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Dow Record Close Despite Bond Yields, Bullion, & Black Gold Battering
Despite the best efforts of business media to paint a rosy picture of the Black Friday spend-fest, stocks had only one trajectory - from upper left to lower right - from the open. Small Caps were slammed but all major indices gave up significant knee-jerk "energy schmenergy" gains to close ugly. However, The Dow was pushed just into the green - and new record highs - to prove everything in the centrally planned world is awesome. Crude oil prices were monkey-hammered to 5-year closing lows. The USDollar gained on the day - after 3 down days - and combined with Swiss referendum expectations, gold faded notably (as did Silver with oil). Treasury yields tumbled 10-12bps on the week and HY credit notably underperformed.
Ugly day for stocks...
As the week's gains disappear...
Stocks decoupled from USDJPY
Credit markets were hit hard today - driven by HY energy collapse
While stocks were ugly, it was commodities that took the proverbial biscuit today...
As the dollar rallied from OPEC's decision after 3 down days...
Treasury yields plunged...
Charts: Bloomberg
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Possession is nine tenths of the law.
Soon to be ten tenths.
Battered? I feel like Tina Turner myself.
swiss referendum on the weekend.. must...dump...paper
Brown gold
looks like we have an inverse camera on a stick pattern. BULLISH!!!! BTFATH!
of course once again, gold and silver can tumble and no ''investor will btfd, but when the fucking s&p and dow fall 1 pt, its a fucking buying opp.
truly fascinating world we live in today.
truth is, i have no clue why the ''market'' was open today. i understand we can say that about anyday, because its always the same shit, but they would never even think about letting the ''market'' go red on black friday.
http://www.livecharts.co.uk/MarketCharts/dow.php
nuff said.
Yep nuthin says fraud and phony like today"s DOW 30 chart.
free markets for free men
Smallest weekly range, percentage-wise, in the Dow since late 1981
For the S&P, I ony have data back to 1986.....but this was the smallest over that data period.
hmmmmm
But being perfectly flat at the top is bullish right? LOL The Fed is the only thing propping things up now, and despite what some think, they can't do it forever.
Wanted so badly to short the Russell, but experience with thanksgiving week meant upward manipulation sans volume, and true to form we saw rare Japanese candlestick patterns falling into the ancient "Blazing Horse Dung" category.
Then, as if to brazenly admit it was all a load of bat guano, RUT's closing 15m candle dump eclipses in down amplitude nearly the entire week's range. Classic, cheap and a bit dirty, like drinking Riunite from your Timberland work boots.
Don't feel bad. I got sucked for 90+ pips on that aud/usd reversal Wednesday. I was short, and covered the trade because of low liquidity. I did short again near the top, for a partial recovery.
I've been watching Cable like a hawk for several days because the 4hour MACD was way overdone. I knew instinctively that the time to short it was coming up. Then the idiot OPEC banter hit the wires and tanked it before next week.
I feel your pain my friend. ;-)
Regarding headlines, this may be an historically difficult period to trade, given so many central bankers are low on ammo, jawboning is all they've got, w/ social media and text-parsers impacting the tape before any human hand can adjust.
Still, the odd stasis following the record-breaking post-Oct-15 equity surge would suggest that: a) big boys are trying to hold things steady till post-Dec 31; b) they're just loading up to dump everything next week; c) enough hexadecimal participants are expecting a European surprise to match the Japan ambush a few weeks back, but won't push past current "all time highs" to any degree until it actually hits. The resulting stop-running jamboree will mark the interim top
KCS, i shorted the Russell via puts early this week at the top of stockcharts keltner channel of $118.35 ish... I didnt sell today. Perhaps I should have but i think a bigger move is coming.
Still have my netflix $370 puts, that bitch struggled and couldnt ever stay at 350 for the week. An illustration in downside momentum is what it is.
Curios on your thoughts on IWM going forward?
Tia
I assume you mean the Daily Keltner, which would have been around Tuesday, nicely done. I only do intraday trading (100% cash at day's end), so while I did score a bit that day on a short, I took a few days off as the holiday approached, given the frustrating action. Hard to know if this is a period when longer holders such as yourself will flourish. The Russell I've known for the past 3 yrs would absolutely track back to the 200 and/or 50 MA before any further progress, but since the Japan gap nothing is 'typical.' I'd say a stop a pivot or so above that daily Keltner top should help you avoid a mischievous return to highs, and with the 50MA near that Keltner bottom, a natural algo 'pullback' target, I'd say you're in for a good week, unless the central bankers surprise us. Best of luck
I really appreciate your comments. To me the biggest trap is draghi no longer jawboning but actually DOING something. Im not sure if they legally (within EU framework) do QE. Ive got the 50 dma targeted. My hunch is we get there.
Finally, I can order some PM during the week-end with another discount, been waiting for that for a while.
and they DARE to call it a Free MARKET lol
The trannies must be on vacation.
Yep. San Francisco.
e-minis to the rescue!
Goldman fk$#$#s covering gold short position at $1,050.00 on schedule.
http://www.bloomberg.com/news/2014-04-14/goldman-stands-by-1-050-gold-target-at-year-end-on-u-s-growth.html
Reniassance!
The End is Nigh!
That fucking crocodile just became a pelican.
The USDollar gained on the day - after 3 down days - and combined with Swiss referendum expectations, gold faded notably
Why is this reported as though normal? Swiss referendum expectations should drive the gold price up, not down. OPEC's announcement yesterday should drive the dollar down, not up.
There are no fundamentals in this market; everything is bullish for paper, and nothing else.
The expectation is that it won't pass.
http://www.ft.com/cms/s/0/7df68668-7019-11e4-bc6a-00144feabdc0.html
While abundantly accommodative policy has boosted the price of risk assets, the rising tide of asset prices has not lifted all boats. Rather, capital market pricing has disconnected from economic fundamentals. Are we to assume that fundamentals will catch up? Or should prudent investors start pruning risk from their portfolios?
The Federal Reserve implemented extraordinary measures as a crisis management tool, yet now seems to lack conviction on when to normalise rates. Zero rates were supposed to end when unemployment dropped below the 6.5 per cent “trigger”; that “trigger” became a “threshold” and that “threshold” vanished into the policy ether even as unemployment continued to improve.
Unwilling to declare victory and withdraw, it seems the Fed has forgotten the proper role of interest rates: to ensure that scarce resources are put to their best use.
Artificially low rates mean that improperly qualified borrowers obtain loans and then bid resources away from those who might employ them more productively. Along the way leverage accumulates, increasing financial risk and market volatility. One does not have to look far to see signs of building financial excess.
Issuance of covenant-lite loans has dramatically expanded, share repurchases have become a key driver of stock valuations and short maturity interest rates remain in negative real territory. These imbalances have elicited mostly yawns from Fed officialdom. Why raise rates, goes the thinking, with prices tame and labour still slack?
Alas, low inflation does not immunise the economy from financial deleveragings and economic downturns, as the 2008 housing meltdown demonstrated. A central bank that ignores credit market excesses, preferring to believe it can dial up or down whatever level of wage growth or unemployment it considers optimal, is one that does not understand its limitations.
If growth were a simple problem of credit and demand management, we would not be having this discussion. If wealth followed in the wake of money printing, Venezuela and Zimbabwe would be members of the G20. Or consider the eurozone, one central bank but 18 countries – some with Great Depression unemployment levels and others with full employment. This disparity of performance cannot be explained by interest rate policy. Rather, it is attributable to relative competitiveness between states.
In a global economy, nations offering consumers what they want at prices they are willing to pay capture their fair share of global demand. Those that deploy their productive resources inefficiently experience disappointing wage growth and high unemployment.
In the US, continued wage stagnation and low labour force participation suggest the Fed’s policies cannot be effective without a more competitive domestic economy.
The Fed’s reluctance to pull the plug on zero interest rates is understandable. Since low rates have enabled activities that would not survive a rate rise, a renormalisation will be painful. Rising rates will price out marginal borrowers. Default rates in corporate and high yield loans will rise, pushing risk premiums wider. Higher capital costs will damp asset prices. So why do it?
Because “kicking the can” means the inevitable deleveraging will be more painful. Sustainable growth comes from improvements to work process and product. Merely adding leverage to a business does not improve its efficiency; higher home prices do not increase the wages of those in the home.
The Fed can multiply the quantity of funds, but that increase does not add to the nation’s capital stock, enhance the skill of its labour or expand its access to natural resources. The game of pretend ultimately has to end. For investors, the question that matters is when and how.
When the end game comes, leverage will be forced out of the system and asset prices will fall. If the Fed is willing to recognise that ultimately its policies cannot dictate economic realities, rate rises should begin soon, presumably in 2015.
A path of proactive, controlled deleveraging means the pain will come sooner, but the severity will be relatively muted. If the Fed fails to remove the punchbowl, the belated deleveraging will come anyway catalysed by the capital markets, which will not be pretty.