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Stocks Volumelessly Surge On Biggest Short Squeeze Of The Year
Today was very reminiscent of last Wednesday's NO REASON meltup... and that did not work out so well... So this seemed appropriate...
Today was the biggest short squeeze of 2015...
No volume - you hear that!!
Stocks did what stocks do - because as Bob Pisani said "a rally was overdue" - S&P 500 pushed back above its 50- and 100-DMA having bounced off the 200DMA on Friday...Nasdaq surges off 50DMA...
The S&P 500 retraced all of last week's losses today...
Because... AAPL...? Best day since January
Small Caps - Russell 2000 - made it back above its 200DMA at 1221...but then fell back...
Today's surge in The Dow managed to stave off the death cross and avoided the 8th day in a row of losses which would have stumped Pisani...NOTE: a close below 17850 tomorrow will trigger a death cross
VIX was managed down to close to a 11 handle once again...
Credit markets were not playing along fully...
With energy credit risk surging well above 1000bps...but energy stocks don't care today.!!
As the energy sector outperformed...
Treasury yields bled higher from the early morning... biggest yield spike in a month... very notable steepening today...
The dollar was monkey-hammered as Lockhart forgot to say "September" - biggest drop in 2 weeks... notice swissy weakness early which sponsored the equity rally in the US for a while...
And Goldman notes we posted a bearish key reversal on Friday...
Commodities surged with Copper and Crude jumping and gold and silver surging on hopes of China QE... or PBOC buying rumors... or algos gone manic...
Crude's chaos today...
Don't get too excited in Copper as Goldman warns this is abunce in a downtrend...
Silver had its best day in 3 months... Gold's best day in 2 months...
Charts: Bloomberg
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Nothing to see here.
This is like watching professionals load the mortars during the day before a night's fireworks show.
Curious, but nothing compared to the show to come.
Reminds me of Mad Magazine spy versus spy. Print, dump, print, dump, announcement, moronic data reports, dump, pump.
Makes one pause and pity Wall Street in today’s ZIRP environment.
Almost, almost, but not really. Sure would be nice lot have a few friends over at the Fed. lol
There was less volume in this move today than the contents of Obama's bong.
I've seen this article on this site so many times before.
Then don't bother and go kiss some status quo ass. I'm sure that's your most valuable skill...
Shearing the Sheeple
DENIED!!!!!!!!!!!!!!!!!!!!!!!
Soon to be shortlived short squeeze.
And in other nooz...Gartman says the worst is behind us in Gold...you bitchez might want to look out below. We got a full on deflationary depression headed this way and if Gartman just went long gold, the end is near....probably just hours away given his track record, someone should just lock the jack in the box before he gets someone hurt
Nonono, I predicted this shortsqueeze because for over 3 months the media and every populist has been pumping a crash which has send droves and droves of people to short this market expecting a 2008 crash.
Short interest in this market is so massive right now, there's no way down anymore and by friday you'll have a epic shortsqueeze that will wipe out a serious amount of retail traders.
Second, oil will also start to rocket higher as everybody was selling 40 dollar minus oil. The giveaway that the smart money has bet the other way around was the cheap prices of those puts.
Oild at 55 to 60 will wreak havoc also there.
It's just always the same, cry wolf and you'll always have enouh momo's that will follow you.
And the worst part is, everybody knows that they need to take the other trade but nobody does it because they're to scared to make up their own mind.
It's like when a building is on fire, rule 1 is: never follow the crowd because you'll have the biggest chance to die.
Same thing in stocks.
But people never learn.
This week is a giveaway, go long on every index and oil.
And next week? Short the nasdaq and go long the dow. Long oil. Long gold. Long silver.
And if everybody tells you to look to the right, look to the left.
And why you may ask? QE4 is comming and it's going to be a bitch.
They'll do QE4 and they'll jack up rates also. And maybe they won't announce it in the funny pages because QE3 was open ended which means there's no real reason to tell everybody what they're doing.
I hope you're wrong because I just jumped in double-short the DOW. For the last 2 months, every time it goes up 1% or more I double-short, and every time it goes down 1% or more I sell my short EFT (DXD). So far I'm +2.7%, +1.8%, +.8%, +1%.
Woops I gave away my super-secret strategy...
Well, look: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2...
This is a repetitive chart before every bull run.
Most people I know are short like I said last week. But most people I know are also telling me that there's a pickup in order since last week so good numbers will also push the dow. Remember, a fart is enough for a 3% rise, imagine what actual good news will do.
So sell you dow puts, go long and buy nasdaq puts. That's where the carnage will happen.
And look at the dollar, something just happend over there also. There's a drop comming that way also.
Looks like the next move is they sac the Dollar to keep markets rising on a nominal basis. I think this happens regardless of a lift off but especially if there is none this year.
I think they could carry the SPX to 5k by taking the dollar back to cycle lows. The problem there is what's to be done about gold? I don't think they can hold gold down this time against any major dollar decline.
There's no more gold left to short.
From 5 million ounces in the comex down to 350k ounces which suddenly appeared.
You can't short if there's nothing to cover if the trade goes bad.
Sudden Debt, then this will break the comex when the record short interest attempts to cover, right?
and,
Does this mean a new bull in precious metals?
I think so. And I went massively long last week.
I've bet a house on it.
No offence, SD, but, I think you are riding on the edge of a wave down...don't fret...been there a time or two myself, but now is not the time to be BTFD in hopes of a quick move up....there are just too many indications for me to mention that we are in a battle that will resolve lower from here...can we go higher? sure....is it likely in the next few weeks? probably not. There will be some panic before this move works itself out whichever direction.
No offence, SD, but, I think you are riding on the edge of a wave down...don't fret...been there a time or two myself, but now is not the time to be BTFD in hopes of a quick move up....there are just too many indications for me to mention that we are in a battle that will resolve lower from here...can we go higher? sure....is it likely in the next few weeks? probably not. There will be some panic before this move works itself out whichever direction.
Welp I ended up with a 1.6% gain on that double-short, BUT it's not fair since who could have guessed we'd have a surprise Yuan devaluation today??? (Just my luck!
Beginner's luck?)
So I sold out of that trade and wait for the next 1% up...
Yeah, JMF, the RUT algos of 2013-2014 would have been quite embarrassed at not making the 20DMA on a low volume day.
See where Bof A recognized the Rut H&S ...they are a week late and a few dollars short. This pig is going down...maybe it's got a little fight left in it, but I think we are headed for 70's range in TNA soon...70's is still way overvalued but we may get a few months there before reality sets in. GL
I'd be selling this rip. Frankly, I'm selling EVERY rip until QE4 is announced.
https://www.youtube.com/watch?v=0akBdQa55b4
you're a short squeeze!
I prefer being squeezed in my shorts.
“Been Shorting Too Long” from “Been Smoking Too Long” by Nick Drake (Robin Frederick)
Well I wake up in the morning, look at the Dow
It's not even noon time, I’m already stopped out
Tell me, tell me, what have I done wrong?
Ain't nothing go right with me
Must be I've been shorting too long
Well I go fade me a breakout, but the algos are too shrewd
I take quite a bath, but the water don't feel no good
Tell me, tell me, what have I done wrong …
I've still got QE in my kidneys, cuts through me like booze
Nights filled with bad dreams of the Devil buyin’ Spoos
Tell me, tell me, what have I done wrong ...
Well when I'm shortin’, I worry ‘bout my health
Don't think about coverin', try not to blame myself
Tell me, tell me, what have I done wrong ...
Well in this blues I'm singin' there's a lesson to be learned
Don't go around shortin' unless you want to get burned
Tell me, tell me, what have I done wrong?
Ain't nothing go right with me
Must be I've been shorting too long
Dude, I envy you having the time to produce this stuff.
As my grandma used to say, you always have time for the things that are really important
Harry Potter markets in an Alice in Wonderland world.......
u can always spot the most obvious fraud days like today...
the Dow up 200 plus at the open on absolutely NO FUCKING NEWS and then the old familiar sideways trading til the close in a 5 to 10 point range for the remainder of the day...
and oh yeah, this coupled with an all out effort to cap the phony paper prices of Gold and Silver at the london close, thru the remainder of the trade in that rat infested shit hole New York, and the coup de grait in the ""nobody is trading real Silver and Gold" GLOBEX robo trading....
http://www.kitco.com/charts/livesilver.html
DEATH TO THE MONEYCHANGERS.
Damn bloody shame .... the shorts were just starting to think it's safe to get back in the water.
Everybody thinking they will get in early for rate hikes and make a shitload of money selling just got ass raped. They will do it a few more times before mid September. Must fleece everyone that is left. These greedy abominations will not leave a crumb.
I wonder if this surge is because an announcement will be made tomorrow by Greece FINMIN about a deal being finalized.?!?
Yea it was...melt up due to Fed comment that rate hike may be put off until December. The heroin keeps flowing....
The PPT did as told
Now just buy buy buy
According to Macquarie Research:
Return of the deflationary vortex
Commodities – canary in a coalmine?
Commodity prices – primarily financial phenomenon…
- As discussed (here and here) we view volatility of commodity prices as primarily a financial rather than demand-supply phenomenon. Over-leveraging and associated overcapacity as well as LT structural shifts arising from Third Industrial revolution (replacement of humans and shortening of supply chains), implies that the global economy no longer grows through trade, with volumes rising at ~2% vs. the historic average of ~6%. This is poor news for EMs, particularly traders with expensive currencies (China and Korea).
- The current deflationary pressures are made stronger by exceptionally tight supply of the US$. As highlighted in our prior publications (here and here), the pace of supply of global US$ has been de-accelerating for more than 12 months and the current incremental contribution is close to zero (vs. historic growth since ‘01 of ~15% pa). The inability of the US to improve its velocity of money (due to reluctance of consumers & businesses to accelerate spending and investment) and lack of QEs is driving shortage of US$.
- Whilst one could argue that closure of excess supply (industrial, financial, services and commodities) would ease deflationary pressures, central banks are preventing clearance by keeping the cost of capital artificially low, and hence keeping zombie supply in place, causing ever stronger and more durable deflationary episodes. Unless public sector policies change in favour of clearing excess capacity and re-starting the normal business cycle (unlikely), the only available weapon is ever higher incremental liquidity and ongoing leveraging. Hence absence of acceleration in the US velocity of money and simultaneous reluctance by the Fed to embark on QE4 contributes to deflation (via tendency of US$ to appreciate).
…higher US$ and lower commodities fuel deflation
- The self-reinforcing cycle of higher US$ and lower commodity prices fuels rising deflationary expectations. In conventional cycles of build-up and clearance of capacity as well as decline and rise in demand, low supply of US$ and lower commodities reignite demand and re-balance the global economy. In current climate of secular stagnation (here), demand does not accelerate whilst overcapacity does not close and investment stagnates.
- As a result, inflationary expectations are (again) starting to recede and the break-even rates are gradually returning back to levels that prevailed in deflationary scare of early’15. In essence, the strong deflationary vortex that dictated investment returns between Jun’14 and Mar’15 (replaced by mild inflationary vortex in Mar’15-Jul’15) seems to be returning.
No trade; no liquidity = lower bond yields; volatile flows
- As discussed in our preview of 2H’15, we are concerned that in the next six months, neither ECB nor BoJ nor PBoC will increase the level of accommodation whilst the hurdle rate for the Fed to embark on QE4 is higher than either doing nothing or slightly tightening. Given that global velocity of money continues to fall, lack of new liquidity is equal to contraction. Tighter liquidity implies pressure for US$ to appreciate; lower commodity complex and higher volatility. We continue to prefer commodity consumers rather than producers and countries with domestic liquidity. Despite risks, it still tilts us towards India, China, Taiwan and Philippines and away from Indonesia, Malaysia and Thailand.
People seem to be being "set up" for this market crash that is supposed to happen in September.
With there being so much "crash" talk, odds are that there will be a squeeze instead.
Wasn't the signal this would happen Zero posting the Hindenburg Omen boogeyman?
Bob Pisani and the entire cast and crew of CNBC - I laugh at you!!
the markets go to pot in the autumn, not during vacation time in August.
My guess is that if there is a QE4 without another serious crisis the Fed will indeed be audited...
Checkout the price ramp up in SPY at 3:59 PM on a massive purchase - 4 million shares on an 80 million shareday. PPT? Or a short hedge fund covering?