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"Good" News Sends Markets Into Schizophrenic Dysphoria

Tyler Durden's picture





 

UPDATE: Bond And Gold Weakness has been unwound and both are now higher as the USD retraces most of its gains

 

Stocks initial knee-jerk "good news is bad news" reaction was a 0.5% plunge in prices and the rest of QE-sensitive assets also reacted in a "taper" way with gold dropping, USD soaring, and bond yields spiking.  But the USD strength implied JPY weakness and that just provided the momo ignition for carry traders to lift stocks 1% straight up as the heads-I-win, tails-you-lose trade continues. Gold has retraced some of its losses but the USD and bonds are stil under pressure as the US open approaches.

 

 

and this is why stocks are jumping so happily (for now)... AUDJPY leads the way...

 


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Fri, 12/06/2013 - 09:59 | Link to Comment maskone909
maskone909's picture

And they say bitcoin is volitile

Fri, 12/06/2013 - 09:59 | Link to Comment So Close
So Close's picture

How the fuck can SPY be positive if taper is supposedly more likely?

Fri, 12/06/2013 - 10:04 | Link to Comment spastic_colon
spastic_colon's picture

SPY would have been up 700 points if the number was below expectations.....priced in / s

Fri, 12/06/2013 - 10:03 | Link to Comment MythicalFish
MythicalFish's picture

You didn't get the memo dude. There's not going to be any taper. Ever. Think Brian Hunter without a risk manager. You think he's gonna sell out of his darling monster Treasuries long? Bwahahahaha.

Fri, 12/06/2013 - 10:12 | Link to Comment LawsofPhysics
LawsofPhysics's picture

There can't be any taper, the math makes that impossible.  Baring a debt jubilee or "wealth tax" of course...

hedge accordingly.

Fri, 12/06/2013 - 10:25 | Link to Comment asteroids
asteroids's picture

ZIRP also means that cities and pensions and possibly a state or two will go bankrupt. It's just a matter of time.

Fri, 12/06/2013 - 10:02 | Link to Comment Max Damage
Max Damage's picture

With this sort of shit, the market is best left to the scum and their computers. Nothing makes sense in the twilight zone, known as "The Markets"

Let them feed off each other

Fri, 12/06/2013 - 11:09 | Link to Comment webspin
webspin's picture

Scum? You're just to stubborn to realize you've missed the greatest bull run of your life time.

Fri, 12/06/2013 - 10:02 | Link to Comment buzzsaw99
buzzsaw99's picture

lulz

Fri, 12/06/2013 - 10:03 | Link to Comment LawsofPhysics
LawsofPhysics's picture

TPTB must get more sheep into the "market"...

Math and confidence/credibity are not on their side...

hedge accordingly...

Fri, 12/06/2013 - 11:10 | Link to Comment LookingGoodBillyRay
LookingGoodBillyRay's picture
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Fri, 12/06/2013 - 11:23 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Ah yes, if only my business could use "mark to fantasy" accounting.

Fri, 12/06/2013 - 10:05 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The market dysfunction is not the disease, but rather just a symptom of the disease. The problem lay within and until we not only recognize this but accept that we are the problem and not the victim it will only get worse. The market psychosis reflects our growing psychosis.

Fri, 12/06/2013 - 10:05 | Link to Comment Yen Cross
Yen Cross's picture

   lol> The aud spikes down 100 pips then reverses back over 100pips above the overnight highs on the 1 minute chart.

Fri, 12/06/2013 - 10:07 | Link to Comment Grande Tetons
Grande Tetons's picture

Fast move on the AUD/JPY. Piece of shit Yen. 

Fri, 12/06/2013 - 10:12 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Someone made a large profit, it just wasn't you.

Fri, 12/06/2013 - 10:18 | Link to Comment Grande Tetons
Grande Tetons's picture

Not boasting. Just sharing ideas. I have been upfront when I have has my ass handed to me.  If the Yen continues to plummet I just think the AUD or the KIWI represent the best value.  

Fri, 12/06/2013 - 10:28 | Link to Comment Yen Cross
Yen Cross's picture

  I didn't even have any trades open.(closed my aud longs when N.Y. closed ) I know better before EOY "Kabuki Theatre" events, to let the dust settle then get in.

Fri, 12/06/2013 - 10:35 | Link to Comment Grande Tetons
Grande Tetons's picture

I hear you there. It seems as though the Yen might be the first to go full toilet paper....asuming no big risk off move. Even then..that would only by it more time. 

Fri, 12/06/2013 - 10:59 | Link to Comment Yen Cross
Yen Cross's picture

    If the Bernankster has a dovish Fed. meeting after these numbers, the ¥ is going drop like a rock! The irony is that the dollar will probably sell off and yields will come back in on 10s. Things that typically cause the yen to strengthen vs usd.

    We know it's all about that POMO liquidity that keeps things rolling though.

Fri, 12/06/2013 - 11:11 | Link to Comment Grande Tetons
Grande Tetons's picture

I think the 9th is a double POMO...I have to check...if so..I will just raise my stops to BE over the weekend and see what idiocy occurs on Monday. 

Dovish Fed? Is there any other kind? 

Fri, 12/06/2013 - 10:56 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Hey, it wasn't me either.  I appreciate any and all insight, but you know there is another market behind this curtain, one that we don't have access to.  Confidence is key, the earth has never experienced a simultaneous a crisis of confidence in fiat/currency.   The last time this happened, in relatively small part of the world, we had a world war that leveled europe and killed over a hundred million.

Hedge accordingly.

Fri, 12/06/2013 - 11:02 | Link to Comment Yen Cross
Yen Cross's picture

  It's all good LoP. I always appreciate your input. I'll just keep stacking my fiatski procedes in P.Ms.

Fri, 12/06/2013 - 11:07 | Link to Comment Grande Tetons
Grande Tetons's picture

Same page LoP, YC.....I trade this shit to grab more PMs. Not sure, if it will help much when the system crashes...but hey...I have to do something. 

Fri, 12/06/2013 - 10:04 | Link to Comment Charles Nelson ...
Charles Nelson Reilly's picture

this is fucking insane!

Fri, 12/06/2013 - 10:10 | Link to Comment SheepDog-One
SheepDog-One's picture

This is just retarded.

Fri, 12/06/2013 - 10:13 | Link to Comment firstdivision
firstdivision's picture

Taper trades going to be hitting soon.  The algos don't know what the fuck to do with the number, the humans that hit the buttons do. 

Fri, 12/06/2013 - 10:11 | Link to Comment RealityCheque
RealityCheque's picture

So this is what "full retard" looks like...

Fri, 12/06/2013 - 10:12 | Link to Comment wisehiney
wisehiney's picture

MANDELA!

Fri, 12/06/2013 - 10:15 | Link to Comment MythicalFish
MythicalFish's picture

Is it the same number and the same move as last month? Can't be, right? Gotta take more meds..

Fri, 12/06/2013 - 10:16 | Link to Comment iLiquid
iLiquid's picture

The market is struggling to discount its own inability of discounting.

Fri, 12/06/2013 - 10:18 | Link to Comment SystemOfaDrown
SystemOfaDrown's picture

Time to switch conversation on how much, or level, of tapering they're going to implement. Suggest only deceasing 5B a month for next 17 months. These Market addicts can't go cold turkey. Need to wean them off slowly.

Fri, 12/06/2013 - 10:21 | Link to Comment Bosch
Bosch's picture

Remember that elaborate explanation Bernanke gave back in June for how the tapering process would play out? He said that by the time bond-buying was down to zero, the unemployment rate would be at .... 7%,

Of course, Bernanke and others later played down the  idea of an unemployment rate trigger for tapering, as they realized that the indicator was distorted by a falling participation rate. But this doesn't get away from the fact that his use of that target was way off. To end the year at 7% and the Fed not having taken a single dime off its bond-buying would underscore how bad a communications blunder that was. 

So, here's one more reason why I think the Fed will start tapering this month: it needs to save face. "

 

http://blogs.wsj.com/moneybeat/2013/12/06/live-from-new-york-its-jobs-friday-7/?mod=WSJ_LatestHeadlines

Fri, 12/06/2013 - 10:23 | Link to Comment Bosch
Bosch's picture

In other words....Yeah, um, we, um, got this?

Fri, 12/06/2013 - 10:26 | Link to Comment SheepDog-One
SheepDog-One's picture

Good news everyone! Now get out there and buy more shit on credit!

Fri, 12/06/2013 - 10:31 | Link to Comment razorthin
razorthin's picture

Hey, there's some Xmas shopping to be done, bichez.

Fri, 12/06/2013 - 10:38 | Link to Comment The worst trader
The worst trader's picture

S&P back at 1800, all is well.............all that matters

Fri, 12/06/2013 - 10:47 | Link to Comment FiatFapper
FiatFapper's picture

Why does SP500, AUD, USD and gold all go up at the same time, aren't they all meant to be opposites?

Fri, 12/06/2013 - 11:07 | Link to Comment Ghordius
Ghordius's picture

read again Tyler's take "But the USD strength implied JPY weakness and that just provided the momo ignition for carry traders to lift stocks 1% straight up as the heads-I-win, tails-you-lose trade continues."

a rising tide lifts all boats... except the submarine at anchor

Fri, 12/06/2013 - 13:35 | Link to Comment disabledvet
disabledvet's picture

"problem of correlations all approaching one." been true for many years now...until this year when gold and silver got annihilated and interest rates spreads blew out. everyone has gone rushing into the mining and gold space..."finally a sale price"...but to me the only non-correlated asset to all this momo monkey hammering remains treasuries. the only thing being produced in this recovery are the biggest defaults in American history and truly amazing build ups in inventory levels. natural gas has had an impressive spike here...but distillates still look WAY over indulged here. true...simply giving cars away might help produce greater demand for gasoline. but i think Tesla is the real deal...along with Space X (which is private btw) and Solar City. Korean auto makers are going all in on fuel cells next year. Energy prices look set to collapse in Los Angeles next year. http://www.youtube.com/watch?v=1GAKOLOnfV4

Fri, 12/06/2013 - 12:01 | Link to Comment Brazen Heist
Brazen Heist's picture

Markets plunge to good news only when they smell bullshit.

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