Four Charts To Panic The "Money On The Sidelines" Hopers

Tyler Durden's picture

If yesterday's indications of the near-record overweight net long positioning in Russell 2000 Futures & incredible net short VIX futures positioning, along with the extreme flows contrarian indication was not enough to concern investors that the 'money' is in, then the following four charts should cross the tipping point. Citi's Panic/Euphoria guage for US stocks has only been more euphoric on two occasions - Q4 2000 & 2008; Goldman's S&P 500 positioning has only been this extremely long-biased on two occasions - Q4 2008 & Q2 2011; and Barclays' credit-equity divergence has only been this over-bought stocks on two occasions - Q4 2008 & Q2 2012. It doesn't take a PhD to comprehend the extent of excess priced into stocks currently - no matter what Maria B tries to tell us.

Citi's Panic/Euphoria Model indicates extreme 'euphoria' - which has led to significant equity market losses in the past...


Goldman's S&P 500 Positioning has only been this extreme long twice before - and both were followed by dramatic sell-offs....


and Barclays points out what we have discussed, that stocks (and implied vols) are dramatically over-priced relative to Investment grade credit...


and high-yield credit...

via Barclays,

At the index level, the drop in equity volatility over the course of the last month has resulted in credit spreads in the US appearing too wide relative to SPX weighted average implied volatility. While we have been highlighting this for the HY index over the last couple of months, the cheapness of credit relative to equity implied volatility is now a feature even in the case of the IG index.

Whether the smart money is all-in ready to unwind to the dumb money is unclear but one thing is clear - the US equity market is as levered long and over its skis as it has ever been - trade accordingly...


Source: Goldman Sachs, Citi, and Barclays

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Mongo's picture

The coming collapse will send us back to the stone age

Dr. Engali's picture

Hopefully not that far back.

TheSilverJournal's picture

There's no way I would bet on anything falling faster than the dollar. Not saying that markets won't sell off here, but I wouldn't bet on it. If it does sell of it will be short lived as the Fed will rush in to increase QE. It's much more likely that there's a massive rally in real terms and a devastating crash in nominal terms.

Fortunate Fool's picture

Hey Tyler, can you please write more about the french "disastrous" campaign in Mali? (from your previous article: "Last week we reported that in the aftermath of the so far disastrous French campaign to eradicate "rebels" in the north of Mali"


Folks, this is what disastrous look like:

"Timbuktu Gives France’s President an Ecstatic Welcome"



TotalCarp's picture

You are a total fool though. Do you remember russkis marching truimphantly into afganistan? More recently americans swooping in to there and baghdad? Remember happy iraqis shitting on hussein statue? That ended fast did it?

It hillarious how hollande is doing his version of "mission accomplished" and how stupid trolls like you fall for it.

So folks, lets judge in another year or two.. If french have any brains they will dump it on african alliance and run!

Thomas's picture

I'm kinda hoping to stop at least at the dark ages. Stone age would suck. 

Fox-Scully's picture

Stone age would be better ay least you do not have to put up with the crazy religious demigods.

ACP's picture

At least that won't be as bad as living in Detroit.

Sudden Debt's picture

Yep, you'll always have Miami...

A whopping 364,000 properties in the Miami area have entered the foreclosure process since 2008, according to RealtyTrac. The number of foreclosure filings slowed in Miami and across the country last year, but the housing market is far from a comeback.

jim249's picture

That is because the banks stopped forclosures. Millions of people are still living in their uh bank owned homes rent free.

daneskold's picture

Re'fied my house in Jan 2007.

I didn't make payments to Countrywide/BofA for three years, and Chase on the 2d for the same period.

I sued to stop foreclosure b/c the sigs on the substitution of trustee and notice of default were obviously forged and faulty.  (Coincidence...the lawyer for BofA...his wife was raised in my house.)

Settled with bank two years ago.  Waited for bank to come take possession...but it didn't.

Then, nine months ago, BofA threatened to foreclose again.  Then sent a aletter saying, help us shortsell it, and we'll pay you $5k to $3k at closing.


Just closed two days ago.  BofA ate $400k+.  No deficiency.  Chase ate $175k+.  No deficiency.  Buyer paid $40k in junior liens.


And I walked from closing with $5k.


Dumped $600k in unsecured debt and walked away with money in pocket.


A reverse bankruptcy.


This was a ridiculous outcome.  Amoral.


But, I took it happily.

Never One Roach's picture

Not bad considering the national Shadow Inventory is somewhere about 13,000,000.

Lama's picture

ZH is dope for bears. It's designed to sucker in the shorts. Good luck.

Popo's picture

Except most ZH'ers stopped trading years ago when they realized that retail investors were the fool in the market.

Yen Cross's picture

 $ ISN'T ON THE SIDELINES.   Tyler, money is running scared for the next .1% of return on ZIRP.

  Ass wipe fiat is in vogue/

ekm's picture

We were talking about it about 1 hr ago and baaaaam, ZH obliges.

Yen Cross's picture

 We were. Gotta love Z/H!

francis_sawyer's picture

The IDIOCRACY is to believe that there's MONEY ON THE SIDELINES... Run [as fast as you can] AWAY from anyone that ever tries 2 sell you that line...

Yen Cross's picture

 The  Fallacy, [is that money is on the sidelines,] While corporate buybacks, and consolidation > equal higher earnings.

  Top line revenue is shrinking, and 60% OF "TOP LINE"  Revenue is from [ over seas] earnings, with most large Cap " US Names".

  That $85 b the Fed. is injecting every Month, is going straight to the emerging markets. Look at the Shanghai exchange/

     Hong Kong and Singapore are so flush with "funny money" they are exploring "negative interest" policies.

   The Fed. is pumping money into TBTF, and killing the economy !  

  Bernanke should be SKULL FUCKED!

ekm's picture

Do you know why that 85b is going to shanghai etc?


What is the route of the flow of money?

Yen Cross's picture

 That flow of "ponzi capital" will flow directly into the United States treasury, as intrest paid on medium term notes, there -by lowering rates on the long end of the curve.

TotalCarp's picture

Yen i am not sure that is right.. Fed been printing for 4 years now but shanghai comp been sinking like a rock up until nov 2012. So thing is i cant figure out if the charts in this post have real relevance when money gets printed out of thin air and distributed to banks on an almost daily basis.

Thomas's picture

The absurdity is the notion that money somehow flows into and out of stocks.

trebuchet's picture

haha isnt margining and notional loan backed "assets" money as well.....?

Randall Cabot's picture

You mean Bill Gross? He says money going into stocks is coming from cash and Money Markets-not bonds. Then Maria asks him when he's boning up on bonds LOL at 5:00:

Joe moneybags's picture

Those four charts may or may not "panic the hopers", but they sure confused this bear.

trebuchet's picture

No confusion to short like F*CK 

or to pair trade the 2 sigma HY/IG rack

Freddie's picture

But the shorts have been getting toasted by the Fed money printing QE infinity.  Any ideas when this will break?  The charts on things like the S&P500 and RUT are absurd.

nightshiftsucks's picture

Great the sheep have payed off their credit cards, now what ? Are they suppose to go out and charge them up again ?

Cognitive Dissonance's picture

Those charts look "Good enough for government work". - Goldman

John Law Lives's picture

Perhaps the tell-tale sign of an impending top is when the talking heads talk the loudest as if stocks will never go down again (e.g. some loudmouth claiming the Fed should buy another $30 Trillion in assets to help eradicate the national debt...).

FUBAR to the max.

chubbyjjfong's picture

Agreed. Iv never heard so much "to infinity and beyond" speak as what I'm getting force fed at present.  I am just astonished that people don't see the wood from the trees.  I really do feel at times that I am actually the nutty one. That the people that I talk to, who back away from me when I talk of the real state of the economy and the outright theft that is happening right under their noses, think that I'm some kind of doom freak.  They honestly look at me like I'm a lunatic fringe.  I have given up trying to join any discussion about it.  I really do feel the odd one out.  ZH is the only place that seems to make any kind of sense right now.

A report from a Spicers 'financial expert' today advising people to pour all their money into the US stock market as its about to boom!?  Seriously WTF.  It just seems lately that things are beginning to esculate.  in light of the economic shit hole we are in right now, this europhic talk is evidence we are in for one hell of reality check sooner rather than later.  

All_Is_Well's picture

Chubby....Only try to realize the truth....There is no spoon....

Ham-bone's picture

There is a national desperation...everybody wants to win the lottery and get rich without the trouble of "working for it" folks talking bout DOW riches and the like are welcomed as messiahs.  And markets will nominally continue to lift so long as QE4EVER continues...but casualties will be heavy.

klockwerks's picture

Common sense and stay up on your reading. Bottom line is, it is going down but not sure about timing but I think sooner than later. When big brother starts planning how they are going to take your 401K and your guns at the same time along with telling you it's 14000 and  to the moon, it smells really bad. I have but 1 friend that understands what is going on and when you do bring it up to others, your crazy

Freddie's picture

Tv and Hollywood make people brainwashed retards.  You watch it - you empower the scum.  The public lives in TV alternative reality.  It is ****ing mind control of idiots. Plenty of idiots here watch TV like tards especailly the old baby boomers. 

Lord Koos's picture

In case you haven't heard this in the last 24 hours or so... you're a moran.

Element's picture

Buy at the top and sell at the bottom ... makes sense. Just listen to MSM financial commentaries. The same jokers who, like all the economisseds during Sept 2008 were suddenly revealed to have zero clue whatsoever about how markets or economies actually work. The naughty economy went off-script on them.

I can see why many people turn into misanthropes. It's not because they actually hate or distrust people, its more a function of realizing the vast majority of people are insane retards that are beyond any possibility of redemption, but see fit to wallow in extreme dumbness, so why try to get people to snap out of it? The truth is they can only snap out of it themselves, usually in flailing desperation at some grave inevitable system-induced personal crisis-point.

Thus humanity has no basis to shine genuinely in the way it can. Instead we have this nonsense of shit-eating suckers and fools ignorantly behaving like the state-politico-economic-market-system is worth a damn or worthy of support, commitment and affinity, until it becomes undeniable that it is a monstrously corrupt abomination and all those serving it's process are corrupted to the same common extent, and if that were not so, then they simply wouldn't "fit-in", any more, and would then have to de-program from this hive-mind MSM driven cult-of-belief-in-lies, and thus necessarily re-think, reprocess and relearn what real is.

Which would be a very good and healthy thing. But unfortunately this also appears utterly and completely barking-madness, as well as extremely scarey and not for the faint-of-heart, usually inducing a psychological fight-or-flight response. Hence they almost always swerve away from facing the actual situation they're in.

And so it is; the dog returns to its vomit.

Freddie's picture

Anybody here remember 1998-1999?   You would go out to lunch and CNBC would be on everywhere.  Sub shops, lower cost casual places, McDonalds.   You could not hold a conversation with anyone because they were watching the market.  This was not on Wall Street or a big city either and these were avg people.  CNBC hying .dot bomb stocks including investment banks trading back and forth with each other on the IPO day to make a $150 stock.  Corzine and Goldman were doing it as well as all the other investment banks,

I loathe CNBC and ALL of TV.  Lying propagandists.

bobthehorse's picture

I've got your money on the sidelines.

I've got it hanging between my legs.

Give up your hopes and dreams.

We're fucked.

Taint Boil's picture



I just got out  ....... so it should double soon.

Ham-bone's picture

FRED data shows massive "flow" of "new money" is underway (no suprise now that Op Twist is over and full QE is back)...and with no end in sight (no clear "new money" finish line to be front run ala QE1, 2, op twist)...piggies are lined up at the teat.  FUCKING A...yes it's different this time.  Sociopaths are all in now...There is no backing off now from $85b a month and it will need to go higher as $85b is the "new norm"..."progress" will require more "new money"

Fucking A Tylers - They don't need money from the sidelines anymore, PD's  buys a T on 9x leverage, Fed buys it back and credits acct in full, loan is paid and now there's more money...they make the shit up, banks leverage it up and voila...more money to chase prices up every fucking day without retail or any other quaint group moving in...only places we've seen this before are Germany, Zimbabwe, etc.  Once pensions, insurance, retail, et al do come in to go along for the ride w/ all the leveraged big boys...that is when we go Dow 25000 or some such awe inspiring #...We are they but this time we are taking everybody to the moon and back with us.  So long as QE4EVER continues then stock market goes up.  Tell me when/if Fed stops or slows down and I'll tell you where the top is.

CDNX fan's picture

This market is going to go more parabolic than 1998-2000 NASDAQ is the Zimbabwe-rally and I predict that within one year, the U.S.S Nimitz will be gassing up in Gibraltar and trying to buy potatoes and the credit card will be refused. The Republic will be called "Wiemar" replacing "United States" and JP Morgan will be in charge of the new global currency that will replace the USD as the New World Reserve Currency which will contain zero gold or silver.


This clip reveals how the elites have brainwashed everyone.

Mi Naem's picture

I actually think we have a correction first, 10 - 20%.  Then retail money be convinced that this is now a good time to buy. 

razorthin's picture

You are not participating and it's killing you.  They've got you second guessing yourself.  What if it really IS different this time, and I'm left eating their dust?  What if I wake up Monday morning and the dollar has crashed, the Dow is 25,000 and gold is $20,000??  What if?  What it?

This is when you know it is mania.  Let the lemmings run without you.

css1971's picture

AAPL to $1000. It's a sure thing, you can't lose! The government are going to madate iPads in schools!

Yeah right, the market is always wrong. Buy low, buy what nobody wants. That's a bit of a challenge at the moment, everything is high, maybe it's cash that nobody wants any more. EUR? USD? USD, the EUR looks like it's going to 1.4 before turning round.