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Another Day, Another Record High Close
From the November lows, the S&P 500 has gained an impressive 21.5%. This is at an annualized rate of over 50% with 4 very modest 'dips' that have been snapped up by those that should know better. The Dow topped 15,100 - yay! Until the last hour of the day, VIX was very much not in agreement with the exuberance in stocks but the mid-afternoon swoon in stocks (Druckenmiller?) that corrected futures to VWAP was just what was needed to spark some furious volatility selling euphoria and crush VIX back to its lows of the day. Despite the equity excitement, 'most shorted' names actually underperformed (for once) but every effort at selling was met with a squeeze (especially into the close). Treasuries ended lower in yield for the second day in a row with stocks higher. Credit markets remain under-impressed for the second-day with IG and HY both wider on the day. Commodities generally improved on the day (with Copper's early euphoria fading as the day went on) as the USD leaked lower (with everything stronger against it aside from AUD). Today was the highest average trade size in S&P futures of the year (on sub-average volume).
Trannies are now up over 5% from the pre-NFP levels on Friday with the rest of the major indices up around 2%...
History doesn't repeat - except when it does - 17-day roundtrip dips that were f##king bought...
Shorts tried... and failed...
But credit seems to be backing off a little - or perhaps this is the pairs trade (Sell HY, Long Stocks) from an overly bubbly spread compression...
and Treasuries remain unimpressed...
Commodities drifted higher (on weaker USD as much as anything else) though Copper jumped early on but gave most of it back...
Across the index capital structure (i.e. Stocks, credit, rates, volatility) it was stocks that led all day with the rest lagging (as evident below) until VXX was slammed at around 3pmET and 'reality' converged...
Today saw the largest average trade size in S&P futures trading of 2013 (on lower than average volume) - typicaly professionals get in at the start of trends and out at the end... a spike like this suggests exits but nothing makes sense anymore...
Charts: Bloomberg and Capital Context
Bonus Charts: Hedges were lifted in that last hour...
but underlying volume was not at all on the bid-side of the market...
pros reducing exposure?
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Damn! The Dow is like Mark McGwire. Breaking a record and then breaking again in the same day. GOT DAM! How'd that McGwire thing end up again?
Steroids are a bitch as is anything fake in life. This won't be any different.
Dow Oct 2011 10,500
Dow May 2013 15,100
What's the problem.
So by election 2016 we will be at 21,000.
Fuckin sweet!
Helz Yeah.. U.E. at 5.9% too.. BTFD..
DOW/Gold ratio 2000: 40
DOW/Gold ratio 2013: 10
What's the problem?
".......here on Gilligan's Isle!"
More like Fantasy Island.
This time we have CNBC cheering on our juiced-up, shrunken-balls market, chanting "Ber-Nan-Ke! Ber-Nan-Ke!" and waving the QE pennant.
And here is the CNBC cheerleading crew. Liesman, Pisani and Cramer.
Rah?
http://izismile.com/2009/03/18/the_ugliest_cheerleaders_36_pics-9.html
Steriods yes,
But the market right now are hemmoroids in the arse of the bears. They keep trying to short, and getting done like a dinner!
==> SEE HERE
I have been selling stocks and buying bearings for Peru. (Well, gold too)
Harder than it looks though.
"Factor Analysis of Ameru's Sales Data"
http://tinyurl.com/bsjlho7
Batting coach, duh.
I remember the bid on my '85 Topps McGwire rookie card was about $400 at the time. I'd be lucky to get $10 today.
Reminds me of a quantum physics book, titled:
Nothing I See Means Anything.
Yawn..... Are we there yet?
As soon as NASDAQ gets back to its all-time highs.
S&P 2000 then collapse!
Or, alternately - 200,000
With the price of an egg being 1/3 of that, and not a jewel encrusted golden egg, just your regular farm fresh variety.
DXM was up 20%---thanks Kyle. He said five years, not 5 days! I think he must have been referring to inflation's affect on the entire market, not just Dex.
Once the markets get high enought they are going to have to increase the injections just to meet the outlandish valuiations. MOAR!
Damn good point.
It's like we're riding next to James Dean...
Kevin Henry will continue to BTFD until Bernanke's book tour.
How long do I have to wait until my short pays off? 2015?
The Disqus comments on CNN said that this was proof that Obama is a great president and that the Tea Party sux.
Wow, you are stronger than I am.
I would rather cut my own balls off than read the comments there.
pods
Sucks there were no dips to buy today. Oh well. I'll just keep buying cuz "stock are cheap".
People shorting this cotton candy machine, or buying copper thinking that "the recovery is here" and it will rally, are getting punished.
"Lol" --Bernanke
We have officially hit "Honey Badger Market" territory.
We are gonna be toasting to the market by the light of a table burning inside a 55 gallon drum before this is over.
Now where are my fingerless hobo gloves? Everyone needs a good pair of them if they want to be a hobo.
pods
Equities is the new socialism. Everybody wins, everybody gets a trophy. Bernank hands the trophies out.
It's just being "fair", so stop being so selfish and greedy. Bernak will ensure that we all share the"wealth".
tyler, why do you make a new writeup daily?
i applaud your work, you do a great job with this site, but with certain things like this, you can just copy and paste this article daily and save the time writing it.
we all know tomorrow will be another new highs, friday same thing, and so on and so on.
you do a phenominal job, but with these markets ( at least that is the name it goes by, whether it is one or not, we know the answer) we all know how things are going to be daily.
1630 will be broken to the downside tomorrow and we will start the cyclical dip to 1600 by Friday.
http://www.cnbc.com/id/100718505
The bond markets will crash once global central banks stop buying debt, triggering a financial crisis much worse than the one seen in 2008, strategist David Roche told CNBC.
Roche, who has previously warned that "safe haven" government bonds are the most dangerous place for investors to be in, said Wednesday: "Yes it [a financial crisis] will happen and yes, it will be bigger [than the credit crisis]. Once you re-price the burden of the world's debt... the ugly truth will be revealed."
According to Roche, president of Independent Strategy, once the expansive quantitative easing programs initiated by Western central banks come to an end, sovereign bond yields, including U.S. Treasurys, German Bunds and U.K. Gilts, will spike significantly prompting a crash.
Yields on U.S. 10-year Treasurys have fallen more than 200 basis points over the past five years and are now around 1.8 percent. Meanwhile, U.K. 10-year Gilts and German 10-year Bunds were also trading near record lows on Wednesday at 1.8 percent and 1.29 percent, respectively.
"As long as the central bankers print money, the only way to have to distribute it is [for governments] to buy 70 percent of new bond issuance in these safe haven bond markets. As long as they go on doing that, the yields won't go up, and the day they stop, the yields will go up by so much we will have a financial crisis on our hands," he said.
Roche said the impact of a crash in the "safe haven" bond markets will be catastrophic for financial markets worldwide.
"You are looking at a massive capital loss on a mark-to-market basis for a lot of financial institutions in the world and for people who have put their savings into those bonds, which will hit demand and hit the real economy, because if wealth goes down people's optimism about the world economy will fade," he added.
In recent years, major western economies have embarked on expansive bond buying programs in attempt to prop up flagging growth following the credit crisis. But speculation over whether the U.S. Federal Reserve will end its expansive bond buying program, has risen this year. In the Fed's latest minutes, it emerged that several committee members were concerned over the risks of continuing its asset purchases for too long.
The end of QE has prompted concerns over how markets will cope unsupported.
As long as they go on doing that, the yields won't go up, and the day they stop, the yields will go up by so much we will have a financial crisis on our hands," he said.
. . . . Which is why the Bernake (or who ever his replacement will be) can NEVER stop printing.
I know, I know. Preaching to the chior! :)
MFB
I can literally visualize Ben singing his cover version of The 5th Dimension's "Up, Up and Away", in full 70's
gear and with Yellen and the rest of them on backing vocals on the Letterman show, but then I did take a lot
of drugs when I was younger.
"And sometimes I think some junkie economist is stepping on my medication but I can't...be...sure."
http://www.cnbc.com/id/100720823
The stock market, which hit new all-time highs on Wednesday, could experience a crash within two years, bearish economist Nouriel Roubini said on CNBC.
"It could go on for another year or two," he said, speaking from the SALT Conference in Las Vegas.
I see frothiness going to end up in nasty boom and bubble in asset prices, followed by crash and a bust, not this year, not next year, two years from now."
On "Fast Money," Roubini cited a couple of factors: "Growth is slow. Earnings growth is also slowing down. Top line and bottom line are not as good as they used to be, but margins are high. They could correct somehow over time.
"But you have the gravitational forces of a slow economy leading eventually to correction, but then the levitational forces of QEs, zero policy rates, more money coming in the market, not just from the U.S. but other economies, is going to levitate asset prices."
Roubini said that those conditions could lead to "a generalized credit and equity and asset bubble next year or two, followed by a crash."
But, he added, "as long as the economy grows between 1½ to 2 percent and you have easy money, this market can go higher."
Cannot argue with what Roubini had to say....the more money printed, the more it goes into the market, the higher goes the market, the more it attracts more money. Aside from this source of funds, our market is also attracting money from Europe, since (compared to Spain or Italy) we seem to be a 'safe haven'.
...at least the Chinese are buying gold...they will most likely be the 'last man standing' when everything else blows up.
OMG. FISCAL CLIFF !
Build bigger buildings. I want plenty of height for those banksters to fall from.
Brave souls... how to bet on the downturn? AZO? Putrid momo bubbler with increasingly negative book value, at all-time highs, insiders about all sold out and twice as much debt as 2 years ago.
The Fed will support the equity market meltup until there is a catastrophe so large that it simply swamps their already bloated balance sheet. At that point, the currency will become a joke.
Thanks a lot, Alan and Ben.
And proxy risk on gauge (along with the EUR) USD/JPY has topped out, could mean that inflation/stagflation Asia could be on the USD buy up again, which will tighten liquidity (like end of 2012 and the start of 2013). It's hilarious that some commentators are not calling a stock market bubble. It's a crowded trade of leveraged longs, HFTs and expectation of Fed money prints and ECB bond/EUR buys = bubble.
And remember we are following the 1987 trade to a T (small correction start year April 1987/2013) then onward till Oct
History always repeats.
Study this chart:
https://www.tradingview.com/v/WwN6HHVe/
South American USD black market revs up again:
BUENOS AIRES--Argentina's black-market peso tumbled to a new low Wednesday as residents continued to scramble for dollars no matter the cost because of fears of a sharp devaluation following midterm elections in October.
Despite assurances from President Cristina Kirchner this week that no devaluation is in the works, the "blue" peso, as the black-market currency is called, plunged 37 centavos to ARS10.45 to the U.S. dollar, according to financial daily El Cronista.
The blue peso is trading at a spread of about 100% compared with the ARS5.215-to-the-dollar exchange rate on the regulated MAE foreign-exchange wholesale market.
The plunge in the blue peso was a clear sign that traders had scoffed at a tax-amnesty plan the government hopes will fuel an inflow of greenbacks to the dollar-hungry market.
On Tuesday, officials unveiled the controversial tax amnesty for Argentines if they invest undeclared U.S. dollars stashed overseas in domestic energy and construction projects.
Critics, however, say the plan is an ineffective method to try to stoke the nation's stalled growth and doubt it will lure Argentineans to repatriate much of the estimated tens of billions of dollars hidden around the globe.
Stocks also declined Wednesday, as the Merval index of leading shares slipped 0.7% to 4,038.23 points.
Shares of state-run oil company YPF SA (YPFD.BA, YPF) led the declines, giving up some of the 7% gain posted Tuesday. YPF shares lost 3.7% to close at ARS131.00 Wednesday.
The AA17 bond was unchanged at ARS775 while the dollar-denominated GDP warrant, a security whose performance is tied to economic growth, rose 2.5% to ARS53.
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929
http://www.cnbc.com/id/100718505
The bond markets will crash once global central banks stop buying debt, triggering a financial crisis much worse than the one seen in 2008, strategist David Roche told CNBC.
Roche, who has previously warned that "safe haven" government bonds are the most dangerous place for investors to be in, said Wednesday: "Yes it [a financial crisis] will happen and yes, it will be bigger [than the credit crisis]. Once you re-price the burden of the world's debt... the ugly truth will be revealed."
According to Roche, president of Independent Strategy, once the expansive quantitative easing programs initiated by Western central banks come to an end, sovereign bond yields, including U.S. Treasurys, German Bunds and U.K. Gilts, will spike significantly prompting a crash.
Yields on U.S. 10-year Treasurys have fallen more than 200 basis points over the past five years and are now around 1.8 percent. Meanwhile, U.K. 10-year Gilts and German 10-year Bunds were also trading near record lows on Wednesday at 1.8 percent and 1.29 percent, respectively.
"As long as the central bankers print money, the only way to have to distribute it is [for governments] to buy 70 percent of new bond issuance in these safe haven bond markets. As long as they go on doing that, the yields won't go up, and the day they stop, the yields will go up by so much we will have a financial crisis on our hands," he said.
Roche said the impact of a crash in the "safe haven" bond markets will be catastrophic for financial markets worldwide.
"You are looking at a massive capital loss on a mark-to-market basis for a lot of financial institutions in the world and for people who have put their savings into those bonds, which will hit demand and hit the real economy, because if wealth goes down people's optimism about the world economy will fade," he added.
In recent years, major western economies have embarked on expansive bond buying programs in attempt to prop up flagging growth following the credit crisis. But speculation over whether the U.S. Federal Reserve will end its expansive bond buying program, has risen this year. In the Fed's latest minutes, it emerged that several committee members were concerned over the risks of continuing its asset purchases for too long.
The end of QE has prompted concerns over how markets will cope unsupported.
http://www.cnbc.com/id/100720823
The stock market, which hit new all-time highs on Wednesday, could experience a crash within two years, bearish economist Nouriel Roubini said on CNBC.
"It could go on for another year or two," he said, speaking from the SALT Conference in Las Vegas.
I see frothiness going to end up in nasty boom and bubble in asset prices, followed by crash and a bust, not this year, not next year, two years from now."
On "Fast Money," Roubini cited a couple of factors: "Growth is slow. Earnings growth is also slowing down. Top line and bottom line are not as good as they used to be, but margins are high. They could correct somehow over time.
"But you have the gravitational forces of a slow economy leading eventually to correction, but then the levitational forces of QEs, zero policy rates, more money coming in the market, not just from the U.S. but other economies, is going to levitate asset prices."
Roubini said that those conditions could lead to "a generalized credit and equity and asset bubble next year or two, followed by a crash."
But, he added, "as long as the economy grows between 1½ to 2 percent and you have easy money, this market can go higher."