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3% Market Ramp... On No Deal, And On Debt Ceiling Breach

Tyler Durden's picture





 

S&P 500 futures staged a 3% rally off their overnight lows - taking them back to 3-day highs as  headline after headline triggered another round of stop-runs. VIX compression led the way as hedges were pushed off to March and higher levels enabled better exits above Friday's plunge VWAP levels. The year ends with the Dow beating Gold for the first time in nine years (just). The USD fell 0.5% on the year (and the JPY -12.8%!!). European stocks beat US stocks (EuroStoxx50 almost doubling the Dow's performance). US Treasuries and US stocks both rallied. Financials gained 26% on the year. The Treasury curve flattened with the front-end selling off modestly and the belly rallying 10-15bps. VIX was unchanged from the start of the year at the open today - but thanks to the epic compression and steepening we have fallen back (VIX lower on the year).

 

Of course, today's epic ramp really dislocated from risk-asset reality as soon as Bonds closed...

 

Epic rampathon - to 3-day highs...

 

Basically ES has roundtripped from the open on Boxing Day - just look at the distribution...

 

Which rescued the S&P from a fate worse than death - a December in the red!!

 

Treasury Curve from 12/30/11 to 12/31/12...

 

VIX on the year...

 

US Equity Indices YTD (and AAPL)...

 

Sectors YTD...

 

Financials YTD!!

 

Asset Classes YTD - Dow beats Gold by 0.3% for first time in nine years...

 

and in FX land - the USD ended down a measly 0.5% as JPY slumped almost 13% against the USD...

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: AAPL's epic stop-run-athon today...

 

Bonus Bonus Chart: What is going on in HY credit - notably bid as Advancers far beyond Decliners relative to IG credit - very unusual pattern...

 

Bonus Bonus Bonus Chart: The S&P 500 and its JPY and EUR relationship this year - The Year of the Central Bank Ramp hand off... ECB prints into New Year (LTRO); BoJ prints into LTRO2, then market left alone - turns chaotic; ECB told to print to QE3 and OMT - market turns chaotic; BoJ steps back in to print - market ramps...


 


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Mon, 12/31/2012 - 17:14 | Link to Comment stinkhammer
stinkhammer's picture

You must bring us a shrubbery!

Mon, 12/31/2012 - 17:14 | Link to Comment akak
akak's picture

You shall go and cut the price of gold in half with .... a HERRING!

Mon, 12/31/2012 - 17:15 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

I wish the price of gold was cut in half.  I'd buy TWICE as much!!

Mon, 12/31/2012 - 17:22 | Link to Comment ball-and-chain
ball-and-chain's picture

I keep my money under the mattress.

I'm too afraid to invest.

There's no rule of law.

Global government is going to keep the lid on precious metals.

They've got too much invested in the ponzi scheme.

http://www.angrysinner.blogspot.kr/2012/12/yesterday-i-hiked-ten-miles.html

Mon, 12/31/2012 - 18:01 | Link to Comment Spider
Spider's picture

So many negative ZHers on stocks.  No deal ... but they'll pass a deal in January.  

Market is crap, but bonds are worse and money has to go somewhere.  Gold, Silver, Stocks - Only stupid people short inflation

Mon, 12/31/2012 - 18:54 | Link to Comment e2thex
e2thex's picture

<Only stupid people short inflation>

Not stupid. Ignorant.

 

Mon, 12/31/2012 - 21:04 | Link to Comment EscapeKey
EscapeKey's picture

In other words, 3% rally on basis of no deal? It should have been at least twice that.

Seriously? You take in all CNBC tell you?

Mon, 12/31/2012 - 18:22 | Link to Comment I am more equal...
I am more equal than others's picture

There is a heuristic setup going on here... anchoring - giving the masses a positive response to what is happening when in fact the opposite is quite true (tie to the lie); availability - people tend to use the latest data to make decisions (believe the lie).  The buy-in is evidenced by the all-in optimism.  What better way to make most dependent on the gobberment but by destroying the market. 

Mon, 12/31/2012 - 20:08 | Link to Comment RockyRacoon
RockyRacoon's picture

The DOW beats gold... as measured in what... dollars.  That should tell ya all ya need to know.

The ruler is broke.

Mon, 12/31/2012 - 21:10 | Link to Comment EscapeKey
EscapeKey's picture

The market trades on lies, and lies alone. For days now, we've seen sharp reversals on basis of "hope", and "hope" alone. And once this "hope" is gone, hey let's just keep the gains because we never expected the "hope" to be true in the first place.

In other words, the market was trading up on "hope" which was knowingly anything but. But that's ok. Because tomorrow's load of "hope" is better than yesterday's. ==> in other words, we trade on tomorrow's lies, and today's deceit matter little.

The Federal Reserve is backstopping everything in this market. Nothing is allowed to trade at fair price.

Mon, 12/31/2012 - 17:25 | Link to Comment Biggvs
Biggvs's picture

Whaddaya expect - it's December 31st and the tape must be painted green before the town is painted red. Reality (or some tiny fraction thereof) can wait until later this week, if ever.

Mon, 12/31/2012 - 17:38 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

@ akak!  Want to see what "Olloquito" looks like?  YOU already know about Peru, many others do not.

 

"Good Things In Peru"

http://tinyurl.com/bgv8vx2

***

And Happy New Year everyone!   

We're going to need cheer to get us through what looks like is going to be a tough year. 

 

Mon, 12/31/2012 - 18:07 | Link to Comment akak
akak's picture

Thanks DoChen, and you too!

Mon, 12/31/2012 - 17:20 | Link to Comment Texas Ginslinger
Texas Ginslinger's picture

The Dow ended up 166 on the day.

I don't see a problem with that.

BTFD..!!!!

 

Mon, 12/31/2012 - 18:31 | Link to Comment Texas Ginslinger
Texas Ginslinger's picture

If you aren't buying the dips, and selling when it comes back up, you are missing an opportunity.

Volatility rules, baby....

Mon, 12/31/2012 - 21:27 | Link to Comment Montecarlo
Montecarlo's picture

YAY - Once again physical Gold beat the S&P (recognizing that my former 401K charged fees that a stack doesn't get hit with).

All the best to everyone for a happy and healthy 2013!

Mon, 12/31/2012 - 17:13 | Link to Comment Water Is Wet
Water Is Wet's picture

Where is Boilermaker?  He must be ecstatic with all the bullishness!

Mon, 12/31/2012 - 17:13 | Link to Comment John Law Lives
John Law Lives's picture

"The year ends with the Dow beating Gold for the first time in nine years."

Maybe Kevin Henry read your article re. Gold vs. stocks and was determined to break the trend.

 

Mon, 12/31/2012 - 17:16 | Link to Comment Bastiat009
Bastiat009's picture

Take a look at the S&P or at the Nasdaq. Gold doesn't shine as much as it used to.

Mon, 12/31/2012 - 17:28 | Link to Comment GMadScientist
GMadScientist's picture

"There's a hole in the bucket, Dear Liza, Dear Liza..."

Mon, 12/31/2012 - 17:14 | Link to Comment stormsailor
stormsailor's picture

and why not, everything is so f-ing incredible.  i hope the next four years are as incredible as the last four.

Mon, 12/31/2012 - 17:25 | Link to Comment TraderTimm
TraderTimm's picture

Okay, I laughed pretty loudly at that one.

Green arrow, nicely done.

Mon, 12/31/2012 - 17:14 | Link to Comment XtraBullish
XtraBullish's picture

Shorts were completely torched today and we longs are coining it. I love the smell of barbecued shorts in the afternoon!

Mon, 12/31/2012 - 17:26 | Link to Comment Pareto
Pareto's picture

baaaahahaha  +100 for the Apocolypse Now reference.

Mon, 12/31/2012 - 18:36 | Link to Comment poor fella
poor fella's picture

You're pretty good at S&P-Ville then?  These things get boring and played out. There may not be any shorts 'getting torched'

2013: Another year of record oil, high food, jobless stagnation, political bickering, trade deficits, breached debt ceilings, survellience states, reality t.v., cronyist profiteering, bullshit statistics, and public lethargy in the face of socialized losses around the globe. 

I'll be Primo-XTRABullish after a 50% correction..  till then, it's like watching a 'Go' championship between two 6 year olds that just learned how to play. 

Mon, 12/31/2012 - 19:56 | Link to Comment RockyRacoon
RockyRacoon's picture

So you are a particularly lucky stooper who found a choice ticket amongst the discarded trash under the cheap seats.  Big deal.

Mon, 12/31/2012 - 17:17 | Link to Comment balz
balz's picture

This market is hopelessly manipulated. Complete, total, absolute bullshit.

Mon, 12/31/2012 - 17:18 | Link to Comment gmak
gmak's picture

What's your point?

Mon, 12/31/2012 - 21:03 | Link to Comment Water Is Wet
Water Is Wet's picture

Some people (maybe a lot) like to come here and post truisms and conjectures to stroke their egos with up arrows.  I thought about maintaining a list, but then I thought fuck that, I'm not going to waste my time doing that.  But here are a few off the top of my head:

The mathematics make the situation impossible / you can't cheat mathematics / etc.

When the apocalypse happens, then X which is good for me and I planned for but not all the other people who are stupid, yada yada.

War.  (As an answer to any question about what happens next)

Anything about the bond market being the "smart money" / the bond market leads / whatever market that is so big it can't be manipulated is the leader

Etc.

Mon, 12/31/2012 - 23:28 | Link to Comment Jack Napier
Jack Napier's picture

The mathematics are not impossible. Exponential debt will become impossible to pay off at some point as interest accrued alone eventually outpaces GDP, but we aren't there yet. They could cut spending in half and pay it off in a few years - but they won't. The class war mandates decrease of buying power through monetary inflation, and they need impossible debt to justify inflation to the sleeple. Since the majority needs government money to maintain their unearned quality of life they are fine with that. Bonds are smart money, until they aren't. The actual smart money is in tangible assets.

Tue, 01/01/2013 - 10:48 | Link to Comment Water Is Wet
Water Is Wet's picture

Running through your points:

1.  The mathematics is never impossible when you can print money and confiscate assets.  (confiscate via taxes or force)

2.  Meh, class war.  Look at this chart and then say inflation isn't justified; there are twice as many people on the world now compared with 1970.  http://esa.un.org/unpd/wpp/Documentation/pdf/WPP2010_Wallchart_Plots.pdf

3.  "unearned quality of life"  Who says?  This is mob rule.  They are the biggest mob and they voted themselves your stuff.  Human governance has always been mob rule.

4.  Bonds are dumb money.  Who doesn't own bonds now?  And who doesn't own $-denominated bonds?  It's got to be the most crowded trade ever.

Mon, 12/31/2012 - 17:26 | Link to Comment buzzsaw99
buzzsaw99's picture

Welcome to the party pal. [/John McClane]

Mon, 12/31/2012 - 17:48 | Link to Comment Getting Old Sucks
Getting Old Sucks's picture

plus 1,000 but I keep reading that the "market" will react to correct.  So, is there really a market anymore?  Seems it's dead and buried.

Mon, 12/31/2012 - 23:33 | Link to Comment Jack Napier
Jack Napier's picture

Sure there's a market. It may be 90% quote stuffing and pumped full of Fed money through their primary dealers, but it's alive and kicking for what it is. Take that away, and yeah.

Mon, 12/31/2012 - 18:08 | Link to Comment Absinthe Minded
Absinthe Minded's picture

No Shit. I saw the pop in silver today of almost $4 nad it looks great but it was just when I looked at it. Frickin' JPM shorts it the minute it hits $33.79. The chart looks like a meth addicts EKG. WTF is up with that?!?! These idiots are such drama queens, what a huge farce. Life will go on, until we lose currency reserve status.

On a side note, I met a fellow ZH'er today. A really nice guy I never would have suspected to read ZH. A hat tip to the doctor, I will know who to contact when the whole breakdown goes down.

Mon, 12/31/2012 - 19:58 | Link to Comment RockyRacoon
RockyRacoon's picture

Was the fellow ZHer wearing one of the spiffy pieces of clothing and you spotted it?  I wear my ZH t-shirt but so far nary a raised brow.  What kind of tattoo should I get to announce my allegiance?

Wed, 01/02/2013 - 13:07 | Link to Comment RockyRacoon
RockyRacoon's picture

I said what kind... not where.

Mon, 12/31/2012 - 17:16 | Link to Comment VonManstein
VonManstein's picture

"The year ends with the Dow beating Gold for the first time in nine years."

"Gold beat the Dow for the ninth year in a row (just)"

might want to edit that Tyler

Mon, 12/31/2012 - 17:25 | Link to Comment Pool Shark
Pool Shark's picture

 

 

Schrodinger's headline

In the universe where markets are free, Gold beats the DJIA...

 

Mon, 12/31/2012 - 17:31 | Link to Comment GMadScientist
GMadScientist's picture

"People who can't do basic calculus have estimated that..."

 

Mon, 12/31/2012 - 17:17 | Link to Comment TraderMark
TraderMark's picture

Either the Dow beat gold or the gold beat the Dow.  Clean up one sentence sir, or else this will be like a Gartman letter.

Mon, 12/31/2012 - 17:16 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

Everyone here knew this was going to happen last Friday, that we were going to have a nice last day of the year ramp job today.

Mon, 12/31/2012 - 17:17 | Link to Comment MyBrothersKeeper
MyBrothersKeeper's picture

I told you all the damn drama was just a way for them to profit.  The 2% fall off last week apparently wasn't enough so they did what I thought they would never do:  use the last day solely as a way to profit from the markets.  Now they go back and short the market for Wednesday and then go long again once they patch the "deal" piecemeal. 

Mon, 12/31/2012 - 17:18 | Link to Comment Yen Cross
Yen Cross's picture

 Confused Tyler?  • The year ends with the Dow beating Gold for the first time in nine years.

                         • Gold beat the Dow for the ninth year in a row (just).

 

Mon, 12/31/2012 - 20:15 | Link to Comment doggings
Mon, 12/31/2012 - 17:21 | Link to Comment Watts_D_Matter
Watts_D_Matter's picture

two words....Window Dressing

 

now the PM's on mutual funds will look much better after the quarter end...they get the bonuses and the fund families all slap themselves on the back touting great performance for 2012...

 

We will.see the waterfall drop early this month when the euphoria comes to a screeching halt....there was some serious Put action on the SPY today...yikes!

 

 

Mon, 12/31/2012 - 17:28 | Link to Comment Jake88
Jake88's picture

This market is so broken. When the collapse finally comes it will be of Biblical proportions. European stocks beat US stocks. The same Europe that has been in a recession... parts of which are in a depression. The same Europe that is bankrupt. If we follow suit our stock markets will soar in 2013.

Mon, 12/31/2012 - 17:31 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

"When the collapse finally comes..."   Why am I thinking  that phase will be on my tombstone.

Mon, 12/31/2012 - 17:44 | Link to Comment Getting Old Sucks
Getting Old Sucks's picture

Thanks for the chuckle, even though it's not really funny.

Mon, 12/31/2012 - 17:29 | Link to Comment JackT
JackT's picture

WTF. Everything is the same as it was isn't the power suppose to go out or something?

Mon, 12/31/2012 - 17:30 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Obviously...there ain't no can so big it cannot be kicked.

Mon, 12/31/2012 - 17:33 | Link to Comment Getting Old Sucks
Getting Old Sucks's picture

Nancy says to Obama:

We're at the debt ceiling Mr. President, and I have a suggestion.  The SSTF is part of the National Debt.  How about we take two trillion of those bonds and redeem them by issuing Treasury Bonds.  They then become excess SS proceeds.  Then we can put those proceeds into the General Fund and have two trillion to spend without raising the National Debt.  That'll show those Publicans!

Obama says to Nancy:

Great Idea, do it Nancy!

Sarcasm of course but they are insane ya know!

Mon, 12/31/2012 - 17:37 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

And that, Ladies and Gentlemen, is a wrap for 2012.

 

Enjoy the evening, dawn will still break tomorrow morn, no matter your hangover, present or not.

Mon, 12/31/2012 - 17:46 | Link to Comment John Law Lives
John Law Lives's picture

The "ramp" in perspective:

http://finance.yahoo.com/q/hp?s=%5EDJI&a=11&b=31&c=1999&d=11&e=31&f=1999...

On Dec. 31, 1999, the DJIA closed at  11,497.12

On Dec. 31, 2012, the DJIA closed at  13,104.14

That is a whopping 13.9% increase in 13 years.

Not too impressive...

FUBAR.

Mon, 12/31/2012 - 17:48 | Link to Comment busted by the b...
busted by the bailout's picture

The administration is going to relegate the debt ceiling to the dustbin of history. 

They don't need no stinkin' ceiling.  They are going to go through it and see what happens -- nothing will.  They will go through it, back and forth, a few times, while Congress is busy negotiating on the fiscal cliff, to get them used to it and to render the ceiling a moot point. 

It will become meaningless; thus Congress will no longer be able to use it to squeeze spending cuts out of the administration and so credit rating agencies will no longer have a convenient data point to base the US credit rating on.

That is what the prez meant when he said he "wasn't going to play that game anymore". 

How can Congress really do anything about the Treasury borrowing more money to pay bills Congress has already appropriated funds for and passed legislation that, in effect, ordered the Administration to spend money on?

 

 

Mon, 12/31/2012 - 17:55 | Link to Comment Getting Old Sucks
Getting Old Sucks's picture

Perhaps we should import some Egyptians or Syrians to protest?  /sarc

Mon, 12/31/2012 - 17:51 | Link to Comment MFLTucson
MFLTucson's picture

What a fuckin disgrace!

Mon, 12/31/2012 - 17:55 | Link to Comment TrustWho
TrustWho's picture

Simple, Daddy Bernanke is proud! Economic theory be damned!

Mon, 12/31/2012 - 18:19 | Link to Comment busted by the b...
busted by the bailout's picture

Yes.

Economic theory only applies in a real economy, and we don't have that.  You don't get money for nothing in a real economy, especially not 100s of billions of dollars!

The charade will last only as long as people continue to accept and hold that paper.  We will then return to a real conomy, and the return to reality will be even more painful than necessary as a result of their meddling.

Mon, 12/31/2012 - 18:02 | Link to Comment DavidC
DavidC's picture

Is it safe to say the stock markets are manipulated?

DavidC

Mon, 12/31/2012 - 18:18 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

I've heard it's all to do with BoA employees and ebaby traders reading some kind of underground blog, they say the owner was once a Goldman Sachs man, once he even shorted silver...

Mon, 12/31/2012 - 18:19 | Link to Comment JenkinsLane
JenkinsLane's picture

Yes, I think you can say that.

Mon, 12/31/2012 - 18:31 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

And for those keeping score, Apple finished up 31.4% YTD, Google finished up 9.52% YTD.  So Reggie's number one pick was beaten over 200% by Apple, who he and ZH could not stop bashing.

Once again, I fucking told you so.

Mon, 12/31/2012 - 18:59 | Link to Comment AndrewJackson
AndrewJackson's picture

This casino is a fucking joke. Whats hilarious is when you tryto explain to friends and family what is going on. They all look at me like I am crazy when I try to explain ben bernanke, zirp, qe infinite, and the consequences of these actions on risk behavior/asset prices. Oh well...off to the golden bunker for another year.  

Mon, 12/31/2012 - 19:02 | Link to Comment razorthin
razorthin's picture

The PTB in their manipulative smack down of PMs have only created a very lenghthy consolidation...a launching pad.

Mon, 12/31/2012 - 19:35 | Link to Comment orangegeek
Mon, 12/31/2012 - 20:00 | Link to Comment MFLTucson
MFLTucson's picture

The year ends with the Dow beating Gold for the first time in nine years (just)

Another perfectly executed fraud by the master of deceit!  He lied to his gangster friends   to get the market over 13,000 and the people took the bait once again. Fools!!

Mon, 12/31/2012 - 20:32 | Link to Comment lifetide
lifetide's picture

I know this deal is a whore.. but she's a fun whore.

 

Mon, 12/31/2012 - 20:40 | Link to Comment GMadScientist
GMadScientist's picture

A narcolept that passes out before you have to pay her.

Mon, 12/31/2012 - 20:32 | Link to Comment lasvegaspersona
lasvegaspersona's picture

Fofoa makes an interesting observation about gold: the ECB will not close its books on gold until Jan 4. That will be the close they will use for their Mark to Market for the gold they hold/control. They will publish it and will be looking at the POG in Euros. He actually goes on with other thoughts but that Jan 4 date may be more important than the 12/31 date....for them at leasr.

Tue, 01/01/2013 - 10:56 | Link to Comment Water Is Wet
Water Is Wet's picture

FOFOA is surely alluring.  But the appeal of his writing has to do with the reader wanting to believe what he is saying is true, that gold will make the reader rich.  It's like believing in God, or that feeling like your lottery ticket is surely the winning lottery ticket.

Mon, 12/31/2012 - 21:12 | Link to Comment AgAu_man
AgAu_man's picture

Regarding the Gold vs. S&P...  Tyler, have you aver heard of "let sleeping dogs lie?".  I bet a friend earlier today, that your posting (www.zerohedge.com/news/2012-12-31/will-gold-make-it-9-out-9) would provoke the Elite and their ilk (maybe even Warren Buffe), just to "put the Gold 'Buggers' in their place".  Sure enough... S+P up, Gold down.  I won a $20.  Would have rather lost the bet, but it paid for my lunch & drinks.  Better luck/wit next year.

Tue, 01/01/2013 - 14:58 | Link to Comment absente reo
absente reo's picture

What are you talking about?  Gold was up on 31/12/2012.

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