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Marketwide Short Squeeze

Tyler Durden's picture




 

It appears the US open this morning was accompanied by a significant long-capitulation that slammed "most shorted" stocks down almost 3%. Since then, thanks to a USDJPY liftathon, "most shorted" stocks have levitated back to unchanged and dragged the broad equity markets back up too. The question is - now that the flush has been unwound... what happens to the market?

 

Dump and pump...

 

Thank you USDJPY...

 

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Thu, 07/10/2014 - 13:57 | 4944194 PartysOver
PartysOver's picture

Just another day when reality is what you want it to be.

Thu, 07/10/2014 - 14:06 | 4944240 pods
pods's picture

I pulled a little short squeeze last night. Helps when you are really excited and..

nvmnd

Thu, 07/10/2014 - 14:34 | 4944381 max2205
max2205's picture

Btfd till August

Thu, 07/10/2014 - 14:07 | 4944242 maskone909
maskone909's picture

i wonder when Belgiums next 500 billion treasury purchase is?

Thu, 07/10/2014 - 14:17 | 4944285 Ham-bone
Ham-bone's picture

Has been made clear that the "markets" are now maintained as part of a National Security campaign.  Federal Reserve and Federal government knew a rising interest rate or rising mortgage rates would destroy the national government, the real estate market, the banks and GSE's and Fed who own that mortgage debt.  Same true for stock market so critical to funding underfunded pensions...on and on. 

Please stop referring to these as markets.  They are not.

Thu, 07/10/2014 - 14:21 | 4944301 NOTaREALmerican
NOTaREALmerican's picture

You can still buy and sell stuff.  It might not be a "fair" and "free" market, but somebody famous ones said:   life isn't "fair" because their's no "free" lunch. 

Thu, 07/10/2014 - 14:37 | 4944359 Ham-bone
Ham-bone's picture

how do you price an asset when there is a buyer with infinite cash and infinite will to buy...and no intention to ever sell.  Just perpetually removing assets from the Treasury market, stock market, RE, CRE, etc...causing a perpetual short squeeze with ever moar cash to buy with and ever fewer assets to be bought.  That is not a market...it is a national policy tool.  Huge actors in the market not acting with the intention of making a profit (and a loss is fine) so long as policy goals are met.

Thu, 07/10/2014 - 14:38 | 4944394 Civilization
Civilization's picture

Yes, and what if the next policy tool is to buy vol? Those exuberant, oh scuse me, complacent investors...

Thu, 07/10/2014 - 14:49 | 4944428 Ham-bone
Ham-bone's picture

I would not be suprised if we close in the green today. 

Never know but the rush to buy into the closing 15 or 30 minutes is a new "market" institution.

Thu, 07/10/2014 - 14:59 | 4944471 SeattleBruce
SeattleBruce's picture

And this ends when the world loses confidence in the primarily US driven gaming which they're doing day by day, week by week, month by month.  Because it cannot go on.  They have stretched out the inevitable much longer than most of us thought possible.

Thu, 07/10/2014 - 15:28 | 4944544 Ham-bone
Ham-bone's picture

not to be argumentative - but this game is likely only interrupted by real world available net exports of oil - for at $100 a barrel the price is too low to draw out more capex spending and exploration to meet the shrinking supply of exportable oil...but higher prices will also cause an economic slowdown.  Rock and hard place are like tectonic plates with a earth quake overdue...CATCH 22 with no CB'er answers

Thu, 07/10/2014 - 16:05 | 4944753 SeattleBruce
SeattleBruce's picture

Yes, that's huge.  Real GDP is very low to flat to negative.  Who knows how negative real GDP is in the US in Q2?  I refer to 'real' vs. the gamed/propagandized numbers.  Speaking of just the US for a minute, TPTB are having more of a time hiding the reality.  The middle class squeeze continues with 70% of the economy dependent on them, how can the reality of horrible GDP and FT jobs shrinkage be hidden for much longer?  More and more of 'we the people' are talking about what BS the official numbers are.  This is what I mean by 'lose confidence' in my comment above.  It may be happening slowly (for now), but it is happening.  And moreso in other parts of the world openly discussing ending the dollar hegemony.  That will greatly hamper the FED's ability to manipulate and propagandize reality.

Thu, 07/10/2014 - 15:15 | 4944515 NOTaREALmerican
NOTaREALmerican's picture

Re:  how do you price an asset

If the game was FAIR any dumbass could win.     The real test is winning against the smartest-n-savviest people who have manipulated the "market" for their own personal benefit.  But, only the most-fit get to WIN the game.  

Thu, 07/10/2014 - 14:31 | 4944366 jay28elle
jay28elle's picture

screw the famous person who said that.  he's flat wrong and out of his mind...  There's lots of free lunches, and what isn't fair needs to be done away with. Sure we can buy stuff, but only if the govt has given given us the money to do so, it's properly regulated by the govt, and it doesn't put the buyer at some unfair advantage.

 

 

Thu, 07/10/2014 - 15:12 | 4944518 NOTaREALmerican
NOTaREALmerican's picture

Re:  and what isn't fair needs to be done away with

Fair is FAKE.   Only dumbasses play fair.    Any market that's fair doesn't have the smartest-n-savviest people playing.  

Thu, 07/10/2014 - 16:08 | 4944772 SeattleBruce
SeattleBruce's picture

I assume you don't want the "market" run by a bunch of criminals - like it is now?  Unfair by smartest-n-savviest is one thing.  Criminal cabal is another.  We've got the latter.  TBTJ=too big to jail.  How's dem apples?

Thu, 07/10/2014 - 14:23 | 4944316 Rip van Wrinkle
Rip van Wrinkle's picture

Why would these f*ckers give a toss about your house value, your security or your pension? As for the Federal Reserve , the banks and the GSE's printing another few trillion isn't a problem, is it.

'Never let a good crisis go to waste'.

 

Thu, 07/10/2014 - 14:28 | 4944346 jay28elle
jay28elle's picture

They care about the value of my pension only to the extent that I feel I'm quite wealthier since BO came into office.  Maybe if everyone's pension increased 30%-50% each year we would all be happy campers and open the borders completely, allow the govt to spy on us, allow the IRS to cheat/steal/lie, allow the jerks in DC to continue being croooks, etc. Oh, and not mind the day when they come and confiscate our guns.

Thu, 07/10/2014 - 14:46 | 4944422 John Law Lives
John Law Lives's picture

"They care about the value of my pension only to the extent that I feel I'm quite wealthier since BO came into office."

Very insightful post.  I have long considered that the prolonged pump in equities could serve as a highly effective diversionary tactic whilst the nation is being drastically transformed.

Thu, 07/10/2014 - 15:08 | 4944504 SheepDog-One
SheepDog-One's picture

They care about your pension because they're planning to steal that shit.

Thu, 07/10/2014 - 16:17 | 4944804 SeattleBruce
SeattleBruce's picture

Right.  They keep pensioners, and 401kers quiet the same way they keep the free shit army quiet - they feed/sell them on illusions of wealth - whether on-paper increases in their 401K statement, or 50 inch plasmas to watch sports and dancing with the stars on...it works til it doesn't - but if you're a 'community organizer' or a radical - it's pret darn good environment to enact your personal, Executive Order driven 'hope and change.'  Which is why the community organizer in chief can go down to Dallas yesterday and chide congress to 'do something' about the problems that he exacerbated exponentially with his insane Excutive Orders, and why "we the people" are doing little about it.

Thu, 07/10/2014 - 14:24 | 4944320 jay28elle
jay28elle's picture

What shall we refer to them to?

Generator?  Fabricator? 

Thu, 07/10/2014 - 14:29 | 4944348 i_call_you_my_base
i_call_you_my_base's picture

"Policy Tool"

Thu, 07/10/2014 - 13:57 | 4944188 Debeachesand Je...
Debeachesand Jerseyshores's picture

I got my balls squeezed this morning Too......

Thu, 07/10/2014 - 13:59 | 4944189 Squid Viscous
Squid Viscous's picture

what a fukn joke, AAPL down 2 bucks, back to green because it's so cheap at 16x earnings with 6% growth... wtf

Thu, 07/10/2014 - 13:58 | 4944191 jubber
jubber's picture

what a crock of shit this is, got stopped out on that fucking bollox.

Thu, 07/10/2014 - 14:15 | 4944275 overexposed
overexposed's picture

This is definitely not the market to maintain stops in... Unless you're in a position to have your trades DK'ed, that is.

Thu, 07/10/2014 - 13:57 | 4944193 order66
order66's picture

It's just because everything is so unriggedly cheap at these levels.

Thu, 07/10/2014 - 14:00 | 4944201 slaughterer
slaughterer's picture

Kev' got a tattoo last night: "Need. ES. 2000."

 

 

Thu, 07/10/2014 - 14:00 | 4944203 NOTaREALmerican
NOTaREALmerican's picture

It's almost like, like,  "they're" taking the loot from the short guys.  What happens when there's no more short guy loot left?

Thu, 07/10/2014 - 14:12 | 4944265 IANAE
IANAE's picture

cue the red lights and submarine ambience...

"Take 'er down to 1100..."

"Aye aye Captain...DIVE DIVE DIVE "

Thu, 07/10/2014 - 14:03 | 4944220 slaughterer
slaughterer's picture

"What happens when there's no more short guy loot left?"

 

Then they go "all in" short.  Easy. 

Thu, 07/10/2014 - 14:03 | 4944221 Squid Viscous
Squid Viscous's picture

bot some CMG on that mini dip it got all the way down to 38 times next years est.  woo hoo~

Thu, 07/10/2014 - 14:03 | 4944224 bahaar
bahaar's picture

This market will never crash until people like me who sat out the market, get in.  I'm convinced of that. 

Thu, 07/10/2014 - 14:21 | 4944299 jay28elle
jay28elle's picture

Exactly what they are waiting for...

Thu, 07/10/2014 - 14:24 | 4944322 BandGap
BandGap's picture

I'm not going back and I do enjoy the soap opera.

Crash or not you just have to keep watching. Days like today are "fun".

Thu, 07/10/2014 - 14:26 | 4944327 SheepDog-One
SheepDog-One's picture

No doubt, I should just take $500 and buy some stawks, no doubt everything would immediately collapse 15%.

Thu, 07/10/2014 - 14:06 | 4944227 Bear
Bear's picture

I think we're ready for a 'slip & slide' ... UsdJpy's slip is ES's slide

Thu, 07/10/2014 - 14:08 | 4944243 Bear
Bear's picture

58.75 then away wee goo

Thu, 07/10/2014 - 14:04 | 4944228 SheepDog-One
SheepDog-One's picture

Fuller retardeder every......fucking......day

Thu, 07/10/2014 - 14:05 | 4944235 slaughterer
slaughterer's picture

Good news overnight: BOJ decides to print trillions of trillions of yen to buy stocks all over the world. 

Thu, 07/10/2014 - 14:06 | 4944239 PlusTic
PlusTic's picture

This shit is NEVER going down...NEVER

Thu, 07/10/2014 - 14:15 | 4944274 jay28elle
jay28elle's picture

Apparently no reason to go down, right?

Thu, 07/10/2014 - 14:09 | 4944249 slaughterer
slaughterer's picture

Kev's girfriend has a tattoo: "Must. Raid. Gold. Overnight."

Thu, 07/10/2014 - 14:09 | 4944250 Tenshin Headache
Tenshin Headache's picture

"It's not over until the last bear is carried out on a stretcher."

Thu, 07/10/2014 - 14:11 | 4944257 Hohum
Hohum's picture

NEVER is a very long time. Be patient.  Think of articles in 2000 or 2008 saying no recession on the horizon.  With that said, it may not be very soon.

Thu, 07/10/2014 - 14:11 | 4944260 jubber
jubber's picture

looks like someone finally noticed the news that the UN is evacuating it's staff from Libya due to escalating problems...but Oil has been down for the last 10 days because Libya was fixed LOL

Thu, 07/10/2014 - 14:29 | 4944357 NotApplicable
NotApplicable's picture

Problems? I think you mean opportunities.

Thu, 07/10/2014 - 14:11 | 4944263 praps
praps's picture

ECB are talking about QE again so I guess it's a slow melt up till 7th August

Thu, 07/10/2014 - 14:18 | 4944292 buzzsaw99
buzzsaw99's picture

7th August of what year?

Thu, 07/10/2014 - 14:20 | 4944297 lasvegaspersona
lasvegaspersona's picture

The market now functions only as a hedge for physical.

If there is a crack up boom we could see (even more) insane market prices.

If you were in Zimbabwe in 2005 you would have missed the 4000x rise if you we're not in the market....not that it mattered in the end...

Thu, 07/10/2014 - 14:22 | 4944308 NOTaREALmerican
NOTaREALmerican's picture

It sure did if you sold at 3999x.  

Thu, 07/10/2014 - 14:42 | 4944407 Quinvarius
Quinvarius's picture

You would have been able to afford 2 eggs with your profits.  And a day later, nothing.

Thu, 07/10/2014 - 15:14 | 4944527 NOTaREALmerican
NOTaREALmerican's picture

Not if you bought "something" of value the day before.

Thu, 07/10/2014 - 14:27 | 4944335 craus
craus's picture

There is no way Obama, courtesy of Yellen, is going to allow this market to crash.
No way period. As funny as it is BTFD then after it shoots up; STFR.

Oh yeah I learned when they say they are doing something, then they are doing the opposite, period.

 

Thu, 07/10/2014 - 14:45 | 4944416 moneybots
moneybots's picture

"There is no way Obama, courtesy of Yellen, is going to allow this market to crash."

 

None of the other Presidents allowed it to crash, did they?

Thu, 07/10/2014 - 14:29 | 4944351 Itchy and Scratchy
Itchy and Scratchy's picture

sell puts wear diamonds

Thu, 07/10/2014 - 14:30 | 4944364 craus
craus's picture

Yup. I sold PUTS on the dip. Money in my pocket.

Thu, 07/10/2014 - 14:30 | 4944355 I Write Code
I Write Code's picture

Whatever Janet wants, Janet gets,
And little man, little Janet wants you!
Make up your mind to have no regrets
Recline yourself, resign yourself, you're through.

Janet wants more volatility, at least intraday.

Thu, 07/10/2014 - 14:30 | 4944361 alien-IQ
alien-IQ's picture

non stop vertical climb since 9:30am.

same shit different day.

Thu, 07/10/2014 - 14:30 | 4944365 Tsar Pointless
Tsar Pointless's picture

I said it this morning. We'll finish awash in a beautiful sea of green today.

S&P 2000 by the middle of next week, then it's really going to be off to the races. I'd say S&P 2200 by the autumnal equinox.

Thu, 07/10/2014 - 15:12 | 4944520 TabakLover
TabakLover's picture

Oops!

Thu, 07/10/2014 - 14:42 | 4944406 jubber
jubber's picture

looks like a few sellers have shown up...this could get interesting?

Thu, 07/10/2014 - 15:15 | 4944536 TabakLover
TabakLover's picture

Let me see.  The previous article on ZH told how there are no more shorts and that is why the markets will crash when FIRE gets yelled.  And this article is telling us how the markets are back up today because  of the squeezing of THE SHORTS!

Hoo-boy.

 

Thu, 07/10/2014 - 15:52 | 4944702 Keltner Channel Surf
Keltner Channel Surf's picture

Sometimes cause and effect can be blurred.  At least for the Russell, it's clear pure algo-driven technical trading trumps any news that doesn't have a strong, immediate domestic impact.  Thus, we had a "buying vacuum" as machines stepped aside when the IWM approached both its 50 DMA and lower Keltner limit on the daily chart.  Given this lower volatility envelope hadn't been touched since mid-May, NO WAY were the machines not going to bounce strongly from here for at least a short period.  Had stronger overnight selling driven it just a bit lower to the 200 DMA, well, the bounce would have been even more fierce and sustained, rather than rolling over mid-day.

Thu, 07/10/2014 - 16:53 | 4944921 ThisIsBob
ThisIsBob's picture

I trade for a living and have for years.  My experience has been that market timing calls posted here are generally worth only slightly less than what you pay for them.

Thu, 07/10/2014 - 18:40 | 4945273 atoast2toast
atoast2toast's picture

The market dropped but it's still rigged? 

Thu, 07/10/2014 - 19:16 | 4945439 BringOnTheAsteroid
BringOnTheAsteroid's picture

Why has the term "long squeeze" not entered the vernacular. Oh, dumb question, because markets rarely go down.

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