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S&P Hits New All-Time Highs With Oil's Biggest Spike In Six Months
Another POMO, another dip bought, another all-time high in the S&P 500 but we are sure there is some disappointment that the '1600' caps have to go back in the closet for one more day. The S&P's best day in over a week was greeted with an almost perfect 'unchanged' for Treasuries and while stocks went out near their highs, Treasuries closed at the low yields of the day (2-3bps lower than the highs). Of course, the 'most shorted' names were smashed higher (at the open and at 1515ET) providing today's ammo. The USD started weak but Draghi's -ve rates comment sparked a USD surge (up 0.3% on the week) but stocks didn't care. WTI jumped back above $94 with its best day in six months (though little talk from the 'heads' of the removal of the implicit tax?). Gold and Silver also jumped (as did Copper) all ending the day up around 0.75%. Homebuilders banged over 2% higher on the day (as Lumber was limit down at 5 month lows) and while the Dow and S&P closed the previous all-time high, the Trannies remain -1.4% from Tuesday's close.
Stocks recovered yesterday losses very quickly and then went generally sideways on low volume post the European close today (though did make new highs in the meantime)...
WTI Crude saw its biggest jump in six months... closing back at $94
Shorts were trampled at the open and at the 315ET mark...
which dragged the S&P and Dow up to their highs... but not the Trannies...
But sectors tell a different story...
The last time the S&P closed here (Tuesday), 10Y yields were 6bps higher...
and AUDJPY (all JPY carry) disconnected all afternoon...
and US equities totally dislocated from global risk assets today once the US day session opened... (the green line is Capital Context's CONTEXT model - a proxy for cross-asset class risk)
Charts: Bloomberg and Capital Context
Bonus Chart: The last time Consumer Staples stocks were so highly correlated to US Treasuries - bad things happened...
Bonus Bonus Chart: What have global high-quality bonds known for the last 3 months that stocks didn't?
Bonus Bonus Chart: but then again, it's been a good run since the March 2009 lows for all global bonds...
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FUCK SHIT! I'M "ALLLLL INNNN" http://www.youtube.com/watch?v=Q1WUz3hSJ54
FOTHER MUFICKING FACEBOOCH!
Oh come on... down arrow on such a sarcastic comment? Fuck your SPY!
originally it just said fuck and shit, i changed my down vote to up on the first comment but plan to down vote your second comment for whining about your junk.
Fuck you then! /sarc.... LOL! Everything about today was a LOL Day! So I don't care, go ahead and vote down, it would be funnier. ;)
(I just voted you up)
Thanks! LOL!
Never go full retard.
I got to go to testicular cancer therapy sessions on Thursday nights. Wanna come? Tyler Durden will be there.
Dude, I'll buy you a couple rounds of what ever you want.
Full retard is exactly the word for this market.
Get over it, same day Dollar up - oil up - stocks up - gold up - bonds up is the new normal.
And the real economy down.
Those stats won't show until tomorrow.
Those stats will never show.
Fixed it for you.
...for at least 30 min after eating.
Nahhh. I'm practicing shorting the market.
The Central Banks will ensure that oil does not drop too low. Oil is in virtually all prices/costs. If oil prices collapsed, deflation would spike. In spite of much lower usage, oil continues to hold up in price. Wonder why?
"lower usage"? Where? In the U.S.? Sure, but it's a global market now. There are 7+ billion people on the globe, and growing. No decrease in global demand for the foreseeable future. now if something "unforeseen" should occur and the number of people competing for a better quality of life should suddenly go down by a few billion, well, then you might see demand go down...
US oil supply is at its highest level EVER.....So naturally the price is up.
I wonder how many times since "regular POMO" have we seen the Dow rise the same amount of the previous days loss? Remember it's not rigged.
Be careful what you wish for in a lower oil price. Drillers may not drill as much. Look at rig counts--somebody.
ohhhhh i cant wait to see oil hit $120.....ohhhh i cant wait.....................
Oil's begging for the traders to take it higher. With some momo it can really start popping.
You feel okay?, You are not a trader are ya??
It they would just get the guys who trade gold to apply the same strategy to oil and sell the shit out of the futures, we could be paying 1.50/gallon for gas. WTF boys, I thought you wanted to improve the economy?!
Joe Six-pack's truck doesnt run on gold.
Oil just got back what it gave up yesterday. LT trend for commodities is down. Deflation baby!
Inflation, actually. (increase in money supply).
-1 That’s not what “deflation” means.
Dame Mas cervasa por favor.
La palabra es "cerveza' pero yo comprendo que dices.
Yo no hablo espanol.
I forget, who was it that kept saying "short treasurys! short treasurys!" ten times a day back when the 10y was at 2%? Fess up, you know who you are.
Soon the yields will be negative, but people will continue to buy for the price appreciation. Nothing at all wrong with this market, no, no side-effects from massive monetization of bad debt.
I was just thinking today that gas was (relatively) cheap.
Those fuckers don't care about us at all! If they did they'd be lowering the price as we speak.
really-I've never paid higher than this week
Wall street does not know how to invest. Not even how to trade. Just boosting numbers, any numbers, to all time high. One day after another.
That, the street's own days are numbered.
Yea I keep hearing this line 'But see, now we got these 'free monies'....indefinitely....nothin can go wrong now!' Well, any other time thats happened it all came down on everyones heads rather abruptly and unpleasantly.
POMO= BTFD! It's just that easy! Thank o great ones.
....and AIG beats...whooda' thunk it ? All hail the Bernank !
Robot Trader must be on the French Riviera by now
with a French "tranny"?
So are the Trannies still getting Monkey-hammered? If so, I'd prefer not to have any visuals.
jeenyuus!
What shorts? Who is left?
I love how Oil was at 100 with SP 1400 back in Sept and then like clockwork they slam and manipulate Oil/Silver/Gold when it nears dangerous levels and take the SP down for 2 days and then sneak it back up without the commodities. Now 1600 SP and 95 oil.
Oil hits 125 again and they can kiss the printing bye bye.
Centrally controlled world economy...
I agree. There are no shorts left in the markets, which is why there is also no volume. The only shorts you might see are the ones that come in for a flash crash killing, or the ones you see in gold and silver.
http://research.stlouisfed.org/fred2/series/GFDEGDQ188S
Federal Debt: Total Public Debt as Percent of Gross Domestic Product (GFDEGDQ188S)
2012:Q4: 103.58438 Percent of GDP
Quarterly, Seasonally Adjusted
Updated: 2013-03-29 10:01 AM CDT
How much of that "public" debt was due to bailing out "private" companies or providing no-bid government contracts to the MIC? Public my ass.
According to Canaccord Genuity:
http://fs1.hidemyass.com/download/oiJmn/l0dnjl73ag6ihmioaubg7u3a46
HURRY UP AND WAIT
We have been anticipating a correction over recent weeks, and we see no reason to change that view. Our reasons for expecting a pause in the upside remain tactical in nature because the fundamentals that have driven the rally since the 2009 low continue to be in place. We expect a correction because (1) the equity market is near-term overbought and somewhat extended above its 200-day moving average, and (2) the current move higher is the second longest without a 5% correction since the 2009 low. A 5% correction from the recent peak of would bring the SPX very close to our 1500 near-term correction target. As you all know, we believe the intermediate-term fundamental, historical and tactical framework command buying the equity market on any correction – especially one that is +/- 5%. Our 2013 target remains 1760, which assumes a 16 multiple on $110 EPS for the SPX.
Definition of insanity. Before we convince you there could be a 5% correction, we need to convince you the backdrop remains so favorable for domestic equities that any weakness should be used as an opportunity to add exposure. Remember that corrections are only natural, normal and healthy until they actually happen. The definition of insanity is doing the same thing over and over, but expecting a different result. The fundamental drivers of the equity market have not changed throughout this entire cycle, yet many continue to find reasons they won’t work. Those favorable drivers have been:
1. Low core inflation (Figure 1),
2. Historically accommodative monetary policy as seen in the real Fed Funds rate (Figure 2),
3. Improving money availability and steep yield curve (Figure 3),
4. Slow but positive economic activity,
5. Directionally positive EPS and upward trend in valuation levels.
Investing is not an academic study. Is it a cause for concern that the Fed is artificially keeping rates lower than where they should be? Not based on the past four years. Continued deceleration in core inflation is giving the Fed cover to keep rates abnormally low, which improves the availability of money that leads to positive growth for the economy and therefore corporate America. The very smart-sounding counter to these factors are weak domestic economic and employment growth, a meaningful slowdown in growth in China, and the recessionary environment in the Eurozone. These factors are real, and over the past few years they have caused corrections, but have not been the ultimate driver of stocks – the guys printing the money have. We try not to get wrapped up in whether that is right or wrong because it just is what it is – practically positive for domestic equities.
No one knows what the fuck happens next...same shit again as before with the crazy 'price targets'....ONLY 170 S&P points higher than here to year end! 'Gotta buy....'increased exposure + full leverage' its the only way to go...'we only go up now'...'conditions are favorable'....blah blah then next the wheels fall off one morning at 120 MPH and everyones going 'WHOA what happened no one saw THAT comin! Bunch of BS bottom line and no one knows shit.
You better slow it down to 100 before you have you own mini flash crash.
"The fundamental drivers of the equity market have not changed throughout this entire cycle, yet many continue to find reasons they won’t work. Those favorable drivers have been:"
6. Rampant federal spending to the tune of 1+ Trillion budget deficits annually...
A lot of this same crap was happening in 2007, new highs everywhere, crazy price swings, dumps followed by equal pumps the next day.
Yes, but now we have 85 billion per month, indefinitely... It's only different this time because rates will go negative and then 85 billion will become 120 billion... and then 400 billion... ...in this way the savers and bond holders will indeed "save the country"... ...bah ha ha ha ha!!
Well...buy that then. 'Increase exposure' as everyones begging someone to do. I'm sure as hell not.
I want to be on the other side of that trade, specifically, I want to know when the banks start paying me to take out another loan?
Here’s a hint: when you can prance around saying “that’s why I’m richer than you” that’s the day.
Please add the $75bn a month from Japan, since it all swirls into the same toilet bowl.
So, $160bn a month. And that's not adding in reinvestment of maturing bonds at the FED.
Nor is it adding in the Israelis buying stocks, Norway's sovereign wealth fund buying stocks, The BoE, the RBA, now the RBC apparently, the ECB, etc. etc. etc.
It is crazy money. Pedal to the metal is all these guys know, Dr. Strangelove playing central banker.
has anyone said, "FUCK YOU BERNANKE!!!" yet?
It seems that Reginald, an astute 3rd grader in a prominent Peoria elementary school, did so this morning after the S&P's opening surge, for which he'll spend the rest of the week in detention.
Tyler - What is the correlation running right now? Almost at 1 or do we still have a little ways to go....and them boom?
I can't find any other reason for this madness, except for a Reagan Scenario Number 2.
In 1988, before Reagan attacked Ghadafi (remember him?), he gave the order to accumulate oil into the SPR. Oil price went up.
Then upon attack, oil price spiked....but Reagan released the oil from the SPR and indundated the world with oil. Price collapsed.
I see no other reason for anything that's happening, no reason for QEs, except for an attack on Syria/Iran.
A combined attack on Iran/Syria along with crude oil spike and collapse along with market crash, would disperse the focus on all events and not allow the world media to focus only on one. Old trick.
Yep, basically how I see the whole thing. Lull everyone into this complacency....hell at this point even the biggest skeptics are convinced the markets are never going down again, then suddenly one morning we see Iran invaded and Russia and China in on it too of course, bombs going off everywhere...and suddenly no one can even log onto their E-Trade account...it's just gone.
I'ts been a long time I've been saying that QE is a POLITICAL decision, not financial.
Because QE leads to depression which is happening right now, and the reason to do that is only political.
Wake up from that dream man, you made me feel like I just got back from my shrink.
Oh your silly theories. I am sure the "rebels" will take care of it, and USA will simply enforce "no fly" zone (drones permitted of course).
Either my theory or sheer madness in the literal sense.
It's abundantly clear QE causes depression.
Bond yields continue lower, market continues higher; it is great to see this freshly created money enter the market, and to think of all those deserving people it has enriched. Don't fret if you've missed this run, for the bankers urine will surely at some point trickle down on your forehead, allowing you to taste the sweet nectar of success, showering you with gold. I await that day with an open mouth. God bless, my friends, and God bless Ben Bernanke.
Why do we bother having Fed. announcements?
They should have a bunch of hookers dress up like cheerleaders in green outfits and read 'Chair Satans' one liner from the floor of the NYSE... "We will increase/decrease monetary policy when the keg reaches 1/2 empty."
If you divert a lake into the ocean, does the water level increase? Of course not.
Same with QEs now. POMOs are irrelevant. Primary Dealers already own everything.
EKM your understanding and due diligence regarding "primary dealers" is above my pay grade. I'm just thankful we have your input to keep us informed. Homework is highly under-rated. Keep up the good work.
I explain it like this; If there are 10 houses on a street and GS already owns 9 of them they will gladly pay an extra $100,000 for the 10th as it makes it look like they just added $900,000 to the value of their real estate book. Especially when they have funded most of their aquisitions with free Fed bucks.
Plus the rules say you have to own all the houses before you can swap them out for hotels.
When is this going two be over. Jesus christ im bored of new highs in the markets keeping the publics eye away from reality
Higher oil prices only bother the lower 90%, so -- no big deal... We still have POMO...
www.nytimes.com/2013/05/03/health/suicide-rate-rises-sharply-in-us.html
Bullish?
However, consumers ain't gonna like this. I guess they can shop online.
Oh, wait...they have the internet sales tax and shipping/postal rates to deal with....
Oh well.
consumers? you still think the US economy, aka the stock market, is driven by the consumers?
Why even bother with the drama of reporting stock prices throughout the day. Why not have the Great Chairsatan simply dicate the opening and closing prices each day as he dispatches Kevin H. to to his bidding.
Great Chairsatan => Hades beckons
When they can create money from thin air to afford their lavish lifestyles, why are we still working to earn a few bucks to survive? Why does that money have any value to anyone anymore? None of these people have ever worked an honest days job, ever planted a garden, harvested a crop or built a barn. None of them have ever milled grains into flour, kneaded flour, butter and eggs into bread or shoved a bread into the oven.
None of them have EVER worked a single day in their lives to understand what WORK is. But they live better, eat better and sleep better than any of us who do this work on a daily basis.
We the workers are supporting THEM and THEIR unproductive, lavish and exessive lifestyles. WE DO NOT NEED THEM. They are a disgrace to humanity and a cancer on our planet.
The sooner we abandon their system and their selfish monetary illusions of grandeur, the sooner we can discover the true value of assets including the asset of labor.
alright! need to go out right away and let the people know what's going on. don't interupt dancing the stars.
What is amazing is that bonds are telling you that all these economies are suffering a big deflation. Growth is collapsing everywhere (from the feeble levels that there were), and there is no hope for the unemployed. Yet stocks think thats just great, just as the imbeciles in the CB's think its great that stocks are up. Well i recall japanese equities doing the same 25 years ago and then reality hit, as it will for the SPX soon enough.
I don't know much but I know one thing and that is that you shouldn't be buying equities in a delfationary world, irrespective of what "liquidity" central banks are pumping in.
Just watch the short squeeze that's coming in eur/usd. Look @ eur/gbp for guidance. Tyler is pretty good good at calling the f/x correlations. If the Euro sinks the $ strengthens.
Cable is overbought on the daily chart, and in limbo. The Yen is a joke! Watch 2 year yields [re;] Swiss and German bonds for direction on the Asia trade S/T.
Pop that oil higher for the summer. In some areas it's over $4.00/gal for gas and nobody complains anymore.
Everyone has grown accustomed to $4.00 plus oil.
Time for the traders to take it much higher.
ECB Draghi lowering the rate from 0.75% to 0.5% to create loan demand. Also threatening banks if they take money and park it at the ECB will get penalized.
Draghi fired up the chopper and is about to do the grandest flight of his lifetime.
Money will rain from the skies in Europe in 3,2,1....
Wait. Is it possible for them to short gold for instance and never cover it and then sell the short to Bernanke?
This is an interesting story re. 401(k)s:
More U.S. Firms Shutter 401(k)s, Matching Programs
By Brian O'Connell | TheStreet.com
http://finance.yahoo.com/news/more-u-firms-shutter-401-150000359.html
excerpt:
"Overall, 42% of U.S. companies now don't offer 401(k) plan matching for their workers.
That's a trend financial industry professionals say will continue, given the soft economy."
Pulll a chart on the SPX from the forties to present day. If that doesn't make you say DAMN, I don't know what will.
And just yesterday all the pundits were citing high inventories and all sorts of fundamental reasons why oil took a huge hit.
So what's the story today? Did everyone with a Hummer or a Suburban wake up this morning and realize that they still needed to drive to work after all?
Equity highs have been probed for well over a month and found to be toppy. Pomo money will now find its way into commodities as they are well off their highs. That's my fearless prediction anyway.
Equities up, treasuries up, commodities up, pm up, oil....
hmmm