• Knave Dave
    05/23/2016 - 18:16
    This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve...

POMO Pump Rescues Stocks Again But Risk-Assets Fade

Tyler Durden's picture




 

In the old days, it was Fed via POMO to stocks; but given the new normal, now we have levered POMO to rescue us via vol compression and yet again - today saw risk-assets sliding all night (though admittedly only around 0.5% off highs) only to be rescued by a vol-compressing equity push that started the moment POMO finished. HY credit was tinkered with in the last hour to keep things afloat and of course AAPL soared into its earnings report. The debt-ceiling vote did little to maintain risk-on as CAD weakness (BoC holding off from rate hikes) pulled the USD higher, and hurt risk-on commodities - as Oil plunged on the day. Treasury yields continued to fall - entirely ignoring stocks once again - even though stocks caught down to risk early and ended at new five-year highs on the Dow (thanks almost entirely to IBM). So low volume in stocks (AAPL decent volume), low average trade size in S&P futures, and a disconnected equity market from bonds and FX once again... eyes down for an Apple full-house...

Correlations between stocks and risk assets broke once again as POMO finished...

 

and after AAPL reported... Stocks collapsed back to Bond and FX reality!!!

 

CAD weakness pilled the USD up (and via its carry impact the rest of the FX complex)...

 

Commodities shifted on the CAD impact on the USD and on the debt-ceiling vote...

 

The disconnect remains...

 

and across asset classes - stocks are now negativelycorrelated to risk (lower right) - ETFs realigned (with VXX balancing HYG weakness). With USD up and Tresasury yields down, the upper right chart shows the widening disconnect once again this afternoon...

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: Dow Transports having best year since crisis...

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Wed, 01/23/2013 - 17:18 | 3180583 michiganmaven
michiganmaven's picture

What do ya know... another day and another Fed rally... imagine that !

Wed, 01/23/2013 - 17:32 | 3180625 Rainman
Rainman's picture

...more .gov debt spending for 3 months !....yiiippppeee

Wed, 01/23/2013 - 18:35 | 3180857 Groundhog Day
Groundhog Day's picture

Dear Tylers,

You are a beacon of light in the darkness.....but when the fuck does this shit end already....i'm starting to think the can rig this shit into to perpetuaity

Wed, 01/23/2013 - 17:22 | 3180595 Let them all fail
Let them all fail's picture

Is it just me or are the commenters on this site becoming less interested in finance and more angry, biggotted, racist and dumb? There used to be actual informative and thoughtful posts in the comments sections about financial markets and related matters, rather than people just throwing out stupid insults. I have been reading this site for over four years and find it to be a shame. Still good content from Tyler but more and more annoyed at the lack of thought in the comments section. Look at Naked Capitalism, for example, where the commenters have informed discussions about the posts, its refreshing to see that over there.

Anyone else feel this way to or is it just me?

Wed, 01/23/2013 - 17:26 | 3180606 Xibalba
Xibalba's picture

All the 'smart' people got blown out by a reckless FED.  Drunken 26 year old's with a series 7 rule the world now. 

Wed, 01/23/2013 - 17:29 | 3180610 TraderTimm
TraderTimm's picture

Let them all fail - Yeah, if isn't Trav suggesting that everyone with dark skin is the problem, you get the "J00" baiters and everyone else.

I've only been reading here for over two years, but it has gone downhill. I miss some of the older commenters.

 

Wed, 01/23/2013 - 17:37 | 3180651 Rainman
Rainman's picture

yeah, I miss Chumbawamba too

Wed, 01/23/2013 - 19:20 | 3180965 Pure Evil
Pure Evil's picture

For someone that has been reading for four years, you seem to be rather ignorant on the comments posted back then. I suggest you go back to the start and you'll see that nothing has changed. About the only thing I have noticed that has changed is that less people seem to get in one on one shouting matches with each other. Although, LTER still likes to go one on one with a few commentors. Every once in awhile someone will say something stupid and a group of commenters will gang up on that person, but not so much of late.

And, what happened to the idea of Fight Club where people come on, let the ideas fly, along with the fists? Has ZH mellowed out? People smoking too much mary jane? People on this website used to really duke it out and you don't remember any of that?

By the way, I don't remember too many people making intelligent comments about the articles way back four years ago. If you did, then you got waylaid by some arrogant punk that was trying to build a rep by beating you down.

And, by the way, I'm here for the finance articles, and I like the comments the way they are. They give a cross cut of ideas. Some I like, some I find abhorent. That's the way life is.

Wed, 01/23/2013 - 21:18 | 3181398 ShankyS
ShankyS's picture

I miss Marla. (esp the Friday night sessions)

Wed, 01/23/2013 - 17:30 | 3180619 NotApplicable
NotApplicable's picture

Typical idiots notwithstanding, I'd say the dumb posts here are the ones that still promote the idea that there are any financial markets remaining. If you want informed discussions about fairy tales, well go hang out with the kiddies over at NC. ZH is the place we go to witness the crime in progress.

Didn't you get the Corzine memo?

Wed, 01/23/2013 - 18:22 | 3180819 Freddie
Freddie's picture

LOL! You can also go to Seeking Alpha with old guys and 24 years old who are unemployed and who are trying to gain a following on SA as an investing "guru.".

They post endless BS analysis articles about How Apple is Going to $700 or How You Can Invest Like Buffett.  They fail to mention that you need to be a govt crony facist billionaire and friends with O or how Buffett has not beaten the S&P 500 in years.  

They also post shit about what Cramer said today.  Sheer idiocy.  The idiots on Seeking Alpha also think we still have financial markets.  Sheep.

Wed, 01/23/2013 - 19:14 | 3180996 Pure Evil
Pure Evil's picture

They also have censorship on those websites, where on ZH they believe firmly in the First Admendment not matter how stupid, inane, or retaded the comment.

Don't believe me check out their manifesto:

ZH manifesto

this a cut and paste:

"anonymity is a shield from the tyranny of the majority. it thus exemplifies the purpose behind the bill of rights, and of the first amendment in particular: to protect unpopular individuals from retaliation-- and their ideas from suppression-- at the hand of an intolerant society."

I would suggest that you are part of the intolerant society, but of course that would offend your sensibilites.

Wed, 01/23/2013 - 17:33 | 3180627 natronic
natronic's picture

I think your just seeing a natural reaction to unnatural events.  

Wed, 01/23/2013 - 17:35 | 3180635 LawsofPhysics
LawsofPhysics's picture

I view this site as a trading site.  Traders use to rely on fundamentals.  With the Fed propping up markets I can see why a site, whose content is mostly from econ professors in ivory towers, would have a considerably happier tone.  hey, everybody's has their agenda and likes to talk the "book".  Some things just never change.  The supply lines will break just the same, history is pretty clear on this and as always timing is everything.  Just my two cents.

Wed, 01/23/2013 - 17:36 | 3180648 Joe moneybags
Joe moneybags's picture

LTAF, I pretty much agree that most of the comments are emotional rants, and not informative or illustrative.  But one big problem is the lack of ability to post graphs, pictures, or other info.  I hate chasing links.  Many times I had a graphic that would present some facts and analysis in an entertaining, or meaningful way.  But just saying "housing shows signs of recovery" or "world stock indexes are all above their moving averages" draws jeers from the skeptics, where a graphic could at least ad some substance, and help keep the discussion more focused on facts.

Wed, 01/23/2013 - 19:16 | 3181013 Pure Evil
Pure Evil's picture

Just because you know how to draw a graph doesn't mean your opinion is correct.

Wed, 01/23/2013 - 17:53 | 3180713 fonzannoon
fonzannoon's picture

I think the market based people on here have concluded they are watching a rigged casino. Anger has transformed into boredom and apathy. Bored conversation usually goes off the rails.

Wed, 01/23/2013 - 18:16 | 3180803 Freddie
Freddie's picture

+10

Yup.  We are sick of the disgusting rigged casino, the crooked pit bosses running it and the evil ****s destroying this country.

Wed, 01/23/2013 - 19:59 | 3181183 Just Ice
Just Ice's picture

Markets have always been to some extent rigged or unduly influenced, imo...just not to current extreme and detriment (e.g., total disconnect from economy or fundamentals should be linked to, failure to discipline, broken pricing discovery, etc.).  Guess the in person market makers of old knew how to have some class in tape painting.

Wed, 01/23/2013 - 18:08 | 3180770 Freddie
Freddie's picture

Anyone else feel this way to or is it just me?

It is just you so go fu*k off!

Wed, 01/23/2013 - 19:50 | 3181157 Just Ice
Just Ice's picture

I suspect commentary discussing market or trading ideas and analysis has been dissuaded by junks and derisive remarks to effect "there are no markets" or that trading is "useless" paper pushing. That's unfortunate as I too enjoy that part when have chance to peruse the site's comments.

I have a monthly chart target on the Aussie dollar at 110 and the Euro may well go into upper 130's as some here seem to think as they often move together.  If so, I suspect those moves will be more on the back of resumed yen weakness than dollar weakness although the dollar does have a cycle low due in April.  I'm expecting the dollar index to test 100 at some point next couple years.

I think copper and crude (wti) probably both rolled over today.  Watching for new entry point for shorts in sugar...still have downside targets of 17.62 and 13.95 in that market and was stopped out of fat short position Fri before last when it blipped back over 19.

HFT algos are extremely annoying in trying to get desired entries.  In avoidance of some of the frenetic activity they seem to generate, I look more toward weekly charts for analysis...seems to smooth out some of the b.s. occurring on dailies and intradays.

 

    

Wed, 01/23/2013 - 21:16 | 3181393 ShankyS
ShankyS's picture

Comments have changed and are not the brainy discussions that used to take TD's post above and beyond into areas noobs should never tread. I learned a lot from those discussions though. Comments now are rather witty and entertaining with a dash of insight thrown in here and there on top of worlds of /sarc, so do't beat em up too bad. 

Wed, 01/23/2013 - 17:23 | 3180598 SmoothCoolSmoke
SmoothCoolSmoke's picture

NFLX BS earnings.  WTF?

Wed, 01/23/2013 - 17:54 | 3180719 847328_3527
847328_3527's picture

Hard to belive they will survive let alone pop up. I cancelled when the sound was out of synch too many times and the stream flow repeatedly stopped. I reported it to them via phone and email but nothing was done so screw 'm.

Wed, 01/23/2013 - 17:30 | 3180614 yogibear
yogibear's picture

Fed creating all sorts of bubbles.

When trillions of dollars come flooding into the US and crashing the dollar there isn't much the fed can do.

It cannot raise rates. It will have to let the US dollar crash.

Wed, 01/23/2013 - 17:34 | 3180623 spankfish
spankfish's picture

Hey Tyler's I understand why they call it Permanent Open Market Operations, but why not just call it what it is?  Kicked in the balls and fucked in the ass.  Just sayin'.

Wed, 01/23/2013 - 17:44 | 3180680 Joe moneybags
Joe moneybags's picture

Only the bears are kicked in the groin, and violated Greek-style by the Fed's actions.  The PM bulls are doin' just fine.

Wed, 01/23/2013 - 18:37 | 3180864 lasvegaspersona
lasvegaspersona's picture

spankfish

EVERONE knows....the IRS has copyrighted and patented that name and technique

Wed, 01/23/2013 - 17:42 | 3180665 Kreditanstalt
Kreditanstalt's picture

The "dash-for-trash" is back??

Wed, 01/23/2013 - 18:30 | 3180845 lasvegaspersona
lasvegaspersona's picture

How does the 'stock market' work again?

Wed, 01/23/2013 - 18:53 | 3180920 hannah
hannah's picture

 the problem is no ones cares anymore because the market just goes up, the fed prints at will and nothing seems to change the situation. reality is shit. wallstreet is untouchable. we have pure scum politicians in charge and everyone here knows they are about to get the biggest ass raping in history and no amount of prepping will solve anything.

 

the world is fucked...

Wed, 01/23/2013 - 19:18 | 3181024 Billy Shears
Billy Shears's picture

Amen,  brother!

Wed, 01/23/2013 - 19:12 | 3180986 Nid
Wed, 01/23/2013 - 20:35 | 3181296 q99x2
q99x2's picture

Great presentation.

MoPo Rump this. Where's my tranny

Thu, 01/24/2013 - 01:45 | 3181893 Grand Supercycle
Grand Supercycle's picture

Wile E Coyote sell off awaits...

As mentioned – central bank intervention prolongs and postpones but can not oppose natural market forces indefinitely.

http://trader618.com

Do NOT follow this link or you will be banned from the site!