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S&P Fails To Hold Record Highs As Gold Outperforms
US equities tagged new highs early in the day-session sparked by USDJPY ignition and rotating to support from AUDJPY as stops were run and exuberance over shitty data reigned. "Most shorted" stocks dramatically outperformed early on providing the sacrifice required but while bond yields rose from their open last night, they end the day practically unchanged (10Y +1bps); The USD rallied into the open but EUR and AUD strength cracked it back to practically unchanged by the close. Copper flailed (on slowing China construction fears) but oil, silver, and gold all rallied around 1% on the day (though rolled over in the afternoon). VIX dropped but held 14% and remains notably divergent. Credit rallied but remains a laggard compared to equity exuberance. Stocks tanked into the close; catching down to VIX, credit, and USDJPY - what a "market" with the S&P losing its highs and closing red for 2014 once again.
S&P futures plunged back to VWAP towards the close - then plunged at the close...
The S&P 500 managed to get green in 2014...before giving it back into close - the S&P has still not closed positive for 2014 so far.
Thanks to USDJPY then AUDJPY...
And another short-squeeze...
VIX did drop today but found support at 14% and is still notably divergent from stocks...
Credit rallied on the day but note that stocks fell back to their reality from the stop-running highs early on...
Treasuries seem unimpressed by the equity exuberance...
The USD closed unchanged (as Europe's EUR weakness reversed into US's EUR strength)... note AUD strength...
Gold and Silver gained around 1% on the day (outperforming stocks) and WTI gained... but they rolled over a stocks slipped in the afternoon...
It seems Bob Pisani nailed it at around 1030ET - "there's no fundamental reason why we are up 200 points today" - indeed, Bob...
Charts: Bloomberg
Bonus Chart: It seems BofA's earlier call to sell Nattie... worked...
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It appears the markets are expecting the bad economic news to mean more money printing.
Good = Bad and Bad = Good
Up is down but MOAR is MOAR
"No one saw this coming...."
I am playing a SPY GLD spread trade. Long GLD, short SPY. I also picked up some PCLN puts today. We'll see how it works out.
What's a trillion between friends?
Next up $1620 barring a deflationary collapse of the world. War is good for us goldbugs :)
A Golden Era of Breakouts and Panic Purchasing has Begun
Yeah...right up there with natural gas trading.
"Leveraged long and playing the war effort."
Even better "just short the whole cuz it's all bullshit."
I want to say we have something new here but Wall Street was open from 1940-1945. So sure...you can trade "as the battlefield goes" but I wouldn't recommend it.
As a reminder "the stock market was closed for the duration of World War I."
The only "liquidity" I see here is Government.
Plan A is to make sure everyone is on the payroll.
Interestingly that may devolve into a State and local function as "the War Effort will now be run by the Banks."
So sure...gold.
But when they own the Government (can't keep that spending under control?) it's all about free cash flow discounted. The only "mean" being reverted to is on the battlefield now.
If you're doing it in London, it's 100 trillion 5 minutes later.
inching closer and closer to a major market selloff.
but...everything is macro/global bullish according to the CNBC lunch-time lizard faces and pony-tailed clowns...?
you'll be proved right one day, let's hope you haven't blown up first.
meh. "More canon fodder for the war machine." Move along.
Buy Vix till 50%
or buy VXX til 50% of what you had?
Shorting VXX is the single best trading strategy their is
You have not been wrong.
Until it isn't. Those % moves up are ginormous when they happen and it's coming. UVXY, HVU even better.
http://scharts.co/1k6p3do look at all the times the 15-day rate of change % is 20, 30 or 40%. That's not something you want to short. Timing is everything
Ahh, gold, my gold...
A new book!
"Review of Gold: The Race for the World's Most Seductive Metal"
http://tinyurl.com/mmr6dpp
pump up the volume
http://www.youtube.com/watch?v=yriGVkfYsKU
I still don't understand why the USDJPY is correlated to the S&P?
It's the yen carry trade. As long as the USD/JPY exchange remains stable hedge funds can borrow in yen at 0 and buy U.S treasuries. With the treasuries they have a lot of options. One of which is to use as collateral to lever up and buy stocks.
This is of course a highly stable situation. Leverage on top of leverage on top of leverage. Supported and approved of by your friendly local politician.
And people wonder why the world is so fucked up.
Conversion of cheaper Yen into equities. Carry trade.
Risk on/ Risk off
"Everyone's got a plan until they get punched in the mouth."
With no debt ceiling now it's money printing until the US dollar crashes,
Soon QEen Yellen will reverse the taper and print like there is no tomorrow.
Tapering was a dog and pony show for treasury holders.
Excellent point about it being just a dog and pony show for someone
Well we closed 10 points off the all time high so BTFD!
I prefer dirty cash
http://www.youtube.com/watch?v=Rg_L22NvRsg
Physical gold is NOT returning to GLD and other ETFs despite the price rally and the MSM propaganda. In fact it has dropped overall by 61 tons.
http://www.silverdoctors.com/the-gld-two-step/
How exciting, gold stayed exactly the same compared to the dollar yet again! Can't wait till next week when gold is worth exactly the same value it was worth 6000 years ago.
S&P is rolling over. It would have to have hit 1900 by mid February to continue the trend and it wasn't able to. So down is the next direction du jour.
Next month looks like make or break. If the Fed gooses it, I dump my vix position and 'm all in silver and shitty trash stocks. If not, I remain in cash.
Let the commencement of nonsense... beginulate!! http://flic.kr/p/enJ7Cs
The whales are taking profits, rotating in and out of sectors, while maintaining the euphoria.
I pity anyone with money in a retirement account or pension fund.
Tech. bubble part two, crash/bailouts part two coming.
Agreed. Stock are overbought and look toppy. A reversion to at least DJ 14k is at hand. And I write 14k only because if that breaks I expect the Fed to Un'Taper. If they defy my expectations, watch out below.
natural gas can't hold so only gold will?
"Put on your crazy pants" dude.
Gold continues to break from the middle of its recent range. It will prove to be long term bullish if we get to the $1450 range, and the faster the better.
I believe we get there by March 21st. When we do then we will have to look at the macro news to see if gold can break out of this last year's range.
I don't know on what basis people make these decisions, but if gold responded to fundamentals, it would have broken through $2k and kept right on going.
Price is relative due to paper manipulation. What matters is ounces available vs physical demand. This is what will trigger a reset and prompt fundamentals to clear the leveraged debt/options in the form of naked shorts that are currently against gold.
- Charles Bukowski
Due to high input costs and low output mining has stalled. How long before demand siezes physical gold and demands delivery? That is the question that will tell us when gold catapolts to prices not that possible by the status quo.
I don't know on what basis people make these decisions, but if gold responded to fundamentals, it would have broken through $2k and kept right on going.
Fraud is a valid fundamental in economics, and that's why it didn't the first time. It will next time. 3500, drop to 2500 shortly after.
Gold will continue to be long-term bullish until governments are solvent, bank accounts pay interest rates beating inflation pressures on food & energy.
With the level of gearing in the global system, one would think more and more investors and traders will be moving to gold. Alasdair Macleod wrote a great piece looking at global fiat currenices in this regard. "Alasdair Macleod: All currencies are an inverse pyramid based on the dollar" The Doc and I interviewed him last Friday as well, and he had some on-point analysis about global gold flows -- China in particular. It's certainly not news to most of you, but it's worth reiterating the basic point that the ETFs, private vaults, exchange vaults have all been raided to the point that, when adding the last factor of multiple title leasing by Western central banks, there really isn't enough true, physical gold around to keep a lid on price. It's going to be a "managed retreat" from here on out. If you want to listen to our interview with Alasdair, click here.
Eric Dubin, Managing Editor, The News Doctors
Leave the casino. Gest some real things.
http://www.thewarningsecondcoming.com/second-seal-world-war-3/
I mean "get".
lost money in stocks long time ago, been liking gold and silver from even longer time ago, never thought I would buy another stock but I bought tvix big time yesterday. 5 yr anniversary of the 2009 low! rollover beethoven
https://www.youtube.com/watch?v=Ohy4JoyThis
mountain!! bitches
I'm with GroundHogDay (see above). I bought the tvix 18 mo ago and after two reverse splits I'm broke. Shorting would have proven to be a more profitable move.
but when you short you can keep getting margin calls until you cry uncle, it can move very fast. If you use no margin, a leveraged etf like spxu, faz, vxx, hvu, uvxy, you can limit the total $ to go in (and never go in so hard you could ever go broke) and now it's all gravy (or a loss you can live with).
I was trading options between jobs with no income & still never went broke. You just never bet it all.
Just because it's a casino doesn't mean you actually bet it all on red, even if you're sarcastically yelling 'bet it all on red!'
+1 for awesome videocode.
I was sure it was a fake code but... it's a legit youtube video code.
"Most shorted" stocks dramatically outperformed
Silly, nothing lures in the bag holders more than seeing the shorts get squeezed so they can feel smug, and earn a pat on the head for being so sensible.
Depends on timing. If you notice it & trade it before mentioning it, no, it's quite sensible.
double post
HVU is 11x inverse to the S&P500.
USLV is 3.92x bullish with silver.
It's been suggested to me that since USLV is 10x the price of HVU perhaps not to focus so much on USLV.
However... we can't be sure the market goes down a decent amount with silver (and gold) going up, at the same time.
Right now I'm looking at c=1/2818 (today), so silver3.92 x c=USLV
I'm seeing HVU1/11xSPY = 220 so HVU should have been lower for the SPY prices today (which is a good proxy for S&P500, it's linear though decaying slightly over time).
http://flic.kr/p/iwHcZZ is the chart showing HVU decay in the ETF with the constant involved there (which is 216 to 219 normally, 220 today, or 220x75 = 16500 as shown on the chart's scale).
For USLV I now have these slides:
flic.kr/p/kpoT2k slide 1 : regression (power) trend R2 = 0.98 USLV = silver3.92 / 2364.56
flic.kr/p/kppK2Z slide 2 : projections with & without ETF decay
flic.kr/p/kprn3f slide 3 : ETF decay on factor vs date
Looking at the ETF decay slide, showing the constant changing, let's say the 2800 number ends up being as high as perhaps 6000.
If that's the case then for silver=50 perhaps 503.92/6000 = 761.75/oz silver is a fair argument, rather than 1632.32/share.
Decay is visible in the USLV slide.
Looking at the ETF decay slide, showing the constant changing, let's say the 2800 number ends up being as high as perhaps 6000.
If that's the case then for silver=50 perhaps 503.92/6000 = 761.75/oz silver is a fair argument, rather than 1632.32/share.
Decay is visible in the slide.
So far decay in HVU is not visible in measuring the constant, except in the past, not right now.
That being the case let's stick with (219/SPY)11 = HVU.
Further with USLV being roughly 10x the HVU price, though one is cdn$ one is USD, let's now look at what 10x = 761.75 gets you which is 76.18 / share HVU rather than 1 share USLV using the very decayed performance (lower share price) for the projected future.
What SPY price goes with this? (219/76.181/11)= 147.696. Therefore if SPY can hit 147.70 faster than silver can hit 50 with a very decayed equation (constant 1/6000) then HVU beats out USLV.
Then again... I'd still like to have a good balance of both.
1000000 (yes, 1 MEEELYUN) = silver3.92/6000 : silver=312.195
or 1000000 = silver3.92/3000 : silver= 261.597
or 1000000 = HVU = (219/SPY)11 ; SPY=62.372
Much more reasonable:
1000 = USLV, silver = 53.59 (decayed)
1000 = USLV, silver = 44.324 (current)
1000 = HVU, SPY = 116.87, not unreasonable given this http://flic.kr/p/enJ7Cs which I interpret to mean SPY could easily slam to 80 or 100.
Projections based on curve fitting to data is all fine and good but does not adequately predict FED policy and certainly does not include black swan events.
"Cash on the balance sheet."
I mean it is MASSIVE right now.
With interest rates at or near zero and a simple savings account giving you one percent?
"Long the contracting division" all right...but this ain't Fed Ex.
Tesla at 400 bucks a share is more like it.
Turbine engines look good to me as well...but that's about it.
It does when you look at what happened to other 'black swan' events. In the end it all comes down to hoocouldanode and we find out all sorts of people did.
That looks good except for one fact, the S&P will never again trade below 1700.
Except it certainly will and must. There is but one alternative: print so much money the currency itself ceases to exist. I understand this risk & while it means no payout on my paper it also means the physical gold & silver I have, along with every other tangible like meds, tools, weapons, food, water, will be a massive benefit relative to those who stockpiled none.
Every situation, every outcome for which the US dollar is a valid currency will and must end this way: the valuation must drop because there is no value. There is only credit in the form of margin, of printed money, of rehypothecation & there is no infinite lifespan for those activities. The only thing that ended the last period like this was world-war but the next world-war can not ever be the same. Too many aggressive & non-cooperative agents in such a game are stocked to the tits with nuclear & biological weapons, so you will never see a massive Dow spike from decades of victory over other continents. Instead it would be The Road and then the end of humanity.
That means NO SPIKE which means EPIC FAIL, and the choice is only which variation of epic fail: stock market failure or currency failure. The decision tree's been sharply pruned & one of those outcomes MUST Happen. I'm prepared for both.
The Australian Dollar (Aussie) is not one of the currencies used in setting the US dollar index.