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Ahead Of The Open: Deer In Headlight "Traders" Pray For The Plunge Protection Team To Arrive
Some thoughts from Bloomberg's Richard Breslow, author of "trader's notes" on what is going through panicked traders' heads, who writes that "well before any markets open, the minds of traders are racing furiously. What do I do with my positions? Arguments can be made for most outcomes, and commentary will follow price action, not the other way around." Yes, because chasing momentum up for 7 years obivious of reality and ignorant of a $22 trillion central bank balance sheet led the "deer in headlights" to profitable utopiua.
Bashing of idiot momos aside, those who have had the "commentary" right every day since 2009 only to get steamrolled by central banks who have injected countless funny money into so-called "markets" to preserve the illusion of the status quo may be about to get their day in the sun... unless the central banks lob every last bazooka they have to prevent what could well be an epic carry-unwind bloodbath, and the beginning of the end of "faith-based" "markets."
Here are some more thoughts from Breslow:
Reasoned market analysis will have to allow for stop losses getting off-side -- or panic-struck or trying to be prudent -- traders back to neutral, the potential consequences of the markets desks of every major central bank being on high alert and prepared to act (“plunge protection teams,” to use the vernacular of the financial crisis), as well as the frustrating reality of it being Sunday evening, which means markets will open ad seriatim and only slowly.
Those that are open will have to bear the brunt of whatever imperfect hedging can be done, while opportunity-seeking will only come as the day progresses. For now, all one can look to is the tiny Auckland FX market. Any headlines from there will signify nothing as Monday unfolds.
The reality is that the price of playing poker has just gone up considerably. Greece is counting on the referendum ploy to both win a little time and shock the negotiators into compromise. Their banks can’t open tomorrow. They have added their banking sector to the pot. The ECB has frozen ELA financing. Merkel, Hollande, and presumably most others will hold emergency cabinet meetings Monday.
The IMF has perhaps provided the most interesting tell when Managing Director Lagarde said that negotiations could be revived if Greek voters show they want to stay in the euro area
“If there was a resounding ‘yes, we want to stay in the euro for good, we want to be part of that, we want to restore the status of the economy, we want to be sustainable in the long run,’’ there would be a resounding ’let us try’”
That is why some resolution still remains the base case; but that will provide little solace to those who have to trade in a few hours.
So where does that leave us? CFTC data, a very imperfect gauge, tells us that if anything, speculative positions (long USD, short bonds) have been pared back. My working assumption, based on market movement, is that this crept back up over the course of last week, and those new positions, at the worst prices, will be most vulnerable.
Bund and UST futures closed Friday on the week’s low. Will people feel good about being short bunds that dropped almost 2 points from last Monday’s high? Unlikely. But bund futures open 8 hours after electronic trading in the U.S. 10Y future. My guess is the 10Y can get to last Monday’s high (1 1/2 big figures from here) before you take a stab at fading. I’d rather sell a new low. But I still don’t like bonds, and if they get silly toward the June 19 high, the charts say, yoo-hoo Fed watchers.
When FX markets open in Auckland, for all practical purposes only EUR, JPY, AUD and NZD will trade against the USD. Again positions will trump logic. That means JPY should do well; watch multiple June post-Kuroda USD/JPY lows circa 122.50
Carry trades being covered aside, the argument for a sustained higher EUR/USD is tenuous at best. “Whatever it takes” does not include tightening and the interest differential between bunds and USTs is not going to narrow
The top side has loads of resistance, 1.1250 to start; through 1.1050 and the technicians will be crying out for a retest of the May 27, 1.0850 low
E-Minis will also need to bear the brunt of any hedging needs from a European equity market that saw Euro Stoxx 50 futures rise over 100 points last week. It may well require seeing how Chinese stocks open, oh so many hours from now, to judge where this asset class is going. But I assume we are in for a period of relative underperformance of European stocks so I wouldn’t get too carried away selling U.S. equities. On the wide, technically, E-Minis look well supported just above 2070. The Hang Seng CEI opens at 9:15pm ET. After this weekend’s PBOC rate move, the gap from April 2 should hold as a good indicator of the next period in Chinese equities.
Markets haven’t opened yet. Just some thoughts before they do. This is why traders get paid the big bucks.
* * *
Yes, "big bucks", no pun intended, until the light shines on them and there is no plunge protection team to bail them out.
And, incidentally, those certain that the ECB will preserve control, such as Goldman and now JPM, may want to refresh what happened on Black Wednesday 1992, when the Bank of England's defense of the Pound failed in just about 45 minutes.
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Please don't show up!
Shit's gittin real when the deer show up! Burn that bitch down!
don't worry suckers......mommy will save you........until she doesn't and then U R TOAST.....
What about fourth of july holiday. Fed ALWAYS ramps up into holidays. Been doing that for years.
Feel as if this whole charade has been choreographed right down to the most innocuous press release and seemingly meaningless speech. There has been ample time for the real players to line up their positions and take advantage of whatever is in store.
Kabuki Theatre of the Absurd!!
So true! Have you paid off your politician yet? /sarcasm
For now, all one can look to is the tiny Auckland FX market. Any headlines from there will signify nothing as Monday unfolds.
Bra ha ha! We'll see about that as every CB & forex broker in the world tries to shove orders through New Zealand.
That will be an extra large popcorn, please.
Meh, which Monday?
I am calling a "mixed" session tomorrow... All signs point to deep red, but, c'mon we've seen this before, right?
The markets have been ramping for a while inticipating Greek trouble. Sell to the suckers at the top. Short, and scare the living shit out of them and punish them all at the bottom. It is NOT different this time.
Someone posted a great comment a few days ago about changing the dates of the headlines on these stories, because it's all so damn predictable. Just MOAR of the same, same as it ever was.
Endless Kabuki Theater of the Absurd marathon--there, fixed it for 'ya.
flacon,
And today's end of month, end of (calendar) quarter - can 'they' let their books be offside?
DavidC
Shit will be real when we start braking out the "Dow 10,000" hats again!
No, only when they start eating them for nourishment.
Welcome back, Deer. How I've missed you.
There used to be One deer to worry about Now ZH posts a Herd. WTF....mind games
I don't think the PPT will show up. Any money used tomorrow is wasted and GONE.
They are going to have to start using "fundamentals", "strategy", "research", "trend analysis" and actual value determinations. They will have to do "real investing" and not papering over.
To big, and not secret anymore. Everyone would be "in on it" and somebody has to buy, for you to sell.
I think they will sit this one out and protect themselves and not the market or an economy or currency. It is all about self preservation now on an individual scale.
Bullish!!
BTFTop!
Haha, we took the PPT out with the Deathmobile! RAMMING SPEED!!!!
Can someone throat punch me for not having any positions going into tomorrow? Oh how i wish i had kept those ashr and db puts!!!! FUCK ME!!!
Flat is good.
Oh the doom and gloom. I'm not sure I'll be safe up here on land. OOOOOOh the horror tomorrow will bring.
Ooooohhh my god!
Yes, you rang?
i'll pass, but thanks for the offer.
It the bitch melts down , you were never going to be paid anyway, so console yourself with that.
^^This^^
Going after nickles in front of a steam roller.
I have been out, out, out, of the market because I don't think any of us are good enough to surf the wave of shit coming our way. Best not to be in the water. Even here up on land, I am not so sure I am going to be okay.
Its best Ms. I have no trouble sleeping at night, and don't worry about any "profits" I
didn't make in the market.I made a fortune in it once , and promptly lost it.Not the first
fortune I've made and lost either. Keeping your gains in life is the secret.
Hope you dont have a pension.
So yeah...I plan on sleeping well by making money on this shit show too.
It's not likerecovery has been nothing but non existent over here as well...
Anyone with a bank account or a pension is in the game.
In the meantime, I'm buying more Russia. :)
Yes. I have no control on those two, but I have minimized exposure.
Now I see why you moved to Florida.
Too bad there is no economy down there either...
Im the parasites parasite nowadays.Florida is a happy hunting ground.
All those years doing real things as an engineer, and manufacturer.
What a fool I was. semi/s.
The PPT and HFT guys can move faster in either direction than you can.
Now is the perfect time to stand back and be a zen master. If you're stressed go count some phyzz for a while until it goes away.
Netflix and Apple babyyyy tooo the mooon. Hooooo Reee Fuuuukkkk muvva fukkkkkaaa
While I don't want the good people to Greece to suffer any more harm, all I can say is I hope everything gets burned to ground, figuratively speaking and we have entire herds of bankers singed to a crisp in the process.
Reset can't happen soon enough.
https://www.youtube.com/watch?v=9TYezSrzUUs
Fingers crossed.
Sacrifices to some god worthwhile?
I expect ALL or most of the experienced traders have left the titanic and all that's left are the fresh faced innocents (hehe) about to get ass rimmed.
Hold on tight and it's never a bad idea to wear bicycle clips around the bottom of your trousers as it could get very messy.
"Closed is closed."
It's not like when the Bank "reopens" suddenly people will start lining up to deposit their money there...
This will stop TPP and TAA in its tracks.
There will be more to worry about than another way to fleece muppets.
Goldman, you and the pols in charge that day will have to answer for hiding the true balance sheet of Greece when it was accepted into the Euro.
This will not go well for the 1%.
The PPT will show up in force within an hour. If you think that they will step away from the biggest financial crime in history, you are wrong. In fact, they will have Ken-Boy/Citidel put in a green close.
This morning I thought about my two most revered fantasies:
Kate Upton and I spend three days at the Ritz Carlton drinking champagne and blowing loads.
A Russian submarine surfaces 300km off the east coast and a missle lands on 33 liberty during business hours.
I can happily jerk off to either one.
Only one thing is certain: gold and silver will get slammed as usual.
If Europe is heading for a currency collapse you better find a safe place to store your valuables all right.
Switzerland would not be at the top of my list either...
Dear ISIS,
You are cordially invited to our annual July 4th BBQ and fireworks show. Please RSVP to 1600 Pennsylvania Ave.
They've been sending all their invites to "ISIL" -- no wonder why we haven't heard a peep.
I'd personally avoid all city centers this coming 4th of July weekend...
I have been waiting for the deer and Donkey Kong. Now I know shit is getting real at ZH.
Get it on. Bang a gong...
https://www.youtube.com/watch?v=XspsJACj8WY
Get it on, bang a gong – get it on. OH
it be real, when short trades halted, many markets many miles, contagion’s Ragin - while - my guitar gently weeps.
You were inverted - look at you all. OH baby I love you all day long, love you good time. I want to be with you every day.
I want to tell ya why. I wish I could sell one, wouldn’t want to be long… brake those chains that bind you.
Yesterday’s seasons are no disgrace. Battleships travel very far and then they’re there. A smile upon your face. Caesars palace, Silly human race…l
I can feel it coming in the air tonight. It’s all been a pack of lies. I been waiting all my life for this moment, OH lord!
The hurt doesn’t show, the pain will grow – OH lord!
Hey jude don’t make it bad. Hey jude refrain! Let it out & let it in - liquidity that you need is a sad song made better, better, better - na na na na na na na na na na na na na na na na…..
LIGHT’S OUT
Meanwhile I’m still thinkin
Ive spent the past 15 years watching as the world turns econonically and over and over its the same pattern.
Shit blows up overseas, the NIKKEA falls, followed by Europe ALL RED everywhere as everyone thinks.."this is IT"..
U.S. Market opens having been preceded by futures down few hundred.. Then not so mysteriously the market reverses course.
The calvary has arrived we will SAVE the world. I surmise it wont be any different tomorrow...
Sinkholes, fracking, injecting liquid(ity), earthquakes.
Economy or Geology, makes no fucking difference - except with economics, there are no more large tectonic plates left to be found.
Create your own with bullion.
I grew up in a place that had many deer - BIG ones
When you see deer eyes in your headlights the natural reaction is to slam on your brakes and swerve to try and miss them -
I have known a few people that did just that and ended up swerving off the road into a tree at 50+ MPH -
What you should do is brake hard but keep going straight down the road - if they are in the road you run the stupid mother fuckers over - sure your car will get wrecked - but your chances of running off the road into a tree or telephone pole are much less - and that is just the way it is.
lmao...true dat.....I live in deer country...I lost count of how many I've bagged with my vehicles...but three insurance companies can tell you....One night on IL 161, I topped a hill and 9 of the Mother Fuckers were standing in the road, less than 100 feet in front of me...running 70.....I didn't even hit the brakes...until all of my headlights went dark....I managed to kill 5 and maim another......Two of them were wrapped up in the fenderwell of my F250......After removing them, I managed to limp 8 miles back to home with just my parking lights and one of those halogen emergency lights that go in the cig lighter....That's what those deer have to look forward to once TPTB let er rip....Muppets will be murdered...
All this happening and just now I have problems with my blackberry and my apple... how on earth!!
https://www.youtube.com/watch?v=kAG39jKi0lI
All apple employees are out marching in the SF gay pride parade
central planners will quickly close the gap
don't worry
Target 2 imbalances are just that I would imagine are just that..."imbalances."
So now we debit the account thereby annihilating the entirety of the program?
.
Rate my point please ":)
NO DOLLARS FOR YOU!
The deer are a bit early... Lets see what actually happens. Could be blast off to DA MOON!
I think the deer situation depends on where you are. I have to imagine vritually all Greeks and a good chunk of bondholders in Germany would agree, it's deer time.
Would not be all all surprised if it ended up being a record up week in NY, tho.
It would pay Gold Sacks to simply pay off what the Greeks owe out of their immense profits.
No.
Gold Sacks helped set up these dominoes. They helped Greece hide the rotting sausage in accounting tricks (calling things that were liabilities, assets, off books) so they could get into the EU.
No way are they going to cough up anything on this.
What ever they set up, they are shorting the shit out of it.
I do have doubts about conterparties paying off, however.
Correct, MsCreant.
One (of many) interesting things to know would be whom exactly those counterparties are. And who is really, knowingly or not, holding the bag on the original derivatives GS set up with the Greeks.
I'll know it's getting scary when they start talking about whether or not it's a "credit event," and if the phrase "London Rules" as applied to bonds ever makes it to mass media.
I often wonder if they have the ability left to pull off another 2008 and subsequent rally (a much shorter lived one) before Mad Max.
And of course gold and silver will get hammered. There's no safe place to hide from the banker vampires.
oh the deer in the headlights. ok everybody go long, it happens every fuckin time zerohedge shows that picture. 100 fuckin percent. so i'll watch the /es open and let it do what it do and when i sense a bottom or it locks down, im going long with a quarter metric shit-ton, wish me luck, as i may need it. or maybe i'll make a full metric shit-ton of frn profits.
BTFD its software stupid.
"In a measure of deepening American concern about the consequences for global stability if Greece is kicked out of the euro, President Obama on Sunday urged German Chancellor Angela Merkel in a telephone call to find a way to keep the country within the currency zone. The White House said that “the two leaders agreed that it was critically important to make every effort to return to a path that will allow Greece to resume reforms and growth within the Eurozone.”
http://www.washingtonpost.com/world/europe/greece-reportedly-decides-to-...
With a plunge protection team, the S&P fell 57% in 18 months.
They have already arrived this evening to plunge PMs back down from a nice bump.
The summer before world war one.
Wouldn't be surprised if they brought down a Euro airliner and blamed it on Russia to get their war started and to take the people's mind off the trillion Euro bailout soon to come.
We plunged some folks.