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Phrase Of The Day: "Irrational Divergences"
Deja Deja... oh forget it. S&P failed to make its all-time highs. We dipped (on heavy volume) and wiggled all the way back on no volume in stocks. Healthcare and Utilities lead the week but high-beta momo-monkeys chased homebuilders on the day. Wherever you looked today - apart from stocks - risk assets were being sold. VIX is higher on the day (and 2.5 vols disconnected from stocks); high-yield and investment-grade credit markets are ending near their worst level of the week - suggesting the S&P is 20 points rich; Treasuries ended off their low yields but stil down 7bps on the week and notably more post-Cyprus (with stocks in the green post Cyprus). The USD strengthened further during the EU session and flatlined in the US afternoon (with EURJPY leading the way down and not supportive at all of the equity rally). Apple lost its 50DMA again, dropping 2.2%. Equity volume was extremely low (cash and futures) and average trade size the lowest of the year. The phrase of the day is - irrational divergence.
Divergence #1 - Longer-term - Stocks from Macro Data and Macro Risk
Divergence #2: Stocks From Credit...
Divergence #3 - Stocks From VIX (protection)...
Divergence #4 and Divergence #5 - Stocks From Bonds... and Stocks From FX Carry
So what is 'helping' stocks... well it appears when everything else fails - lever WTI!!
Because with average trade size at the lows of the year in S&P 500 futures...
...this seems all about algos keeping us green for quarter-end dressing cover - because market breadth was not following at all...
Gold and Silver recovered from an early spike lower.
And the Greatest CONVERGENCE of all... S&P 500 in 2012 and the S&P 500 in 2013... come on!!!
Charts: Bloomberg
Bonus Chart: The Nikkei 225 (in USD)...
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Don't think past this; "85 billion per month, indefinitely"- Ben Bernanke. Roll the motherfucking guillotines already.
I can't wait to see the Bernank put out to pasture.
I'd prefer;under a pasture ,myself.
Behold, the power of Ben
The CONTEXT model hit -20. Hmmm, stretched like a rubber band.
It's more fun if you stake him out ON the pasture ...
Then you can listen to him scream while the vultures, coyotes and insects eat him alive.
after he had his last laugh telling the American nation that all their gold was sold to the Chinese and the Chinese now own the Capital Hill Peking Palace...
We'll all hate the next Fed head as much or more than Bernanke.
what the hell are you on about. Ben bernanke is just taking orders from the evil elitists at the top.
No need to scream at him, its the elitists you are after, not him. The trouble is you will never find these creatons, they are underground preparing for their financial crisis 2.0
Silver dimes bitchez.
Toll Booth in Blazing Saddles - YouTube
LOL. Shitloads of silver dimes is a good thing.-)
"The insanity will continue until morale improves." - Ben "The Madman" Bernanke
"Markets can remain irrational longer than you can remain solvent." - John Maynard Keynes
;->
... and one of these days Ben "The Madman" Bernanke is going to discover this is true for Central Banks.
My $ 0.02 is it happens when regardless of the POMO, algos et al ...the markets go bidless long enough to trigger every algo's "Super Double Secret Probation" SELL !!!! order
New all time highs tomorrow afternoon with negative volume!
The Great Slam is coming soon, This has been quite the long-term set-up.
Negative volume? All transactions from the past week are cancelled! Jubilee!
It isn't manipulation. It's synthetic momentum.
Give the Fed a gold star, they did really well coloring inside the lines on that last chart.
(This "market" is a total fucking joke.)
http://www.economicnoise.com/2013/02/27/founded-by-geniuses-and-run-by-i...
If you are caught with a plant then sent to prison because they say you are destroying MERIKA you might live in a country founded by geniuses but run by idiots.
If Bradley Manning can rot in a jail cell for exposing the truth, yet Jamie Dimon can lie and obfuscate to Congress while reaping millions in remuneration, you might live in a country founded by geniuses but run by idiots.
Few more weeks, just few more weeks.
The setup seems to be ready
Gonna be one hell of a 3rd Quarter!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
http://news.asiaone.com/News/AsiaOne%2BNews/Business/Story/A1Story20130320-410025.html
The rise of inflation, the overvaluation of bonds, the relative value of equities, especially in emerging markets, and Japan's turnaround were among the major themes of the Schroders Asia Media Conference held in Hanoi last week.
Perhaps Christopher Wyke, the firm's product manager for emerging market debt and commodities, summed up the investment thesis best.
Thirty countries in the world today are in zero or negative real interest rates environment. That's a record. Central banks are busy printing money.
The policy priority is higher inflation.
US Federal Reserve chairman Ben Bernanke has adopted a very tough employment target before he would consider turning off the tap of liquidity and start to raise interest rates.
And there is a long way for the US employment rate to go before that target is met.
Meanwhile, to tackle the government budget deficit, either taxes have to be raised significantly or spending cut sharply. The easier way is to inflate their way out. This strategy is being adopted in the EU and Japan as well.
Inflationary policies are popular: People will vote for inflation over recession. They like to see the price of their assets rise.
To Mr Wyke, there are three types of inflation: commodities inflation; wage inflation, as seen in China, the world's factory; and government inflation, through the debasing of their currencies. Emerging markets are particularly vulnerable to the former two.
He said: "The idea spread by the West, that there is no inflation, and so the right policy is to cut interest rate is simply not true! Particularly in many of the countries in the world where the bulk of the global population lives."
When inflation goes up, interest rates rise, bond prices fall and currencies rise.
Commodities and equities will benefit. According to Mr Wyke, some 50 per cent of the total global financial market assets are held in bonds.
In the last few years, a lot of money has poured into emerging-market bonds, their prices have gone up, and hence their yields at historical lows. "The upside of holding bonds is so limited, the downside is so huge that the opportunity cost of giving up bonds now is so small" is how he put it. "Fortunes are made of profits taken too soon."
There is a severe danger of a big sell-off in bonds across the markets. At the moment, people are taking more and more capital risk in order to get yields. "That's very dangerous. What matters is total return," he said.
GS, JPM, BAC running the fuck out of their market levitation algos lately, selling big into the spikes.
KRUGMAN!!!!! WTF IS UP WITH ALL THIS DIVERGENCE?????
Don't look down...
Housing stocks did well because the sales of homes declined more than expected. CNBS said that sales declined because there wasn't enough supply to meet the needs of buyers. Which is bullish for the housing sector.
YES WITH 13+ MILLION VACANT HOMES, THERE ISN'T ENOUGH SUPPLY!!!!!!!!
Only new home construction can fill this void they say.
JESUS FUCKING CHRIST WHAT PLANET AM I ON!!!!!!!
When you call someone irrational, at least you can see the rational point of view. This isn't irrational, it is beyond insanity.
Those 13 million vacant homes aren't in the right location.
The new homes are mobile homes :D
These divergences are totally rational. The rich are getting richer by buying stocks of corporations. Why are they buying stocks? Because Corporations in turn are feasting on the Proles! Profits for corporations are great if you fire em and outsource, cut their benefits and wages, cut your product sizes while increasing prices, consolidate industries into pseudomonopolies, and pay little or no taxes. Stock market is NOT an indica of economy's health but of the success of corporate greed!
Who let Dennis Kucinich in here?
This is what they mean when they say>>>>>>>> DO NOT FIGHT THE FED....any questions?
Eventually the markets beat the Fed - for short periods anyway. And when it does like late 2008-2009- the market is crushed.
-85 billion per month QE, Check.
-Divergence of equities from all other asset classes, Check.
-Headlines screaming to the sheeple, All time S&P and Dow highs and that every is Okay, Priceless.
Volume is bearish for 5 reasons
http://www.dowtheoryinvestment.com/2013/03/dow-theory-update-for-march-5.html
Yesterday's volume readings and a new high by the industrials not confirmed by other indices, confirm that the odds for a correction are increasing:
http://www.dowtheoryinvestment.com/2013/03/dow-theory-update-for-march-2...
yes something is happening in the market right now.
==> THE US DOLLAR JUST POPPED OUT OF A PENNANT - see here
right now the BONDS ARE UP, THE US DOLLAR IS UP, THE MARKET IS UP....... what the???? one of these is wrong and my guess is it is the market.
Time will tell. The market breadth for S&P is on a sell as we speak. It just flipped, so next few days will be interesting especially with the cyprus bank opening.