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S&P 500 Hits Record High As Tepper Turnaround Trumps Draghi Disappointment

Tyler Durden's picture




 

The initial exuberance over Draghi's actions (and promises) faded quickly with Treasury yields falling and the EUR surging back higher (to close at 10-day highs)... but thanks to sterling work by AUDJPY and some well chosen 'I'm not scared anymore' comments from David Tepper, US equities soared in a world of their own (as VIX dropped). Volume was also heavy (but the siz came on the downswing after the initial jerk higher from the ECB). The Russell 2000 soared ~2% (best day in 3 months), Treasury yields closed lower, the USD closed lower (as EUR surged) and unchanged on the week, and gold and silver jumped. VIX also helped to support stocks at it dropped modestly (but remains notably disconnected from the equity exuberance). NFP tomorrow... time to sell vol for sure!!

 

What's wrong with this picture? EUR (the most critical indicator of Draghi's ability to improve his region's competitiveness by any means) surged as he disappointed... but US equities couldn't get enough...

 

Draghi disappoints - EUR pushes up to 10-day highs

 

Who couldanode that EUR would rally?

As we noted earlier, absent launching full scale QE, which it won't, the ECB's announcement will be a disappointment which means the EUR will ultimately move higher after a kneejerk lower as the market forces Super Mario to do even more next time. As Bloomberg adds, a cut in refi and deposit rates is fully priced in and latest price action suggests investors brace for disappointment if ECB stops short of signaling asset purchases or other liquidity measures to combat deflation

As an FYI - Russell & Nasdaq are up 6% from the lows the day after Tepper said

  • *SALT: TEPPER SAYS DON’T TO BE TOO ‘FREAKIN LONG’
  • *SALT: TEPPER SAYS I AM NERVOUS, IT’S NERVOUS TIME

and now

  • *TEPPER SAYS MARKET CONCERNS HAVE EASED, CNBC SAYS

 

 

The Russell was on fire... it s best day in 3 months...

 

AUDJPY (and NZDJPY) were in charge as EUR and USD had their own Draghi issues to deal with...

 

VIX remains decoupled as it can't break to record-er lows (even as realized vol leaks to record lows)... todday's action did have high correlation to VIX though...

 

Treasuries decoupled dramatically...

 

The EUR strength pushed the USD Index back to unchanged on the week...

 

Gold and Silver pushed higher and oil dipped and ripped...

 

 

Charts: Bloomberg

Bonus Chart: Goldman's June 2015 1950 Target for the S&P 500 is within 9 points... 11 months early...

 

Bonus Bonus Chart: Did The Market Just Discount The Entire Taper'd Fed Balance Sheet?

 

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Thu, 06/05/2014 - 16:08 | 4827881 g'kar
g'kar's picture

Nah, it was the FED buying $3 billion.

Thu, 06/05/2014 - 16:20 | 4827921 lordylord
lordylord's picture

How high do taxes and inflation have to be before people get angry?  Or does your average idiot think an Obama third term will fix everything?  I'm thinking it might be a good time to get blasted on riot juice pretty soon.

Thu, 06/05/2014 - 16:26 | 4827943 quasimodo
quasimodo's picture

There is the whole problem....so many average idiots that don't think, period.

They have been boiling the damn frog for so many years, at some point it will just liquify and then it's all over. Who needs to worry about the pissed off masses when 3 out of 4 men are obese or overweight?

Last time I checked those "mobility devices" didn't come equipped with hyper drive or any type of fire power. Perhaps if you dangle a Twinkie in front............

Thu, 06/05/2014 - 16:30 | 4827950 lordylord
lordylord's picture

"Who needs to worry about the pissed off masses when 3 out of 4 men are obese or overweight?"

Excuse me, but...http://4.bp.blogspot.com/-UcedtNmdhRU/Uab3PCvwfKI/AAAAAAAAPwM/snRSLQYoue...

Thu, 06/05/2014 - 16:33 | 4827956 12ToothAssassin
12ToothAssassin's picture

Im sure this sounds newb because I am when it comes to anything past throwing darts at 401k funds but can anyone share a link on how to trade .vix ? Are there ETFs for it? How can you directly profit from .vix volitility?

Thu, 06/05/2014 - 16:44 | 4827979 lordylord
lordylord's picture

"How can you directly profit from .vix volitility?"

You can profit off of anything.  e.g. dog fights, women's bodies, homeless boxing, US Constitution's death, etc.  Sorry I didn't answer your question.

Thu, 06/05/2014 - 18:55 | 4828369 Say What Again
Say What Again's picture

My data feed shows an intra-day print down around 9 for VXN (Volatility for the NASD).

I know it didn't close at that level but, did the VXN really get that low today?

Thu, 06/05/2014 - 18:55 | 4828370 Say What Again
Say What Again's picture

My data feed shows an intra-day print down around 9 for VXN (Volatility for the NASD).

I know it didn't close at that level but, did the VXN really get that low today?

Thu, 06/05/2014 - 17:33 | 4828135 There is No Spoon
There is No Spoon's picture

vxx uvxy tvix xiv

some also have options. the long vix etn's are structurally designed to decay so be extremely careful if you're going long vxx uvxy tvix. if you buy them buy puts to protect your downside. don't hold them too long.

i've been shorting vxx when it moves up a decent amount but now that the vix is under 12 i'm not short. the safest simplest way to trade the vix right now would be to buy a call spread on the vix, not on the etn's, expiring late in the year. these etn's are designed to fail so buying puts on the etn's and the call spread on the vix gives you exposure to both sides with limited risk.

Thu, 06/05/2014 - 16:08 | 4827882 HedgeAccordingly
HedgeAccordingly's picture

had nothing to do with Tepper.. more to do with supply.demand .. but.. 

– Deutsche Bank Co-CEO Anshu Jain: ‘Europe is stable now…the ECB has done a lot to createstability” http://hedge.ly/1pvYOQi

True?

 

Thu, 06/05/2014 - 16:19 | 4827924 john39
john39's picture

a corpse is pretty stable as well.  a good thing?

Thu, 06/05/2014 - 16:30 | 4827952 BrosephStiglitz
BrosephStiglitz's picture

Right and cardiographs register no volatility.

Thu, 06/05/2014 - 17:32 | 4828130 SunRise
SunRise's picture

The cardiograph and the olfactory do not lie.

Thu, 06/05/2014 - 17:32 | 4828131 SunRise
SunRise's picture

The cardiograph and the olfactory do not lie.

Thu, 06/05/2014 - 22:03 | 4828831 TheReplacement
TheReplacement's picture

Are you sure it isn't corps, man?  I always get those confuzed.

Thu, 06/05/2014 - 16:08 | 4827883 savedeposit
savedeposit's picture

So what !

In the end its al about value not about some crappy manipulated index

Thu, 06/05/2014 - 16:09 | 4827886 SheepDog-One
SheepDog-One's picture

Tepper not skeered! All safe to resume BTFATH's yay!

Thu, 06/05/2014 - 18:20 | 4828267 CIABS
CIABS's picture

"I am nervous, it's nervous time" (buys SPY and QQQ calls)

"I'm not scared anymore" (holds SPY and QQQ calls)

"[silence]" (sells SPY and QQQ calls, buys SPY and QQQ puts)

"I am nervous again; very nervous" (holds SPY and QQQ puts)

...

Thu, 06/05/2014 - 16:09 | 4827887 maskone909
maskone909's picture

everything is just super duper dandy!  no need for an economy anymore. no need for jobs.  no need for revenues!  fuckit im headed to the hummer dealership to finance a no money down 10 year loan soccer mom mobile

Thu, 06/05/2014 - 16:18 | 4827916 Squid Viscous
Squid Viscous's picture

LOL don't forget to attach "Support our Troops" sticker before she guzzles 10 mpg and drives like she owns the road... 

Thu, 06/05/2014 - 16:11 | 4827896 bam
bam's picture

SPX 3000, 2015 Dec.

Beef prices $30/lb, 2015 Dec.

Joe: "Why are beef prices so high?" 

Yellen: "Why didn't you buy stawks?"

 

Thu, 06/05/2014 - 16:31 | 4827953 NOTaREALmerican
NOTaREALmerican's picture

Inflation protection for the Elysium Class and inflation for the things the Trash Class needs.  

Thu, 06/05/2014 - 16:16 | 4827897 CaptainSpaulding
CaptainSpaulding's picture

A big hats off to Ann B Davis aka Alice on The Brady bunch. R.I.P...I will see her soon ( Next month )

Thu, 06/05/2014 - 16:14 | 4827902 ebworthen
ebworthen's picture

Hey, SEC Chair White said the markets aren't rigged and investors are better off now than before.

Buy, buy, buy!

My precious.

gollum!

Thu, 06/05/2014 - 16:13 | 4827903 Squid Viscous
Squid Viscous's picture

same shit every day everything "decouples" from stocks, ZH fail - again

Thu, 06/05/2014 - 18:48 | 4828342 disabledvet
disabledvet's picture

Explain nickel to me.

That would be the PRICE of nickel.

Thu, 06/05/2014 - 16:13 | 4827905 mrdenis
mrdenis's picture

Teppers trading room .........http://i.imgur.com/n6KY17J.jpg

Thu, 06/05/2014 - 16:18 | 4827920 ebworthen
ebworthen's picture

"Thanks FED!  Tell the next generation and Mom and Pop to go fuck themselves!"

"Where is Jon?  Corzine should be here!"

"Pass the cigars and scotch around!"

"Har!"

Thu, 06/05/2014 - 16:16 | 4827915 valley chick
valley chick's picture

And when does the bank runs start in euro wonderworld?  Hmmmmm......

Thu, 06/05/2014 - 16:38 | 4827976 dracos_ghost
dracos_ghost's picture

Was thinking the same thing. Maybe no coincidence about "cashless" society jawboning from Bilderbergers?

Thu, 06/05/2014 - 16:19 | 4827922 NDXTrader
NDXTrader's picture

Bonds aren't buying it, FX isn't buying it, I'm not buying it...but when are we going to stop pretending any of that matters? The central banks are only disclosing a fraction of the funny money they are pumping into the system, the inflation numbers are rigged and they are actively begging people to buy stocks. There is no risk - if we were to get a 5% "correction" they would simply not allow it to go further. And guess what? They can do it. It will all end terribly, but that might not be for another 5, 10, 20 years.

It does crack me up that anyone would put any weight on the opinion of a guy (Tepper) that was publically dead wrong just a few weeks ago. He's got as much credibility as Gartman

Thu, 06/05/2014 - 17:05 | 4828061 huggy_in_london
huggy_in_london's picture

surely at some point the taper matters.  I keep saying that to myself (inbetween cursing over the state of my accounts mtm)

Thu, 06/05/2014 - 16:21 | 4827923 spastic_colon
spastic_colon's picture

ZH gotta love ya...even though your analyses are mostly correct it doesnt mean markets are following any rational fundamentals....unfortunately you have fallen firmly into broken clock land.

 

PS - Abe meant to say "buy all of the split AAPL shares possible in pensions" cuz he gets a big bonus from the US if they do.

Thu, 06/05/2014 - 16:36 | 4827966 NotApplicable
NotApplicable's picture

I read the article TWICE and I still have no idea how you came to the conclusion that Tyler is saying "markets are following any rational fundamentals."

Methinks your imagination is getting the best of you.

Thu, 06/05/2014 - 16:20 | 4827925 youngman
youngman's picture

I feel a little better today..at least gold and silver rode the coattails of the market a little...must of been a sympathy buy

Thu, 06/05/2014 - 16:21 | 4827930 Kreditanstalt
Kreditanstalt's picture

Who is this "Tepper"?  Never read anything he's supposed to have said...

Must be some alternate universe...

Thu, 06/05/2014 - 16:38 | 4827977 NotApplicable
NotApplicable's picture

He's just the guy that made a $3.5B salary last year running a so-called hedge fund.

Besides, he ain't got time to write. He just struts around on CNBS occasionally.

Thu, 06/05/2014 - 18:53 | 4828361 Kreditanstalt
Kreditanstalt's picture

I quit watching ANY TV years and years ago...

Thu, 06/05/2014 - 16:21 | 4827931 timmeh
timmeh's picture

sell the ramp - and wait for a dump

buy the dip - and go to sleep

Thu, 06/05/2014 - 16:26 | 4827945 NOTaREALmerican
NOTaREALmerican's picture

I think we need some more music from Global Death Cross.  

Thu, 06/05/2014 - 16:31 | 4827957 luna_man
luna_man's picture

 

 

Go ahead, admit it...MY MAIN MAN, has the finger on the pulse!

 

where would we be without YOU

Thu, 06/05/2014 - 16:31 | 4827958 Tsar Pointless
Tsar Pointless's picture

Buy in June, stocks to the moon!TM

Thu, 06/05/2014 - 17:00 | 4828041 savedeposit
savedeposit's picture

Come one push it a little more higher al they way to infinitieeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee !

Thu, 06/05/2014 - 18:36 | 4828307 Quantum Nucleonics
Quantum Nucleonics's picture

Did anyone check if Tepper was blinking Morse code while he was giving his hostage video recant?

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