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Manic-Buying Turns To Panic-Selling As 'Illiquid' Stocks Plunge To 5-Month Lows
Just as we warned, liquidity was incomprehensibly low today (below normal pre-market levels during the peak of the trading day) and the intraday whipsaws were meteoric as a closed cash bond market enabled the slightest twitch in USDJPY to send S&P algos into conniptions. Biotech crashed. Trannies were ripped ridiculously higher at the open - then collapsed into correction (-11% from highs); US Airlines have fallen for 6 straight days, crashing 17% (with today's 7% plunge - driven by chatter over airborne Ebola - its biggest in over years). Tresury futures implied a notable drop in yields across the curve (10Y -7bps at 2.21%, 30Y 2.97%, and 5Y 1.45%). The USdollar closed -0.33% led by EUR and JPY strength (but AUD surged 1% extending gains after China data). Gold ($1234), Silver, and copper all gained on the day as WTI fell once again (despite some intraday strength in the middle of the day). Stocks "flash-crashed" on very heavy volume in the last 30 mins with VIX breaking above 24 (highest in 16 months). All major equity indices are now below their 200DMA with the worst 3-day loss since late 2011.
Liquidity was simply not there - but but but HFTs?
eMini liquidity is lower than normal pre-market levels $ES_F $SPY pic.twitter.com/dJXkRGA2Gt
— Eric Scott Hunsader (@nanexllc) October 13, 2014
Which meant - just as we warned - epic whipsaws in stocks...
As USDJPY tested down towards 107...
and Tresasuries led stocks lower all day...
Leaving all the major indices red on the day (even after Russell tried to stage a big comeback)... just look at Trannies at the open!! (that's not a fat finger!!!)
A look at futures trading shows the magical levitation overnight giving way to reality in the US session...
Year-to-date, Dow joins Russell in the red, Nasdaq getting close...
VIX punched above 24...
Stocks - always the last to catch on..
Airlines index crushed...
Bonds may have been closed but futures implied some big yield drops on the day...
Credit was closed today but just as a quick context for where stocks might end up...
FX markets were also thin but notable moves in AUD and SEK as the USD weakened again... the moves were dominated by the overnight China data
Commodsities rallied (on safety and weaker dollar) but WTI fell once again... (even after a modest rally intraday)
Charts: Bloomberg
Bonus Chart: Remember what happened the last time Japan raised taxes...
Bonus Bonus Chart: Hindenburg Omen 2008 and 2014...
In summary:
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let me know when SPX is at 666 again. I'll jump back in at that point.
maybe never but SPX 1200-1350 is very possible soon....1987 style....not tomorrow tho when the boston emirates scare is reversed into 3 days of POMO as it turns out to be nothing
Was just about to post this
More than one guy in the pit behind the CNBC set made the same comment at how rapid and how wide the spread was on each trade lower, not just the e-mini. If loan growth and the Quality of bank assets is not improving, expect this risk flight to go full retard. 1987 led by ETF's could be very easy to push over as the programs do not have the support lines to bounce off of right now and "fly by wire" back to vwap.
Also, if three or four oil companies go bust, or are required to raise equity at the order of HYG funds, expect this to be a forebear of things to go lock-down. Weakness may come also from those dot com stocks, as many sell sides just marked down their numbers for google & yahoo by about 30% in the last 24 hours.
So either
1.) banks report better effiency and loan quality at >10% growth due to their improvements in internal monitoring and technical innovations or
2.) lowering of risk expectations further.
For the home gamers: no real difference between 666 and 1972 on the mainboard, to get QE going again they would need at least 6b/day, but are stopped by the lower bound. So scenario testing implies equity damage will likely be long-lasting at this stage.
US Airlines have fallen for 6 straight days, crashing 17%
Insider knowledge again?
GAME OVER, MAN! GAME OVER!
I thought cheap oil was good for the economy and airline companies...
Maybe, but widespread Ebola trumps cheap oil everytime...
Looks like the Plunge Protection Team ran out of bullets this afternoon...
The airlines will start the new Seat Protection Team. Before and after flight hazmat suits. Burnable foam seats. ... a new profit center.
Strong dollar + a few temper tantrums in stox and it seems a good reasont to bring back the helicopter. They're already walking back all that big talk of rate increases.
QE to Infinity and Beyond!!!
Those Ebola virii are such small targets (and there's so many of'em!) :>D
It is. Ebola isnt.
Just wait until the SPX has a -300 day. That's going to be a freaking blast. And I think it can happen almost any day this month. I won't care after 8 pm tomorrow, I'll be beyond the reef catching snapper, mahi, and on Wednesday yanking claws off stone crabs off the Keys.
And to whoever is spamming everyone that is a techinical bear with negative ratings:
I hope an Ebola homo ass rapes you. Cramer, is that you?
not if you locked your fuel contracts in at the peak
No man, yu should realize by now the games never over, only the players change...
As long as there are tax paying citizens, they can keep playing. Without us, the game wouldn't be played.
The first time a domestic flight attentant gets Ebola for "no reason", you can kiss it all good-bye.
That info will be 21 days late...or even 30.
Oh boo hoo, here me playing a sad tune of the worlds smallest violin.
Flying is a friggin rip off anymore, and not the once fun experience I remember as a younger lad.
You know, back when they would let a smaller kid tour the cockpit before take off. Hell, I even flew in flight one time back when the Martin 4-0-4 was a common commuter. Got to stand right between captain and co-pilot. Nobody even thought twice about I'm sure.
Planes had character back then. These days? I'll drive.
Ever been in a men's locker room, Quasi???
No, no, Quasi's fine! He can stay.
Do you like gladiator movies? Damn funny movie. I learned to speak jive after that.
"Again" hehe....I see what you did there.
I guess I should be taking my money out of the bank right about.....
Is it really as simple as the lack of QE?
For example, if
And suddenly bad news IS bad news, and there's lots of it in this economy (especially if you go beneath the headline prints...) How can the 'market' actually justify these high P/Es? It can't.
Nice reference to ETF's, when they get sold today, EVERYTHING in them gets sold, in weighted unison. Ironically, SPY can be hedged with eMinis with perfect efficiency (or whatever the term is), much better than the individual trading of stocks in 1987, or the Dow substitute XMI/MMI Futures that saved the world on 10/20/1987...
how anyone is still in this bubble is a mystery to me. I mean, I can understand the professionals. they have no choice, but anyone who thinks they can safely wring a few more shekels out of this nag is just plain greedy and really does deserve big losses.
If the banks do not need QE or gov bailouts to survive, it will be going lower than that. QE is only for bankers. They will have a good excuse for they pump and dumped the stock markets for xth time in the last 100 years. And CNBC will sell that reason to the public.
The Devil Trade, eh?
What killed the dollar after the close?
Don't know yet, but metals are moving up...
Media misunderstands public panic over Ebola http://tinyurl.com/mrao6cl
and so the last 2 years of mal-investment begin to unwind.
Two years? More like six years since the last crisis. And if you really want to get technical it's 101 years worth of FRN malivestment.
Its the shmitah Doc, every 7 years. Interesting shit. Why the hell would anyone give up having a whole year off every 7 years ???
"If you like your dip, you can keep your dip."
-B. Obama
Just when we need a little inspiration, "Bathhouse Barry" sure is staying QUIET !!
I hope he's not coming down with something . . .
We will see a rotation from crappy useless tech stocks into useful technologies like Bitcoin imo.
and the LAKE that I didn't buy was up 47% today
Ebola come,ebola gone.
Funny how when the Fed takes a vacation day, the free market starts to wake up a little. Mr Chow must have gotten bored of the PPT game and found a real arcade instead.
The BernankenYellenStein may have let this thing get too far out of hand. People are scared shitless and the selling may overwhelm the printers.
Whisper rumor someone threw down one of those fake rubber vomit things on K-Hen's desk as a prank today.
Stick out your tongue
Push out your tush
Pick up your hands
Give it a push!
You know by now you're doing the French mistake! (Oh, no!)
My old man (60 yoa) called on Friday wanting to know what to do. He has NEVER talked to me about $$$, not once. In fact, he'd have you believe he's swimming in it. But even before I talked to him he had moved all of his self directed investments to money markets. I discussed the safety (reletive) of money markets and what they actually are...not sure he actually got it. The point is, if a guy who would have you believe he's a made man (he's not) tells his son he's freaking out and getting out of equities, there has to be lot's of others. Sellers>Buyers...only one direction makes sense.
and when people like that start to panic out of things that means the bottom is in; new highs by Thanksgiving.
BTFD
You must have an unlimited bankroll.
Spastica Rex WINS!
(something you rarely hear)
"DISCLOSURE: I am nearly always wrong about pretty much everything."
And you were wrong about that, too!
White people problems
Mo' money, mo' PROBLEMS!
BTFED. [Buy The Fucking Ebola Dip}
<sarc/>
Can I please get the Deer now?
thanks
CNBS in full deflation panic mode, explaining to the sheeple why falling prices are nasty business. Giving cover to the Fed to fire up QE again.
I am guessing there is no way that QE stops this month.
It will "officially" but I wouldn't be suprised if Belgium decides it has a sudden craving for more shitty US debt.
Belgium won't need to if stocks keep going down. That money is going to flee to the "safety" of USTs.
Good point. by design then?
*shruggs*
Who knows? By design? The only card left to play? Sheer incompetence? Because if they keep on printing, it's hyperinflation, and they know it BITCHEZ!
I guess cheaper rents, lower food and energy prices are bad for the working class LOL
I need to see 1000 dow points drop per day for 3 days in a row................ to believe that Central Command has finally acknowledged that the world is abandoning USA due to Quantitative Easing and Non-Interventionism.
US economy needs oil at $20-50 for at least one year to just halt the collapse, let alone rebounding.
We'll see Dow at 3k and 10 year yields at 6% soon, if my hope that central command is actually doing something real to preserve USA superiority in the world
Being an Eastern European living in Canada for 15 years already, I can tell you:
Western world cannot survive without a strong USA. We'd be all 5th world without Pentagon.
Thank God for Pentagon.
Argh.
The founder of Zerohedge is Eastern European also.
We know what we are saying
I didn't down vote you, and in a very fundamental way I think you're right: the West's lifestyle would be fundamentally impossible without America's mlitiary/security apparatus and its relationship to the ME and petroleum.
Could you imagine if the US's chief export wasn't debt?
The US is a couple years away from Wall-E, except we don't have robots caring for our every want.
Of course, the middle east would be nothing more than a desert again and the Saudi's wouldn't be stuffed full of FRNs.
Hmmm, actually that sounds pretty good.
pods
My wife thinks I am insane, obviously she has never read any of EKM's posts.
lol
Or mine.
I love you, Doc.
The other night my wife saw me replying to a post where someone called me an asshole, or maybe I was self admitting it.
She asked why would anyone think you are an asshole.
I simply said "Cause I am."
Know thyself.
pods
Some people can't deal with the truth and the 7th definition of "Asshole" is someone that tells the truth in the world of make believe.
Well from what I've seen of your posts you're a fairly chivalrous, affable asshole, so don't despair too much.
Pods - I think we dated
Obama 7 wars in 6 years, he is your guy...
Obama has vetoed all wars.
Zero wars thus far. Throwing bombs on empty buildings does not classify as war
There are a bunch of dead families that might disagree with you.
He know, he just a standard troll or government worker.
What?? There are trolls on this website??
and to boot, they ignore your whole Pressure vs. Volume vs Temprature thing and believe in Contrail Theories!
A bunch, again, is not war
Are you proposing that 500k soldiers by fired from work and all navy ships be returned home?
If yes, who will defend world trade routes? Who will bring commodities and energy to USA and to the West?
Careful what you wish for.
Pentagon is irreplaceable
Defend world trade routes from what? USA created 90% of all world terrorist organisations. You destroyed Iraq- they hate you, you destroyed Afganistan - they hate you, you destoyed Libia, Syria, Yugoslavia,etc You droped nuclear bomb on Japan...
What a joke are you
Who controls trade routes controls world trade. If we do not control it, then Putin or Jinping will control it, or, nobody will.
Which means ....starvation.
Pentagon is a force for good in the world. It does an excellent job at preserving world trade. They just have a "small banker" problem right now, which they will resolve one way or another, soon.
You are coward. Your country occupaying about 80% of the world from 1945, killing people by millions, killing own citizens by thousands, and you still defending it. I know, you are insane prepaid troll
Are you located in Moscow or St Petersburg?
How much rubles do you get paid per hour?
ekm1, be careful...
watch this fool, kowalli...
he wanted my address so he could 'hang me up' like his ISIS brothers do....
no joke! he's bat shit crazy...
dont engage him
Either from Teheran or from Moscow.
Paid to troll anti-american propaganda. These guys troll on many blogs.
Once he's done here for today then he'll move somewhere else for a couple of hours. It's a job. That's how he makes a living
just lookin' out, bro...
Bill Clinton said, "I did not have sexual relations with that woman."
Obama said, "I have never ordered a war on any country."
If you're all for defending trade routes, please visit your local recruiter at nearest strip mall. They're waiting for you patriots with open arms....and a ball point pen!!!!!
Anything to do with the American military elicits an emotional response instead of a logical one around here, too much ideologically driven idiocy, not enough realpolitik.
You're spot on EKM, invading other countires for fun is something I wish the government wouldn't do, but keeping trade lanes open is vital and probably the only useful function the military still provides. Just look at Somalia (or Indonesia) and the damage a few idiots with a rickety skiff and a couple of rusty AK47s can do, that would only get worse with a diminished naval presence.
I believe in non-intervention and self determination, but not for pirates or people fucking up supply routes. Global trade is not actually a bad thing, it was our government's shitty policies that killed our domestic economy, not cheaper goods from abroad.
Pentagon is irreplaceable
Depends... on what you replace it with. I'm willing to experiment.
I say we go round next time. That way, when it gets out of control, we can just turn it on its side and roll it into the Potomac !!!
Don't fool around with our Pentagram! Terrorists will succeed in their efforts to steal our manly essence as they defile the purity of our precious bodily fluids!
I thought everyone knew that!
We have to keep blowing up "empty" buildings with $10 million cruise missiles to justify 500,000 war jobs. Great logic
It is amazing to me how so many do not understand what you mean ekm1. Anyone who does not understand the link between the Pentagon and USD reserve currency maintenace simply has no grasp of the real world. And those who seem to think that having an understanding of the relationship is somehow a badge of memership with NEOCONS makes me frustrated.
LMAO!!!
Which wars has he vetoed? Give some specifics.
Show me one single war he started
here ekm1 are what is known in the real world as facts libtard - try aqquainting yourself with them http://stpeteforpeace.org/factsheets/obama.html
and Silver still with a phony paper $17 & change handle...
laughing all the way to Apmex...
listen up out there...if u ARE or HAVE BEEN stacking real money - it wont be much longer b4 u r proven right.....
It's true, brother! We have a special bottle of Boone's Farm tucked away....
The new Goldman Sachs 3pm algo sells instead of buys.Stock market speculators need to be forced out of the market so they can use their money for something real. The Fed and Treasury running a get rich quick scheme in the stock market is starving real start-ups of capital. The banks and rich need to be loaning and building. Not gambling.
Do not worry. SPX 600 approaching soon. Maybe after the coming real estate correction?
I'd be a buyer at around 200 myself.
This is a government/bank holiday. The Plunge Protection Team was off today. Plaqn for a PPT-induced turnaround tomorrow.
Yan was on his terminal, He just ain't journeyman yet
Gonna need to conjure up some much better than expected bullshit numbers soon. Everyone savy infestor knows that the stawk market much like realestate only goes up.
I'll be tuning in close to the Nikkei 225 tonight...
It is all about trust. It started to decay and soon just soon.....
I keep remembering the Friday about 4 weeks ago where 'smart money' BTFATH'S all in leveraged. This is why I don't believe a fuckin word any of them say.
Remember Tepper and Uncle Asshole Warren coming out front and center saying to buy. That was "crooked ass" speak for purdy please buy what I'm selling...
the russell is showing some buying because there are a lot of cheap prices printing. i am buying a coupla all time lows on companies growing 20+%/yr.
the russell2000 has already taking the beating the other indices will experience now, apparently.
CNBC is hilarious. They are trying to make sense of a sharp sell of with volume. One guy is saying there is a buyer on the other side of this sell off etc......
Dream on, heis the guy who sold a buck above and trying to survive the pressure. Soon, very soon.......
retail sheeple will do the usual ... nothing ... and get slaughtered.
i'm sure a lot of people calling brokers and asking what to do, and get the "hang tough" speech (fed res won't let things get out of hand)
Fed res is just doing some kornholing here, but sheeple can rest assured it won't get too far out of hand.
Every day there will be more and more traders on temporary sick leave and vacation. Spot respirators on the trading floor next (off camera).
Until it's rain'n'em.
Not only retail sheeple. also pension funds, insurances, etc, etc
Hence the many deers in the headlight (thanks ZH for adding that as a bonus. made my day).
First saw the photo from an angle, couldn't figure it out -- thought it was a bunch of pissed-off Fiat 500 owners protesting a power outage during Football Night in America . . .
LOL! That's hilarious...of course there's a buyer on the other end. As long as prices keep going down, there will be people buying. But that is scant comfort to the guy doing the selling.
The presence of buyers doesn't necessarily mean good news for the sellers. Buyers show up in big numbers at liquidation sales too.
The guy on the other side is a HAL 9000. The FED played everyone for suckers this shearing.
" The die is cast in Italy. Beppe Grillo’s Five Star movement has launched a petition to drive for Italian withdrawal from Europe’s monetary union and for the restoration of economic sovereignty.
“We must leave the euro as soon as possible,” said Mr Grillo, speaking at a rally over the weekend. “Tonight we are launching a consultative referendum. We will collect half a million signatures in six months – a million signatures – and we will take our case to parliament, and this time thanks to our 150 legislators, they will have to talk to us.”
Ever since the pugnacious comedian burst on the political scene, the eurozone elites have comforted themselves that the party is not really Eurosceptic at heart, and certainly does not wish bring back the lira. This illusion has been shattered.
A referendum itself would not be binding, but a “law of popular initiative” certainly would be. For the first time, a process is underway in Italy that will set off a national debate on monetary union and may force a vote on EMU membership that cannot easily be controlled. "
http://www.telegraph.co.uk/finance/economics/11159649/The-great-Lira-rev...
Also in France there is the FN that wants to get rid of the Euro. Greek people also will just take as much cash as still possible and then when debt to GDP will hit sth like 300% they will say "ok sorry guys, we can't pay you back ... Oh and by the way we'll go back to drachma".
Why would anyone in their right mind still hold euros when there are only two possible scenarios:
A) abolish democracy in all eurozone countries (sounds crazy?) or
B) outright bury the Euro
You chose
Fuck fuck fuck fuck fuck
Couldn't have said it better myself. Sometimes the appropriate words just occur to us intuitively.
Several months ago, I used the word "fuck" six or eight times in a single sentence, and I still didn't make my point.
We have front row seats for this theater of mass destruction....
This in the face of dollar weakness. Ah, being a silver bull is such sweetness.
" S&P algos into conniptions." Really? Fuck machine trading! Sooner or later these things bring a disaster to fake machine traded markets.
Vomiting on a plane is apparently gold positive...
The deers crack me up, every time.
I see people selling, ... dollars...
You know, I don't necessarily WANT to see the markets crash, and see folks get wiped-out.
But I DO need to see that moment when TPTB realize they have lost control over the Jenga tower they built. I NEED to see that moment when Joe-Six-pack, with his little 401k, realizes how ephemeral all those 'gains' actually were, and that he has been completely fucked for good this time.
Arrogance has made everyone too complacent. As bad as things could get if things crash, they would be far, far worse for them to think they actually came out ahead. Because, without the lesson, they will do it all again, on a grander scale, in the years to come. And the sheeple will continue to follow blindly.
A good hard crash and several years of extreme hardship would force everyone to start 'keeping it real'. We'd recover, with time, once we purged a lot of the poison out of the system. The anger of the people would force those in power to make changes, and crisis would make it easier to do.
I just want to get this shit over with so we can all drive on. The dragging-on of this ridiculous parade, with its daily assaults on our intelligence in the form of fake data and statistics, and "spin" about how great this 'recovery' is, has really become too much to bear...
I REALLY want to see this stock market crash and burn. Fuck the moron sheep "folks" - they DESERVE it and its GOOD for them. This is the only way they will ever wake up (as I once did...hahaha!!!)
I'm fully invested in my 401k. All in cash with a 50-100% company match. Can't beat those returns in the market :).
Stateside
Bullshit. You don't have anything but 0s and 1s in a computer code. Unless you liquidate and have tangible assets, you've got squat. Enjoy your upcoming MyRA.
You can not get people to understand what you just stated. They will never get it. If you can not hold it, you do not own it. I don't care what your 50k a year financial advisor at T rowe price told you. Its not really yours unless it is in your possession.
Nobody seems to get it. Even people in the bank don't (or they are "acting").
Try telling your "financial advisor" or "bank guy" that with so little interest rate that they give you for lending them money and turning that money into bits and bytes you would actually prefer to have your dollar bills back ("withdrawn" from your account) and put the cash into your own safe deposit box.
Seriously. Try that.
They will look at you like the deer in the headlight. And I guarantee you it will take 5-10 seconds until they will be able to speak again. And then the most likely sentence you are going to get is "Why would you want to do that? But but ... but you won't have any return on that money!"
Ha! I wonder if they would honor that request. 25000 in a safe deposit box, just in case. lol
What do you mean "they would honor"?
You personally have to pick up the bills and personally put them in your personal safe deposit box (best is outside the banking system). Don't trust those guys under ANY CIRCUMSTANCES.
Our beloved deer has brought his friends!!
+1
Well said.
I've been short stocks and short the $ for the last week but I've covered a lot tonight after this session...for the simple reason that there WILL be reaction function in play from the FED at some point if this continues...i hate to say that...but there's no way the FED will sit there and allow this repricing to continue without getting involved in the only way they can. They may not even wait for the meeting at the end of the month.
And what exactly do you think the omnipotent amazing Federal Reserve Bank will do? QE? Because it worked so well before? Or maybe MORE QE. Or maybe EVEN MORE QE??
They might try to come up with something. But at one point it's going to be too late. We are past that point (IMHO).
On October 2nd Draghi announced "operational details of asset-backed securities and covered bond purchase programmes" in the amount of 1 trillion EUR (?). What exactly did the stocks do that day again?
CBs can't fool all the people all the time...
It's a zero sum game. They don't produce sh*t, they own the whole enchilada. The game is won when the 'retail' market is all/mostly in and the Fed member banks wash them out. Cycle after cycle of the same bullshit. When you're on the sidelines looking in and you know what's going on, it's clear. Once, you got some money in the game, it's hard to stand back and think clearly. You get caught up in the game and turn blind to the ponzi.
"The few who understand the system, will either be so interested from it's profits or so dependant on it's favors, that there will be no opposition from that class." — Rothschild Brothers of London, 1863
I think you are correct. One More Time for old time's sake. It will be about as successful as that TARP shit back in 2007. Get about 1.5 days out of it. But it will buy the vomit scum a little bit time to unload all they can.
Die you piece of shit US stock market, DIE! Let the games begin!
I get liquidity as a concept, but this context is confusing.
What I don't get is a)how it was clear that it was down today based on the technicals b)why it caused such violent movements.
How did we/you know?
For anyone else that was confused:
Depth of Book - number of outstanding buy/sell orders. More orders means more trading so more liquidity. I learned me sumthin' today.
Dow down 223 today.
Hmmmmmmmmmmmmmmmmmmmm
Now where have I seen that # before?