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Market Echoes June 2012 FOMC As Dow Swings Most Since Oct 2011
For the sixth day in a row, the Dow managed a triple digit gain/loss - the first time since Sep/Oct 2011 - as markets appear to playing out a perfect echo of last year's June FOMC meeting with a ~3% 4-day gain in the run-up to the decision only to give it all back in the next few days. In the same way as last year, despite the rally in stocks, VIX (hedging) is rising, credit is diverging (hedging), and bonds are bid (though this appears more a Taper-off trade this time). Today's volume was among the lowest of the year (even accounting for holiday trading days) but that didn't stop the Dow ended up within a Hilsenrath headline of its all-time highs (though VIX near YTD highs, credit near YTD high spreads, and bonds close to YTD high yields). Silver, gold, and copper were hit hard today (-1.8% on the week) as WTI surged back up to $98.50; the USD retraced back to unchanged on the week (JPY -1%); Treasury yields are now up 4-5bps on the week (unch today); and while stocks looked good off the Friday surge, the last few minutes today saw them give back some of the exuberance back as hedgers turned to sellers (helped by a smash'n'grab in HYG) but all-in-all, equity investors seem very confident that Bernanke won't let them down.
Sixth day in a row of triple-digit moves...
and this is what happened at last June's FOMC... when everyone it seemed was convinced QE3 was coming (and was disappointed).
But the last couple of days' exuberance in stocks is tempered by hedging in stocks...
and credit...
The USD is unchanged on the week as EUR is rising and JPY is weakening...
WTI surged as copper, silver and gold all fell in line on the week...
Charts: Bloomberg and Capital Context
Bonus Chart: The Great Recoupling...
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The only purpose for the pump is the ensuing dump. Probably just see another +1.5% across all markets (except gold) tomorrow though I'm sure.
'Equity investors'...how quaint. Hey do they have an ETF where I can actually invest IN 'equity investors' I wonder? Nah probly not.
These markets don't have a chance in hell. To taper or not matters not at this point. It's all down hill from today on. We are already in a bear market and few people realize it yet.
You are kidding right? The Fed's whole hope rides on Wall Street rising. They certainly aren't going to disappoint at this juncture. I think they add more easing and the S&P rises 100 points tomorrow. Don't fight the Fed!
How did that work out for Abe? He got the mother-fuckin'-orgasm for two or three months and then BAM! Fed is much too smart to replicate what Abe failed at. Afterall Japan is mererly the nuclear testing grounds for Ben Bernanke's escapades. Tomorrow they will annnounce an increase of 10% in QE. Markets will TANK. Tomorrow they will introduce a -10% increase in QE. Markets will tank.
We are finally at that catch 22 position that we all dreamed about. To QE or not to QE that is not the question - the question is when QE becomes a four letter word no matter how it's said. It's all DOWN HILL from today.
The only thing that would redeem the markets would be a MASSIVE increase in QE, like 10 fold. If we got $850 billion per month, THEN I WOULD GO LONG THE MARKETS. Other than that, this measley $85 isn't enough to get a hard on.
We NEED MOAR MONEY, LIKE MOTHERFUCKIN' MORE!
So your sayin i will finally breakeven on my long fas, tna, and iyt puts? How about my gld calls? been getting smoked in those as well. Not trying to be sarc. I've just been beaten down so many times i no longer have to will to get back up
You assume the actual goal of the Fed is a healthy economy through the wealth effect. This is what they say but might they be liars with less honorable intentions?
flacon,
Not sure about the near term - we're coming to the end of the month and end of half year. If Benny boy says the 'right' things tomorrow it could hold up for a bit longer. What do I know though in these 'markets'?!
DavidC
Either the Fed keeps buying at current or higher levels, and available tier 1 capital continues to dry up (queue liquidity crisis), or the Fed stops buying, and, well, we all know what happens there.
The only thing that will actually fix this is moar USG spending, and fast. Queue the war bonds.
I agree sheepdog but I think I may be all dumped out before that happens.
there are going to be massive swings every fed day. They love to take money off the amatures tomorrow on the fed day. I like to wait 30mins until after the announcement.
HERE IS A GOOD WAY TO PLAY THE FED DAY.
Dippity Doo Dah
<<< My oh My Someone is having a bad day.
ever notice how we get "hilsenrathed" right around the bottom of the November trend?
The June FOMC chart looks like a christmas tree.
i really fucking hate these asshole bankers on wall st. they can all die as far as im concerned.
its like, no fucking volume, and yet this market just finishes up 140 pts on no news.
its like they were pumping it up so if bernanke does disappoint tomorrow, the sell off would be from the 15,320 level rather than the 14,900 level.
its such a ponzi scheme and i really hope all these assholes get taught a lesson one day.
Can you believe we actually used to mock and laugh at Zimbabwe a couple decades ago? If anyone would have said 'We'll be doing the same but on a far larger scale by 2013' they'd have called you crazy.
Not doing anything like Zimbabwe. They were adding several zeros a week to their money.
Not yet...
Now tell us how you REALLY feel.
we don't need no stinking volume
The village idiots are out today buzz.
Long VIX And the quirkiness of Yahoo.
tOMMY sTOLPER?
Bennie and the Bets......
Hey kids, shake it loose together
The spotlight's hitting something
That's been known to change the weather
We'll kill the fatted calf tonight
So stick around
You're gonna hear electric music
Solid walls of sound
Say, Obama and Joey, have you seen them yet
But they're so spaced out, Bennie and the Bets
Oh but they're weird and they're wonderful
Oh Bennie she's really keen
She's got electric boots a mohair suit
You know I read it in a magazine
Bennie and the Bets
Hey kids, plug into the faithless
Maybe they're blinded
But Bennie makes them ageless
We shall survive, let us take ourselves along
Where we fight our parents out in the streets
To find who's right and who's wrong
"he's been there longer than he expected to be....." /sarc all of it.
We must be on the same wavelength, as I made a similar Elton John post a few weeks back:
B-B-B-Bennie and the Feds
Oh, these low rates are so wonderful
That Bennie, he's really keen
The Dow's electric moves
I just can't lose
You know I read it all in Time Mag-a-zine
B-B-B-Bennie and the Feds
Hahah awesome, i just heard the song on the radio and started singing Bennie and the Bets for some reason.
Sad to admit I had this on 8-track when it was originally released at age 11. Hope you're not quite as old :)
My my, hey hey
Low-volume shit is here to stay
There’s less to the picture than meets the eye
Hey hey, my my
Trading’s gone but it’s not forgotten
We’d make more money picking cotton
Now that it’s gone it may never come back
We're all into the red, and out of the black
It's like watching the heroin street addicts buzz around waiting for, and then getting their smack; then scurrying away as fast as possible once the smack is in hand.
still short, but nearing capitulation ><
Thank you Eclectic Parrot....SO funny
Thanks, Mom. Does Dad know you have a ZH handle ?
NSA Bird. Find another branch to land on.
Branches can be tricky. I'd prefer your non-vertical, gently sloping forehead.
No!!...and you are NOT to tell him. Daddy Parrot has enough on his birdbath.
Can we see your full profile picture???
Yep - the powers to be have jacked these markets beyond reproach - and the anger is evident here.
But out in the real world of fake, it's actually very positive. Euphoria at tops - renewed optimism on retracements.
http://bullandbearmash.com/chart/sp500-heads-higher-remains-close-channe...
The S&P500 is retracing - but major falls don't usually occur on news - they usually come by surprise.
/Obligatory ZEE PRICE STAABEELEETEE joke
Dear Tylers, Re: your 2013 FOMC SPY display, above
How is a SPY 1363 to 1315 a huge deal? 3.3% isn't trivial.
But, what about the move 1313_ 06/25/2012 to 1417_09/07/2013 +7.9% ?
We all have charting systems
What's your point here?