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Just Three Charts Into The Close
These three charts suggest that all is not well with the ramp... but all that matters is a Dow 15,000 close...
Equity managers are hedging... (VIX is green and divergent)...
and while futures volume is better than yesterday, relative equity trading volumes are not at all supportive of this ramp in the indices...
and risk-assets are not playing along at all... even as Treasuries limp higher in yield, the equity move is well beyond it.
Charts: Bloomberg and Capital Context
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internals are meaningless these days. we've been watching ramp after ramp on declining volumes and zero ticks for the last 3 years.
How often do you see both VIX and SPX up at the same time?
the vix is broken, QE off is the new vix ( Maybe ill be long dead before they stop printing)
Vix is so manipulated now that it's meaningless.
Just checking: how old are you?
The old pit viper formation.
Yep..
They are actually buying calls. FOMO managers coming out. Reformed sceptics hat in hand. Doug Kass is sorry. Marc Faber buying drinks for everyone in Pattaya. oh well. Single digits mid month bitchez.
People said the EXACT same thing during the internet bubble. Everyone was convinced that the Nasdaq would never go done.
It is funny how people get caught up in this crap. Internals, earnings the health of the economy do matter in the long term.
Housing pricing cannot go down is what everyone said, how can you say the stock market will always go up when in the last 10 years that has spanked you twice.
Within 1 year the DOW will be at 6,000 and then people will change their minds.
The stock market will never go down until the final crash,the next one is the last one.
im down 50% of my investment shorting /es, sucks bad but oh well.
Yea I wouldn't touch any of it with a 10 foot pole anymore....once the casino is known to be mob-ran and rigged, I don't care what promises they make about how safe it is, you'll definitely lose in the end.
Idea for making back losses from shorting SPX: sell deep out-of-money puts on ABX, NEM and KGC.
you should have went to vegas
Do not short, keeping some powder dry is the equivalent of shorting now a days. Shorting against POMO is suicidal. But be ready, the day of reckoning may come and you want to have all the possible shorting capital by then...
Until next time,
Engineer
Yeah, best not to short these days....my strategy is to pick a badly beaten down commodity or stock....I added oil when it dropped to $89 the other day (using USO as my equity). If GLD drops back below $1,410 I'll add lots of that. I am considering AAPL but Samsung is capturing the Asian market like wildfire and that's where the future is for that stuff...so I'm holding off on that...
Good luck to you....it's a tough world out there now with all this manip....
Only thing that matters now is making it thru the day and closing higher, so they can try to live another day.
Market has been lobotomized.
Very clever description but it never actually had a brain... just a bunch of stringy-things being pulled by the people behind the curtain...
It does have a brain of sorts through the actions of millions of operators worldwide. I will repeat a post and a follow up explaining what is happening and why.
"Don't forget what a BOND is. It is GOVERNMENT BONDAGE. Anyone who owns a BOND owns the future income generated by someone else, in other words BOND = SLAVERY."
Thanks for your comment, since in spirit I am on your side, and my emotional side wants to cheer by you. The reality is more complex, but not a lot more and you inspired me to come up with a simple analogy that I hope will help place the blame where it belongs: Megalomaniac economists with PhDs that don't really understand what the consequences are of what they are doing, but believe they do.
The problem is not "interest" or bonds. Historians have researched the origin of interest and amount charged on loans from the Babylonian times to today. What they have found is that the amount ranges from 5 to 10% with an average that is incredibly close to the reproductive rate of most herds of animals used for milk, meat, etc. Further research strongly suggests that this originated in the question of who owned the animals that were in the bellies of pregnant females when the heard was lent to a debtor. It was thought that the fair answer was that they were owned by the lender. This started with fathers lending animals to their sons to kick start them forming their own family.
My conclusion is that there is nothing wrong with interest, the problem lies squarely with the way we are abusing the concept today. First governments are creating and allowing environments of very high, obscenely high MORAL HAZARD in the microeconomic sense and in the common moral sense. This environment and the absolute lack of effective checks and balances in the control systems are encouraging, to the point of making it a lack of fiduciary duty, the concentration of fiat wealth and forcing the payment of interest on that fiat wealth. Think about the old analogy, we are today asking through interest the payment of the produce of herds that DO NO EXIST, they are a figment of imagination on Dr. Bernanke's head, and nothing more. Obviously if you own a real herd (real productive capital) and somebody comes and tries to borrow it from you, but tells you that he wont return to you the animals in the bellies of your pregnant females? Why in hell would you lend to him what so much cost you to create on the first place?
In a very simple analogy, I tried to explain the crux of the problem today. What is inmoral, even for the PdD economists, and that is what they have been all taught in College, is the MORAL HAZARD of the decisions that are being made. And the herd analogy explains why this fiat money is having trouble going into the real productive economy.
In a nutshell, Dr. Bernanke is destroying the mechanisms that evolution created and allowed us to prosper from the mass starvations of the stone age to today.
Until next time,
Engineer
Correct, the true problem is the creation of capital that is not creating any value. The only sense of creating capital is to finance productive projects that increase the wealth of the society. The distribution of that wealth is another matter, a political one. But capital existance for itself makes no sense whatsoever, it is only justified by its ability to facilitate the creation of wealth. My previous example with the herd is very simplistic but still valid analogy. We can argue until hell freezes over about the fair distribution of that wealth created by the herd that reproduces itself, without any further intervention of capital. The analogy of that natural growth is funding projects with positive net present value = creation of wealth. Interest again is only what was produced by the capital, if nothing is produced nothing should be distributed and interest should be zero!!! But then capital has no meaning whatsoever, since its only function is to finance the creation of wealth. If something is produced, then we can argue what percentage of the wealth created to distribute back to the creator or back to the people that had accumulated the original wealth (through hard work in any fair system). The basic reproductive value of the capital, i.e. the growth rate without doing nothing of the herd, is what we decided through thousands of years of evolution to distribute back as a minimum to the provider of the original wealth. For a house for example, the creation of wealth is the protection it provides to its inhabitants from climate changes, animals, etc. And the capital is the effort or accumulated wealth that was used to create it. He/she who lives there is not paying rent and gettins something of value that they can not afford, how much should they pay for that? Again, I don't want to get into the political discussion but into the technical side of things. In the end for somebody to provide the capital or weal previously created (always assuming that he/she who has the wealt, the wealth comes from hard work and effort, otherwise the system is destroyed as it is happening today) by them, the receiver of that capital needs to pay the minimum self reproductive rate of interest that that group of people would have obtained if they had kept their wealth is a simple herd. Without that there is NO incentive whatsoever for anybody to accumulate welth and we couldn't fund wealth creating projects.
What happens when you introduce unbounded amounts off fiat money into the system is that it can not find places to be used to produce wealth since its growth is not accompanied of the growth of low risk projects with positive NPV or what is most important, management teams capable of managing those projects even if they existed. As a result the total produced / total amount of money in the system goes down exponentially, since it will only become zero when the total amount of money is infinite. The Federal Reserve is already in the asymptotic part of the relationship, and larger and larger increases in the amount of money are having less and less of an effect in decreasing this relationship. At the same time, those who own value creating assets that are able to create wealth, are able to price those assets higher and higher in proportion to the increase in the monetary base. Thus the market goes up and up and PMs since they don't produce anything, only preserve wealth, stay behind. But they only stay behind in relationship to wealth creating assets that are priced up disproportionately by the increase in monetary base. PMs don't go down in real value, their intrinsic value as we all know stays constance. Meaning how much is one ounce of gold worth, simple, one ounce of gold. But the name of the game today is wealth creation assets price, which goes up in inverse proportion to the decrease in yield produced by the above ratio (total produced/monetary base). Please remember that in a deflation and depression scenario, many assets believed to be wealth producing assets will fail and their paper value may become zero, that is the conundrum of the stock market getting priced way beyond its reasonable price for the associated risk.
What is the discussion between holding PMs or wealth producing assets, well the endgame, depending on what your view is of the endgame you will choose one or the other. What I have been trying to advise everybody in zerohedge is that NOBODY can know the endgame, because the economic system is a chaotic system in the mathematical sense and therefore you can not predict its trajectory once it destabilizes from its current attractor, since with all the computing power of the world you can only go forward a few seconds. Therefore the best you can do to try to place yourself in a good safe place is to accept that you will loose 30 to 40% of your paper wealth whatever you do and hedge for all conceivable scenarios, since all have equal probability today. Once you destabilize this kind of system you loose control, and the system is completely non-stationary... That is why Grosss is so pist off, he can't hedge. Soros knew this when he closed his fund years ago and decided to manage only his and his family's money, preserving that was going to be a challenge on its own.
I am not making any political statements only stating technical facts.
Until next time,
Engineer
Here's an even simpler one...
Corrupt politicians (usually lawyers) selling the citizenry out for their own gain to weathy interests and using the Ph.D economists/policy analysts as the smokecreen for their actions.
Basically greed.
I always prefer a sentence or two over many pages.
unbank, boycott financial instruments, minimize retail spending, leave the TV off and avoid "entertainment"
S T A R V E T H E B E A S T !!!
We've stopped watching TV in my house.
It was one of the best decisions -- freed up time to do many other wonderful things in life and given me back my opinions.
Now just get some outdoor exercise... back into the natural environment of Homo Sapiens... and you'll feel even better!
Just had my first swim of the year (no blackflies under water) and my raspberries and blueberries are doing splendidly...
Re: "Now just get some outdoor exercise..."
I do a 20 mile bike ride every single day (and 30-40 miles on Saturdays and Sundays). I haven't missed a single day during the last two years.
I thank my fellow "nutcases" here at ZH...
I bought a couple of hundred acres of (close to city) wilderness a couple years back and have never felt better. The world could (will) fall apart and yet every morning the sun will still rise over my pine-lined shores and peace and tranquility (plus chipmunks, beavers, bears and bugs) will always reign supreme...
Agree. Filled some of that time with gardening. Rewarding to get fresh veggies out of the deal...
I love gardening too.
Two months ago I told a friend that if my TV were to break, I wouldn't replace it. Sure enough, a month ago I wanted to check the markets on Bloomberg and the TV didn't work. After diagnosis, a new power supply board was going to cost over $300 in a 7 year old TV. I decided not to fix it. Then I called Time Warner to let them know I'm giving them back their cable box and remote. After reviewing my Time Warner bill, I realized I was spending $73/month to watch TV. We rarely watch it through the summer anyway. Incidently, I found that I can watch Bloomberg over the internet.
I recently took up yoga, one of the best decisions I have ever made.
It is one of the only things that helps take my mind off of all this shit.
I have promised myself to start thinking about opening bottles of wine with a manual corkscrew instead of the gas needle thingy..., well, thinking about it anyway.
Who would sell in this market? Who is left in this market but computers? There is no reason to go down. As your other charts show, weekend news and actual reading by humans occurs and selling hits on Monday which is completely unwound the rest of the week. "Dow 20,000" will show up on Barrons headline by summer. And they will be right as long as Ben keeps shoveling cash at banks who have nothing left to do but offer free car loans and dumping it in the equity markets.
"And they will be right as long as Ben keeps shoveling cash at banks who have nothing left to do but offer free car loans and dumping it in the equity markets." - not quite, unless you really think treasuries will be allowed to go bidless. I don't think so, Ben and Krugman know the if low rates are good, negative rates are even better.
I think you are correct. Bad news has no effect on stocks anymore because none of the computers sell bad news (unless it's a flashing headline about somewhere in Europe most Americans couldn't find on a map). It's funny that they talk about capitulation as though there is any meaningful shorting - there is none.
This market is a re-run of the Clinton years, the virtuous circle of ever increasing prices, regardless of fundamentals. I have a very strong feeling that companies are up to the same old tricks to boost earnings in the face of shrinking margins and revenues, and all this dodgy accounting that is at the heart of US business practices will need to be unwound at some point. This may happen in 2017, around the time the shale bubble finally pops but these fuckers are going to keep the game going a while longer.
"and all this dodgy accounting that is at the heart of US business practices will need to be unwound at some point."
Yet another in the LONG list of things that cannot go on for much longer - like 1.5 to 2T USG deficits, not to mention EZ goobermint deficits, Trillions and Trillions in global monetization (before they absolutely lose control of inflation at some point), and never prosecuting another criminal banksta. The next version of of Occupy Wall Street will be MUCH stronger/worse for those scum suckers.
If your name is Maria 'Jew Kiss Ass' - a - ROMO... Life is good [according to your earpiece]...
In 1999, Bartiromo married Jonathan Steinberg, chief executive officer of WisdomTree Investments, and son of financier Saul Steinberg
http://en.wikipedia.org/wiki/Maria_Bartiromo
OK ~ So I was wrong... She's Maria "Suck Balls, & get fucked in the fat ass by a circumcised dick" - a -ROMO... My bad...
~~~
Jeez ~ On balance, I think I'd rather be Becky Quick...
It says she's 45? Are they kidding? I'm not even trying to be an asshole here - if she's really 45 she has to be a heavy drinker/smoker or snort twinkies by the box to look as old as she does.
+1 for helping revive the twinkies brand from bankruptcy...
We seem to be pretty burned out here, don't we.
It's just that it sucks to be lied to for decades, and when you tell people about it, they look at you like you're nuts...
I think the charts are maybe overcomplicating things. I think everyday you have to sit down and ask yourself ' is the Fed still monetizing the debt to the tune of $85 billion/month?' and if the answer is yes, then you buy anything not nailed down on the NYSE and NASDAQ, and aggressively short gold and mining stocks as a demonstration of your patriotic love of, and commitment to Wall Street and Washington. And then you can go golfing, or bowling, or whatever the fuck you want, secure in the knowledge that you're on the right side, and that you'll have more money at the end of the day.
But only on Tuesdays.
"and that you'll have more money (worthless fiat) at the end of the day."
OK, now I feel better.
NASDAQ 3500!!!
Talk to the Money. The printing press can get the market to a million....it is just that million won't buy you a car!
The distance between a possible economic recovery and this money pumping is getting bigger by the day. The claws of financialization looking for the pie, and soon jumping on a donut all together.
LOL, I should try BDSM next. Went short into the close.
Went short into the close.
Ummm, been there done that, feeling perhaps it might work. NOT. Also, never short more after a down day, harr harr harr! We've known that for quite a while.
Conclusion? Do nothing and buy the "WHY BONDS" approach.
Is the Fed still printing? Then keep buying and holding.
When the printing stops, look out below. S&P will dip below 1000 in weeks.
You're nuts. Never happen.
"king dollar..."
hee, hee......almost there....
"After the gold rush is thought to have waned, and the two tons of gold American Eagle coins sold by the U.S. Mint (in one day alone), has faded from the headlines, we find the simply shockingnews:
223.519 metric tons (mt) of gold was imported into mainland China for the month of March. Compare that to the 51.3mt and 97mt imported in January and February, respectively."
http://goldsilver.com/article/223-5-metric-tons-of-gold-imported-into-china-in-march/
Seriously, VIX ought to be lower on the move. The SPX price is always right, BITCHEZ
Bernanke is increasing his principle but decreasing his dividend. I guess he'll have to lobby congress to bring home all the offshore money to increase SPY's yield.
Guys, Japan and Europe just eased so we can go next (and bigger). Those moves were just to set up the USD index for the Bernake and have the nice side effect of taking down gold.
You're going to be really mad when you see where the market goes next. Not sure why PM bugs aren't paper bugs short-term since it's easy money they can use to fund PM purchases.
We are not Men! Yeah yeah yeha yeah yeah yeah yeah yeah yeha, YEAH!
"Not sure why PM bugs aren't paper bugs short-term since it's easy money they can use to fund PM purchases."
some of us r strictly opposed to enabling sociopaths, their rigged markets, and their debt based currency paradigm..."lay down with bankers, wake up with ticks and fleas"... i have love for dogs as you can tell...
Yeah but there is nothing more anti-establishment than taking Bernanke's ramp and buying PMs (instead of Iphones) with it.
dont need to participate in the Fraud Market in order to do that...
ever heard of the Silver Savings Plan?
http://www.youtube.com/watch?v=hh-xQbfOoFI
I can tell by your rigid, staunch tone in the video that I'll never make inroads here. But I'll say it again: I'd rather use Bernanke's ramp to purchase PMs than my own discretionary income.
As Schiff noted, it's not an either-or equity/pm argument when the problem is dollars.
I'm in your camp, although I'd be tempted by an "H & H" Hedge Fund ( helium and hydrogen) open to all like minded ZH fight club people.
Also, I don't think it's coincidence that Europe eased May 1. This will help US companies in those markets while also providing favorable conversion rates during a seasonally slow period--all will prop up earnings artificially.
China and Russia, possible black swans and the risk right now.
Isn't this just a reprint of the same market divergences present on this day in in May 2010, 2011, and 2012?
OK so now we should get short? As opposed to yesterday? Or the week before? Or last year? Or two years ago? Or three years ago? Or four years ago?
"Won't be long now."
Excellent point..!! Probably best to wait for a 1/4% decline for crash confirmation..!!
The ONLY concept that makes any sense is the "intentional Crash" scenario. The 'reasons' will be revealed eventually, but I think it may involve a new currency regime triggered by a war induced sell-off. If Israel is attacked by chem/bio type warheads (entiely possible from the insane towel-head posse), they easily could tactically nuke Damascus.
Then, we may sell-off with a 'no-bid' market melt...like Assad's palace after the strike...!!
And then the "new" currency that cleans up the derivative/sovereign/general credit mess is 'delivered' (partially collateralized in gold) @ "Brittle Woods II"..??
Call it "Wag The Cat", if you'd like..??!!
So why didn't they allow it to play out in 2008?
Dont' Know..?!?! Ya gotta ask the 'Producer'...
probably cause they weren't ready, maybe even really caught off-guard..??
GREAT question, though...
*Pulls him out of the rabbit hole*
Come on, man. Occam's Razor suggests these people are academic idiots who genuinely believe this will work. After all, their model says so.
you may be right...but, they gotta know the math...don't they...? Occam was smart and knew math 4-SURE
Any person stupid enough to be playing equities now deserves to have their head handed to them.
The game of Equities Musical Chairs continues until it doesn't.
When the music stops it won't be Joe $10B Hedge Fund who loses his ass.
It will be Joe Retail.
Assuming there are any Joe Retails left to lose their collective asses that is.
"Joe Hedge Fund" or John Paulson Hedge Fund..? one of 'em didn't get the heads up
"Assuming there are any Joe Retails left to lose their collective asses that is."
Yeah, when they start cutting back/off the EBT cards to 48 million folks because they can no longer fund the 1.5 to 2T annual deficits in the US, along with the multiple trillions more in unfunded liabilities (just call those 'lies'), or when doing so really ramps up MIGHTY inflation we've all been prognosticating about - that's when Joe Retail will wake up and realize just how much of their collective asses got lost. Like many here, I am not prepared to give a date on exactly when that will happen, as the Rampalooza seems to have a weird life span of its own, but I'd put it inside 5 years, probably inside 2 years...I think it'll get really rough for a while compared to what Joe Retail has been used to.
Hey! Can we all just agree at Zero Hedge, for one day, to not talk about the inevitable swoon in the market (that is never going to happen so long as we keep talking about it), so that we somehow convince even Santelli, that Zero Hedge has thrown in the towel and gone long, thus triggering the sell-off that we have been logically arguing for about, oh I don't know, SINCE 4000 DOW POINTS AGO! I mean, I don't know about the rest of you, but, its getting increasingly difficult NOT to feel like an ass clown every day, missing out on perhaps one of the greatest bull market runs in history. People are starting to think I'm batshit crazy! And I gotta tell you, there are some days (like today), I have to agree.
P,
I am assuming you've been around for a while, right? Does this all seem 'normal' to you..?
it is obvious they do not want anyone still in this hand on the river...
You're right, its not normal. But, wtf is anymore? And nothing to me is obvious (and i mean no disrespect). I used to trade the Emini back in 04 and the pomo days were just as real then as they are today. It was one of the reasons i got out of the futures, and took short or long positions against stock since it was a lot easier to minimize damages from a mid afternoon whipsaw. I don't know. I think the market is what it is, and that regardless of what we might think, its going to do what its going to do, until it doesn't. I'm only being sarcastic because, thats what it is starting to feel like - the louder Zero Hedge is, the higher the market ramps - fucking near every time! Its goofy. I know. Some say ground hog day and the like. And then I remember the oracle from Omaha saying waaaaaaaaaaay back in 2009, "if you bet eagainst America, you're going to lose." - well so far he's right, isn't he?
I cannot argue with anything you've said...stay short with way otm VIX calls...cheap crash rush...just in case Buffet is an Old Coot and nothing more...I will say a bunch of bearish bloggers gave up this weekend...
"if you bet eagainst America, you're going to lose." - Is Bernanke representing "America", or some other org ?
So join the party already...........
however, would it help if we said we like you just the way you are?
Would Bernanke bucks help your situation?
No. Just tired of being perpetually wrong.
You are not wrong, the FED is QE to infinity, the moral hazard is will our progeny thank us for the Treasury debt? It's been 'unpayable' for several years now. Shift your attention for awhile: I just read some quotes from astronauts who went to the moon, for example....there's more out there than 0's and 1's.
"End Game"? Well....we can only look back, right? There have been plenty of end games that result in a new game. See Cyprus, Venezula, Argentina, Mexico. All had end games...that devalued the currency.