient market rallied on Boehner's return and news that Obama will propose a scaled back Democratic Plan B (subsection ii, para (a))? Perhaps - or did we dream it? Anyway, stocks are beholden to nothing but the next flashing red headline and so - a 7 point ramp in the S&P 500 is warranted for no news whatsoever of any consequence:

  • *OBAMA TO MEET WITH CONGRESS LEADERS AT WHITE HOUSE TODAY
  • *OBAMA SAID TO PLAN OFFER OF SCALED-BACK BUDGET PACKAGE TODAY
  • *OBAMA PLAN SAID TO AVERT SOME OF TAX AND SPENDING CHANGES

 

The magical elevation did nothing but get us above VWAP and to unchanged on the day... enabling more unloads...

 

We hope it is becoming clear that every news-driven algo ramp is being used by professionals to unwind more of their biggest net long exposure in five years...

 

Chart: Bloomberg

 


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Fri, 12/28/2012 - 11:59 | Link to Comment ShrNfr
ShrNfr's picture

Obama's plan is simple. He gets everything he wants and you get to fuck off and pay his bills with Benny Bux.

 

Fri, 12/28/2012 - 12:29 | Link to Comment GMadScientist
GMadScientist's picture

Boehner's plan is simple. His friends get what they want and we all fuck off and don't pay the bills.

Fri, 12/28/2012 - 12:39 | Link to Comment SilverMoneyBags
SilverMoneyBags's picture

The cliff is the Dems plan. GOP will get nothing. So yeah...nice try.

Fri, 12/28/2012 - 14:03 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Nicest try! Boehner is soft, Obama is loser, but Putin is wins!

Fri, 12/28/2012 - 16:52 | Link to Comment rotagen
rotagen's picture

Your money is fake, created by a criminal cartel of banksters, who have you underlings, the governments of the world, and of course the media under your control.  Your "fiscal cliff" type articles are targeted mainly to people who eat this "investment" media brand of fecal material.  Therefore if you are capable of using your brain you proceed directly to questioning the motives of this type of media claptrap fiscal cliff/austerity circus.  Couple ideas:  right now they want the market as low as possible (possibly to buy in before some BS media-vomited halleluyah event).  

In the larger context?  They are phasing in a tighter police state, continuing to destroy the middle class, with the goal of creating labor camps and homogenizing the world to peg everyone at your average Chinaman wages... bowl of rice per day.  I guess they gave up on the "buy side" of economics.

Fri, 12/28/2012 - 12:02 | Link to Comment Dr. Engali
Dr. Engali's picture

As advanced as the robots are, they sure are stupid and easy to fool .....at least for now. Here's the deal robots....we are going over the cliff no matter what bullshit your algorithms come up with.

Fri, 12/28/2012 - 12:02 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The robot robots aren't as sophisticated as the human robots....yet.

<AI anyone?>

Fri, 12/28/2012 - 12:23 | Link to Comment DeadFred
DeadFred's picture

Ages of fine tuning the human neural system has enabled us to distinguish the small inconsistencies (cognitive dissonances?) between truth and lie. Programming that into a machine is a daunting task. What we have now is market run by very fast machines that are unable even see the BLS data for what it is. Besides, at the nanosecond level yesterday and ten minutes ago are both considered ancient history.

Fri, 12/28/2012 - 12:30 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

"Sophisticated"

While the Greek root of the word is "sophia" or wisdom, the underlying gist was developed in Ancient Greece and called sophistry, or the art of deception.

You always need the truth in order to lie.

Wait until the algos figure out that one.

Fri, 12/28/2012 - 12:39 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

In some people's minds the ultimate sophistication is the art of the Big Lie.

Sat, 12/29/2012 - 20:25 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

The SALESMAN.

Fri, 12/28/2012 - 12:48 | Link to Comment toady
toady's picture

We can only hope they go over the cliff. The second option at this point is some delay-the-cliff 30 days bullshit.

Fuck it. Let the chips fall where they may.

Fri, 12/28/2012 - 12:00 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

"The magical elevation did nothing but get us above VWAP and to unchanged on the day... enabling more unloads..."

It does appear that the rats are abandoning ship.

Fri, 12/28/2012 - 12:01 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Please don't disparage Dear Leader.

The computers might take it the wrong way !

 

New York Mayor Michael Bloomberg suggested that gun control should be the top item on President Obama’s second-term agenda and called on him to lead the debate.

“The president has to lead, tell this country what to do,” the Democratic mayor told NBC.

Fri, 12/28/2012 - 12:02 | Link to Comment Cursive
Cursive's picture

Only in America could you create a financial exchange that can "wealth" from regurgitated bannana peels.

Fri, 12/28/2012 - 12:05 | Link to Comment caimen garou
caimen garou's picture

Thanks Cursive, made me spit coffee with that post!

Fri, 12/28/2012 - 12:13 | Link to Comment francis_sawyer
francis_sawyer's picture

The banana peels work for the 'flux capacitor' [if you add a couple of beer cans to the mix]... That's where all these geniuses got the idea in the first place...

Fri, 12/28/2012 - 12:02 | Link to Comment caimen garou
caimen garou's picture

somebody is going to break a finger pushing thoes buttons so fast! long finger splint manufacturers!

Fri, 12/28/2012 - 12:04 | Link to Comment SuperDeDuper
SuperDeDuper's picture

The plan: Short the market til 10:15, go long, sell at 3:55.  9 out of 10 times youll make money.  Live in paradise. Drink fruity cocktails.  Even a caveman can do it!

Fri, 12/28/2012 - 12:10 | Link to Comment happel
happel's picture

Just buy the fucking dip! Guaranteed trade every day.

Fri, 12/28/2012 - 12:06 | Link to Comment ApollyonDestroy
ApollyonDestroy's picture

Why can't they all just die alrady???

Fri, 12/28/2012 - 12:08 | Link to Comment TheMayor
TheMayor's picture

Stop Obamunism!

Fri, 12/28/2012 - 12:09 | Link to Comment Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

rehypothecated bread, makes me hungee.

Fri, 12/28/2012 - 12:12 | Link to Comment yogibear
yogibear's picture

Bots like the patterns so they trade on it. Program trading is huge now. 

So what if there is an occasional flash crash and accounts blow up somewhere.

The taxpayer is always there to always suck up the losses if it gets bad.

Fri, 12/28/2012 - 12:18 | Link to Comment SheepDog-One
SheepDog-One's picture

So apparently we will not see any market drop to scare 'lawfakers' into 'action'....they'll just pretend they did and actually ramp markets and sell the rips to grammas pension fund.

Fri, 12/28/2012 - 12:13 | Link to Comment youngman
youngman's picture

Do you think they will just talk about the 2%......or maybe milk prices...or maybe medical devices...or maybe the AMT...or maybe that military spending..or maybe the new 35,000 on SSI...or maybe that family farmer that will lose his farm if he dies...especially at todays farmland prices...so many things..I hope they have nice bottled water...

Fri, 12/28/2012 - 12:14 | Link to Comment SKY85hawk
SKY85hawk's picture

I was thinking about my grade school Civics class.

We were taught about the checks and balances in US Government.

Legislative - Congress makes Spending plans &  Tax laws;

Executive  -  The President carries out the 'Orders' of Congress;

Why the !**@ is Obama telling Boehner & Reid what to do?

Fri, 12/28/2012 - 12:16 | Link to Comment SheepDog-One
SheepDog-One's picture

Yea, turned it into a Kleptocracy and no one even noticed....the sheeple were kept calm for many years with EZ Credit and such, and now they're screwed and nothing anyone can do about it really.

Fri, 12/28/2012 - 12:23 | Link to Comment Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Obama is an African-American progressive democrat.

 

When he does it, whatever it is, it *is* Constitutional.

 

Don't you get it, maing?

Fri, 12/28/2012 - 12:27 | Link to Comment GMadScientist
GMadScientist's picture

So kinda like Dubya's justification for torture then?

Fri, 12/28/2012 - 12:31 | Link to Comment Spastica Rex
Spastica Rex's picture

Obama is just a bagman for the elite. Point out a pol in Washingtion who isn't.

All the rest of the political labeling is mere propaganda for the dumbfucks.

ROOT FER YER TEAM! GOD'S ON YER SIDE!

Fri, 12/28/2012 - 13:21 | Link to Comment toady
toady's picture

I get so tired of these circular arguments ...

Obama is an ineffective president who is not providing leadership

Obama is destroying the constitutional limits of his office by dictating to the house.

Boner pushed the houses responsibilities off on others and went on vacation.

Reid won't do anything except repeat the line about boner abdicating his responsibilities.

None of these fucks could lead their way out of a paper bag.

Fri, 12/28/2012 - 12:26 | Link to Comment GMadScientist
GMadScientist's picture

You mentioned checks and balances, one of which is the VETO,...better to have your ducks in a row up-front than play Nazi and pass 20 bills to get one signed, eh?

And why were Republicans (McConnell, Boehner) calling for Obama to make proposals?

 

 

Fri, 12/28/2012 - 13:46 | Link to Comment SKY85hawk
SKY85hawk's picture

If you look behind the curtain you'll get more questions!

The corporation, UNITED STATES OF AMERICA, has exempted itself from all GAAP rules of fiscal management.  Proper accruals and timely reporting of the true condition of our country's finances would have woken people up many years ago. 

I hope Y'all remember that Obama and Boehner signed the 2011 Budget Deal. 

If Barry was true to his campaign promises, he would have vetoed the expiration of Bush tax cuts for the NON-wealthy.

Is it possible that these theatrical games prove that some politicians have woken up?

 

Fri, 12/28/2012 - 14:12 | Link to Comment GMadScientist
GMadScientist's picture

Look, I'm still pissed off at LBJ for line-items approved before my birth...if your position is that either side of the aisle has been sincere about debt management at any point in the last 45 years, you don't have a leg to stand on.

Do you really pretend that the "NON-wealthy" aren't already paying SS from their checks and sales tax on every inflexibly demanded transaction in their lives? Do you think that the published rates for taxation really have meaning or can you understand that effective rates (which barely move at all) are the crux of the biscuit?

The time to choose not to spend was the 80s, we spent and cut taxes. The time to choose to pay for our largesse was the 90s, we spent, cut taxes, and deregulated our financial sector completely. The time to avoid the spiral into oblivion was the 2000s, we got cheap drugs, two wars, and cut taxes.

http://www.youtube.com/watch?v=BaB9dow1eR4

"My votes a bet in a football pool; 5 on the red, 6 on the blue...wake up fools, there's no time for a shouting match."

 

Fri, 12/28/2012 - 14:47 | Link to Comment SKY85hawk
SKY85hawk's picture

I know how much NON-wealthy are paying in FICA and Medicare.

I'm pissed that money that should have gone into a 'pension' fund was spent immediately. 

A file cabinet full of special treasury notes doesn't go up in value.

Now, the Great Ones are squabbling  about  a 6% reduction to a trillion deficit.

Do you remember the Clinton Tax Increases in 1993?

They 'promised'  SURPUSES AS FAR AS THE EYE CAN SEE.

Now these illusionists try to say govt spending can't be reduced?

The Democrats say 'ignore the Fraud & Waste in Medicare'. 

CBO has suggested cuts in goofy programs that would also save $100 billion.  http://www.heritage.org/research/reports/2009/10/50-examples-of-governme...

Now we're talking about 12% cut in the deficit.

 

Someone should lobby for outsourcing the claims function to companies that has a track record in controlling these huge costs.

 There should be more attention to these points, or we'll be in as much trouble as Greece and Spain!

 

Thank You for your time.

 

Fri, 12/28/2012 - 12:25 | Link to Comment IridiumRebel
IridiumRebel's picture

http://www.dailyfinance.com/2012/12/27/investors-yank-150-billion-from-s...

 

The U.S. stock market has been on a bull run since early 2009. At the same time, individual investors have been pulling billions of dollars out of stocks each year.

As the S&P 500 rallied about 13% during the first eleven months of 2012, individual investors yanked about $152 billion from the U.S. stock market, according to data from EPFR Global, a Boston-based firm that tracks fund flows for both mutual funds and exchange traded funds.

That marks the third year in a row that investors have withdrawn more than $150 billion from U.S. stock mutual funds and ETFs.

While individual investors have been shunning the market, institutional investors, such as hedge funds and pension funds, have been significantly adding to their stock positions. They've poured more than $80 billion into stocks so far this year.

"Retail investors and institutional investors have acted in complete opposition since the March 2009 lows," noted Simon Ringrose, managing director at EPFR Global.

In November alone, individual investors pulled nearly $19 billion out of the market, the most since August 2011, when the debt ceiling debacle and the Standard and Poor'scredit rating downgrade took center stage. November's big bleed was a result of more political wrangling in Washington -- this time over the fiscal cliff.

The mass exodus from stocks isn't exactly new. While individual investors have been taking money out of the stock markets since 2005, the outflows accelerated considerably beginning in 2010.

Experts have largely pinned the reason for the stock dump on the Baby Boomer generation.

They represent the largest group among retail investors, and after having their portfolios rocked by the dot-com crash and the financial crisis, they've shifted out of stocks and into bonds much earlier than usual as they head into retirement.

And any money do they do have in the market is consistently going into bond funds, said Ringrose.

Since the beginning of this year, individual investors have plowed more than $90 billion into U.S. bond funds, the most since the record $117 billion in 2009, according to EPFR.

A lack of confidence among investors across age groups has also been a factor, in the wake of high-frequency trading, and incidents like the May 2010 flash crash , Nasdaq's bungled Facebook IPO (FB) and the Knight trading glitch (KCG).

Fri, 12/28/2012 - 12:30 | Link to Comment Hedgetard55
Hedgetard55's picture

Boyz need to keep Dow above 13k for their bonuses, they will sell like crazy come January.

Fri, 12/28/2012 - 12:38 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Yep. All of these "stories" seem to come out just when the Dow crosses or nears the magical 13k mark.

Just coincidence, I know. I've been told more than enough times that there are no conspiracies between or among the rich and powerful elite.

Mere coincidence.

Fri, 12/28/2012 - 12:39 | Link to Comment TruthBeforeAll
TruthBeforeAll's picture

All algos are now scanning Drudge looking for the word "DEAL!". It must have the exclaimation point after it to trigger the action though.

Fri, 12/28/2012 - 12:46 | Link to Comment Tsar Pointless
Tsar Pointless's picture

From Bloomberg.com article on the meeting today:

http://www.bloomberg.com/news/2012-12-28/obama-said-to-plan-offer-of-scaled-back-budget-package-today-1-.html

"The plan would delay or replace part of scheduled federal spending cuts, most likely the defense portion, the aide said."

No! The hell you say! This is my shocked face.

Fri, 12/28/2012 - 12:58 | Link to Comment JR
JR's picture

Posted wrong.

 

Fri, 12/28/2012 - 12:52 | Link to Comment devo
devo's picture

This just in: humans have landed on the moon!

Fri, 12/28/2012 - 13:09 | Link to Comment Glass Seagull
Glass Seagull's picture

 

 

Artificial intelligence.  Does intelligence imply a good memory?

Yes?  or Not Yes?

Fri, 12/28/2012 - 13:18 | Link to Comment Downtoolong
Downtoolong's picture

 Top Algo Buy Keywords for 2013:

QE, Bernanke, Stimulus, Trillion, ZIRP, ….

 

Top Algo Sell Keywords for 2013:

Cliff (Robertson, Fiscal, Diving, Notes …it doesn’t matter which kind), Congress, Taxes, Regulation, Cramer ……

Keep it going…..

Fri, 12/28/2012 - 13:35 | Link to Comment ekm
ekm's picture

I've said it and I will say it again:

When you are inside an insect trap, all you can do is buy, buy and buy. The only way to get out is dead.

 

Take MFG as example: Since they were levered into buying italian bonds, the only option they had is to .........keep buying italian bonds. They came out of that situation, but they came out..........dead.

 

Conclusion: Whoever is into stocks right now(Primary dealers and pension funds) can get out of them only .....dead...since there's nobody else ready to buy from them.

 

Right now, crude oil leveraged long holders look to me like MFG. 

Fri, 12/28/2012 - 14:34 | Link to Comment muppet_master
muppet_master's picture

12/28/12 fri. @ 1323 EST

spx down -0.5% to 1411...when tyler posted @ 1057 EST...spx @ 1415..= wow that was RIGHT AT THE END OF THE PEAK = dead cat bounce !!! Mr. Tyler PLEASE DO NOT BECOME A SHOE SHINE BOY !! = INADVERTENLY announcing TOPS !!

yesterday I told the shoe shine boy performance chasers...verbatim:

HURRY !! BUY HIGH...low was 1402, NOW you can buy it for 1417+......

and now we see the results....just wait for a -20% sell-off

by the way...i woke up @ 8:30AM this morning, CA time = 1130 EST..."missed the short squeeze" on my short posiitions...LOL !!!!

sooooo easy to ride !!! took some profits yesterday @ spx 1404...reloaded them @ 1414-1417....while keeping most of my core short position INTACT

Fri, 12/28/2012 - 15:26 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Ummm...am I missing somehting here? Can anyone assit here?

All probable Cliff scenarios lead to a lower eqity market. "Austerity" policies can lead to lower rates and ergo increase GDP, howecver interest rates are essentially negative now....so "Austerity" can only lead to relative austerity.

  • They agree on higher taxes on those > 400k to 1MM.
  • They agree to cut spending (doesn't matter which program) by 10%.
  • They agree to lower Medicare payments, extend SS collection age requirements.

All lead to a lower GDP for 2013.

  • If they do nothing - sequestration / higher taxes automatic spending cuts.

All lead to lower GDP for 2013.

  • Raise taxes on "wealthy" (> 400k - 1mm and above)
  • No real spending cuts - shift Titanic's deck chairs with Mediacre / SS.

Still leads to lower GDP.

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