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Biggest Short Squeeze In 4 Years Leads To Longest Winning Streak Of 2015
Everything must be awesome, right!!!
This 5-day run is even bigger than the ramp off the October 2014 Bullard lows...
This is the biggest 2-day short-squeeze since October 2011 (the last time the market squeezed like this was after the Black Monday plunge... which saw new lows hit)
Volume was abysmal...
Across asset classes since Payrolls...
* * *
Off Friday's lows, the move in stocks is epic...
On the day, cash indices surged again... (note that S&P remains just shy of the 50-day moving average at 2000.25)..
But The Dow rallied back to its 50DMA...
As VIX was clubbed like a baby seal...5th day in a row... (biggest 5 day drop since mid July)
As USDJPY did the heavy-lifting..Spot The Difference..
Energy was the best-performing sector (most squeezed) as crude surged...
Notably, financial stocks bounce is entirely decoupled from credit markets...
While the broad credit market rallied, No deals priced in the high-yield market on Monday.
The primary market has been shut since September 25. Meanwhile spreads continue to widen. The average high-yield bond spread hit a new 2015 high of T+683bp.
The average spreads on Double B, Single "B" and Triple "C" rated credits hit new 2015 highs of T+477bp, T+700bp and T+1323bp, respectively. The high-grade and high-yield average spread differential hit a new 2015 high of 503bp.
Treasury yields continued to spike all day...
The USD was heavily bid during the US session after weakness again overnight...
Silver has been the biggest winner post-payrolls as Gold, Copper and Crude are all clustered around the same gains...
Charts: Bloomberg
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everything is A-ok. SPX +100 points from friday AM..
I got tired of screaming after +1980. I really don't give a shit anymore. Portfolio goes to 0? Fine, I don't give a shit any longer.
nice run for silver today, though. and PM stox doing even better....many up > 10% today.
makes me feel a tad better about all the doubling and redoubling i've been doing the last couple years.......
"The stock market rallied today on indications the FED will not raise interest rates."
Guaranteed fucking snippet you will hear today.
pods
I'm hearing many more QE4 snippets as the day wore on. Dangerous shit, I think.
Who has money to move a market like this based on bad data? That should tell you everything you need to know about Stealth QE.
Short sellers crushed again? It's rigged!
It's the classic "front run" for silver & PM's.
They have to ramp into December (to get all the scared 'stawks' sheeps on board). Then, after Thanksgiving, PM's get absolutely monkey hammered (while markets are closed).
Sheeps rush to sell. Banksters pick up the carnage with their year end fiat confetti bonuses.
It's been a nightmare for shorters who shorted the crap out of these stocks.
Same thing for all the other stocks also as to many retail "investors" thought it was a sure thing to go all in on shorts and writing options like there's no tomorrow.
I was at a investment seminar a few weeks ago where everybody was constantly asking how to profit the most when shorting this market.
It was just crazy what those "guru's" told them to do.
I asked the room what the possibility was for a rebound and well... almost everybody found that funny as hell and nobody gave a fuck what I was telling them.
well....
taking the models into account of the simulations that where done on some of those guys possitions....
I guess some of them are now hangiing on a rope, putting a gun to thier own heads or are packing their bags to try to run from their missery.
Their losses are insane right now and most of them where betting with money they don't have.
And then there's the real shortsqueeze that will happen when options expire this money because they all believed shit was going to happen this month.
AND HEY!!!
There where a lot of ZH readers in the room!
They should have known better and most only ready the posts that confirm their beliefs....
remember, ZH isn't the oracle of delphi and doesn't give investment advice.
it's a fact check site. And that's why I love it!
Confirmation bias is a siren's song and we're all victims of it from time to time. As for me, I agree with your position. Shorting this market (unless only to reduce the beta of a portfolio packed with capital gains) is a bad risk/reward tradeoff.
Still sell the rallies - nimbly.
Nothings changed.
Great Post S/Debt !
Most 'investors' do not plan how to turn the tables when their short positions are attacked.
If they actually planned it out they would realize most short strategies proffered at those seminars are complete garbage.
well, what scared the living daylights out of me was the questions from those "investors"!!
They where explaining how to write calls and puts and most of them didn't even fully understand what options are!!!
They where asking the most basic questions and where going to write calls and puts????????????!!!!!!!!!!
I was like "oh dear oh dear"
I'm not a saint, I did the same mistakes also when I started investing in the year 2000 and believe me, I lost a shitload of money.
And the worst part is when the first trades are succesfull! I still remember how I was going to retire in 1 month back then if I only stepped it up.
Back then, I had a trading account that only needed to be setteled at the end of the day!!! I was 23 years old!!
Needless to say that ended badly.
And then there was this room full of people who also started but with way higher leveraged postions... it's just sad but greed was in their eyes and you can't talk sense to people who have the virus.
Only phyzz for me, and hard assets. With all the shit going down in the world today, the flagrent manipulations, fraud scandal after fraud scandal, I just can´t understand why people still want to participate in the "markets" at all...especially if they are ZH readers! Crazy!
jamming it higher in advance of a war with russia / Iran and china?
Relax, it´s a Muppet slayer short squeeze. There will be blood on the dance floor.
and the pendulum swings, who are they going to blame the collapse on this time, Putin?
Trump.
Earnings.
This changes nothing. The market is headed south. I've never been more certain of anything in my life.
Well I am a bit worried this crazy mf's will take the market again to 2100...
I am surprised SP is only 7% from ATH
Take it to the moon for all I care. At this point it doesn't really appear to matter where you are standing when the asteroid hits.
Ok. Sure. Fine. Whatever. Cool. Neat.
Pull my finger. No, not THAT one. THIS one.
Don't fight the FED! ZIRP until mid-2016, then NIRP and QE4 right before the election!
What's another $18 Trillion in debt - when the first $18 Trillion is unpayable in any dimension or definition of reality?
We're all going to live forever! Sound money is evil! All bow before the pyramid of Mammon!
They would have to do the NIRP & QE repackaged in Q1 or Q2 at the latest in order for the election "effect". Do not be surprised if there is no election and we end up with "King Obama" - just saying it would not be a surprise.
Remember the "Debt Ceiling" was kicked down the road till December because that is where all the "dirty legislation" is passed against the people.
People scoff at volume, but if big pensions were 'all in' we wouldn't have seen such a thin tape today. Seems like another vacuum, like we saw in mid-Sept, that could take us back a little higher to pierce the 50 DMAs, even in the Russell, where institutions may be waiting to re-short. Paradoxically, it often takes a few low-volume extreme days to clear the decks of short fuel and allow a more meaningful breach. No one knows the future, but you're correct in that this isn't out of character with a longer, protracted bear in its early stages.
agreed....this is the most telling point the last few weeks......big uptix on low volume, then mad hi volume crashes down.
as a scientist, i note that it is taking on the characteristics of instability...increasing fluctuations of increasing amplitude.
i expect blood. i am in cash, pm's, digger stox, and oil....and no margin at all. waiting it out and redoubling the pm stox when they dip harder.
keep stacking, brothers and sisters.
Totally agree.
Volume IS the key for any market, and a huge clue as to where the fucking elephants - no matter how much we hate them - move.
Investing 101 stuff....and 99% of people on the planet have no clue.....
Agreed...fully unloaded my stash today so I am totally calendar bear spread on TNA at the moment "at favorable prices"(Gartman speak). Even bought up some weekly puts late in the day today(my flier for the week)...sold the calls a bit early and missed about a $1 more upside but you have to pick a spot somewhere. Still have a little juice up in the 70's if they keep pushing. Would love to see a little relentless press for the next 2 weeks to roll these things forward a few more times before they blow out spreads on these big down moves. Shitty volume, but how could it not be, at this point, the machines are just circle jerking...as another poster ...think sudden debt mentioned, retail kids are trying to short here recently and they are getting pounded, but I hear from the same sort of guys...thing is, these guys are only playing with a couple grand...they aren't gonna fuel another moonshot...a few days and they are margined out. Sell the rips (unless we are deep in oversold territory...then wait a few days)
Work it, JMF, work it ! I wanted to short today, but even after 2:00 never got a signal, that tells me that long-only pensions are totally waiting this out, while the big prop desk shorters are being patient (or, just screwing with 100% cash day-traders like me, waiting till 2:45 a.m. tonight to dump again). Love to dialog with you 'holders', as I have my ideas about the future, but only act on my hourly chart signals, then go to cash by 3:45, having no idea whether I'll be long or short by 10 the next day, nothing really to talk about (sniff). As you know, it can take weeks for any prediction to come true, and I don't have the patience to wait. Of course, I'm 50-100% 3X leveraged while in a trade, think I've finally gotten the hang of juggling the chainsaw daily, no missing digits (or decimals) yet. :)
Yeah, I hear you...that is just inherent with your style. The damned thing about trading options is the whole time conundrum. If you trade weeklies, then you need to pick a spot at some point to catch the premium for the week, which starts going downhill all things being equal into Wends close. If you are early, well, premium is premium and a rising tide will lift both boats, but you better have reserves, not too wide a spread and be able to out roll the momentum...all you can do is hope your collateral was obtained on the cheap. Nothing worse than rolling to another week for 0 extrinsic when you paid a large premium for your hedge. Unless you want to tie up $4k per contract to go naked which is what my broker holds hostage for one naked contract in TNA(starts getting expensive when you are trading several hundred contracts). I buy collateral when there is blood in the streets, and then I sit and wait like a Venus flytrap ;)...often boring, often thankless, but that's the game...and the last and best advice I can ever give anyone in the options game...especially the weeklies, always leave some on the table...if you can close out a spread for 5 or 10 cents, do it...Friday was a prime example. I closed out on the morning plunge for net debit 6 cents on a substantial position...even re-sold against the hedge into Fridays close, if I would have road it to the close, I would have been paying out more like 2-3$ net debit. I've learned that lesson more times than I care to admit....and it sucks ass to watch the counted chicken turn into a loss in a matter of minutes on a Friday...spoils the whole darn weekend. You should start dabling in the option pool a bit, you obviously have the mind for it...good book "Getting Started in Options" that's where I started...the rest was trial and painful error...years...mmm decade or better ;) GL this week
Thanks for the vote of confidence, I actually own the huge "Options as a Strategic Investment" tome, as well as a few Guy Cohen books, and actually started my trading career with AAPL options (talk about trial by fire). Then, I decided to investigate, purely as a small daily $ addition, a "pure daytrading" strategy using TNA/TZA, became obsessed w/ solving the puzzle, abandoned options to study this full time, did my own 'analysis' via Excel and FreeStockCharts daily, lost a boatload over several years, but think I've finally solved the puzzle, with a new solution that has a 1 to 1.5% avg per day potential, that is, when I actually follow it correctly. Given daily compounding, I may not need anything else over time, but have always loved options, and may dabble again someday. I'm waiting for the JMF e-book before I start, however. Thanks for your insights.
Just wait for earnings to begin to crush all the MFers
Earnings are fake numbers. They can report anything they like, who will stop them?
Absolutely.
There wasn't any legitimate reason for the racket to be up 300+ points today. None.
But, it was...
If you're a racketeer, and you'd like some kind of gain for the year-end bonus, you might find a way to pimp stocks up to move merchandise.
If you're the Fed, and your desperate to get off zirp, you might pump the casino up, mimicking a recovery, so you could justify a credibility-preserving rate increase--even if only a tiny 25bps.
Or, you could be trying to spike the punch once more, before earnings reality shows up. Take take the money and run...
But, how the racket could gain on Friday's jobs numbers is beyond legitimacy. Were I anywhere near this thing, this late, I'd be cashing out now, and running like hell. Let 'em have it.
And QE4?
If the American people allow the bastards to pull that one again, KNOWING it won't work--but will hurt them even more--I'll be very, very surprised.
m
We were highly oversold going into Friday from a technical perspective...even on the preceeding days, you could feel a reseliance to the lower moves down (they were orderly and reluctant). Not condoning cronyizm, but they didn't exactly have on their poker face this past week. It's going down, we'll get there, just not in a straight line and probably a few headscratchers along the way
Agreed...but when?
I mean, it looks like the delusion of control and recovery is way past the red zone.
m
Seems like a mushroom cloud over NYC wouldn't even faze stawks these days.
No, not these days, just since Friday at 10:30 AM.
Not so long ago the Euro bourses were off a couple percent because some VW Diesel cars have a (pretty serious) emissions problem. (Which also sent the price of palladium up a ridiculous amount. Here's a hint- the Russians have large stockpiles of palladium. Platinum works as a catalyst for gasoline engines too, it's just more expensive. Calm down.)
Through last Tuesday nothing could lift stocks (they were selling off on no real news just like in August if we're being honest). We're now in the manic mode, we're panic buying on bad news because bad news is good ? Prepare for the depressive phase in 3..2..1..
Actually the software issue is like all asset classes except PM's; they are rigged and blown up by Central Bankers. The VW software is designed for different regional emission standards, so the EU standard would be different for the US standard etc. So when the EPA used the EU VW's for US testing; it gave the impression that VW was trying to cheat, but you see when you have GM, a state-owned car company and a German business environment hostile toward the state-sponsor; well you just got to sent an $18 billion dollar message.
I find it interesting, too, that it's a foreign company being threatened with an eleven-figure penalty when they didn't even kill anyone. Nonetheless the reality is VW may be stuck with very angry customers who might not be able to renew the registration on their cars. That's a big problem regardless of your opinion of the underlying emissions issue.
Like ekm used to say, stocks are just a video game. Numbers whizzing across monitors.
Whores drawers
PPT Nuke
c'mon man. call it what it really is. it's an engineered rally driven by banks & hft pile ons because friday behind the scenes "insight" was given by the fed to member banks that rates will not rise any time soon, perhaps not until 2017.
"You Can’t Hurry Doves” from "You Can't Hurry Love" The Supremes/Phil Collins
I need those doves, doves to ease my mind
They need to hike, so I’ll know the world’s fine
But mama said:
You can't hurry doves
No, you just have to wait
She said hikes make them queasy
They’re afraid markets will break
But how many head-fakes must I stand
Before they quiet the doves so I can trade again?
Right now the only thing that keeps me hangin' on
When I see my margin, yeah, it's almost gone
I remember mama said:
You can't hurry doves
No, you just have to wait
She said doves will stay easy
Until it’s just about too late
. . .
No, doves, doves won't hike easily
But I keep on waiting, anticipating
For that loud voice to speak from the Right
For the VIX and ARMS to spike up some night
I keep waiting, keep on waiting, but it ain't easy
But mama said:
You can't hurry doves
They’re all such slow-pokes
When the Chair even mentions it
God, she nearly has a stroke ...
Then Phil Collins.
And the Inverse Gartman ETF ends its five year winning streak...... Can he possibly be right two days in a row? Is he still pleasantly long?
He'll double down now and lose it all.
Tomorrow I'm "All-In" the SP500 Rocks! DOW is goping to 20K. I Can Feel the AWESOME!!!
Yea ME TOO. Just think of all the New Nike shoes those ISIS guys will need from getting blown up and running away. I hear thats the go to combat footwear. If your gonna outrun a bomb you gotta have me some Airs. To da MMOOOOOOON!
s/
Ownership at CNI says "Dollar will never crash. Never."
I don't know what to think anymore.
It will not crash; it will eventually VANISH. AND it is not a matter of if, but when. I'm guessing no later than the end of 2017.
It would be nice if the banks were out of the markets so that they could not distort everything the way they do.
- They distort volume
- They distort price to the upside
- They give incentives for non-GAAP accounting
- They distort short squeezes
- They distort information flow
- They distort speed
The markets are simply not credible as long as the banks are manipulating them.
Stealth QE4 is already happening via the Fed's PPT buying stocks.They are doing this tontry and prevent a mass selloff.
Just look at these artificial rallies as proof. No way this in legitimate buying based on fundamentals.
Audit the Fed !!!!
Its still different this time.
Nice one Lester! " Stealth " .... You mean like holding up the Markets in Broad daylite for 8 years?
Yeah, Fucking Stealth!
Yeah, Wake up and smell the stealth Bitchez!
Since when did fundamentals have to do with anything?
The Fed didn't need to buy stocks at all. The bears were their own worst enemy.
I expect bears will be whipsaw-ed tomorrow.
Huh? Whipsaw-ed-er-ed? 100 point straight-line-up rally in the S&P (on no news) hasn't been enough to qualify as being whipsawed?
No, they've been taken to the wood shed, now they're in hiding. But some will try their luck tomorrow.......
and then regret it.
I'm glad he said that; he just cursed the Bull.
Can you smell the bovine excrement?
Just a minute. Let me plug in this Air Movement Device.
Until the debt ceiling is raised by congress (expected in late October), treasury cannot issue new debt, and can only roll over existing debt while living off borrowings from trust funds. This reduces liquidity in the treasury market, with increased prices and lower yields. This is advantageous to China and other emerging market treasury holders who may now be liquidating. Thus, recent trends have not been to their disadvantage to the extent that some claim. But what they do with the proceeds will have an effect on whether their respective economies deflate and deleverage, or expand domestically. Unhappily, the probable result will be capital flight, with negative effects on exchange rates and greater instability.
If, in fact, we are in a short squeeze in the US market, it is an excellent example of the destructive effects of short-selling, creating artificial volatility and price mis-signaling, but, as ever, creating nice opportunities for speculators.
This is absolutely disgraceful! Complete dishonesty!
A man in a hot air balloon realized he was lost. He reduced his altitude and saw a man below. “Excuse me, but can you help me? I promised a friend I would meet him an hour ago but I don’t know where I am,” he said.
The man below replied: “You are in a hot air balloon hovering approximately 30 ft above the ground. You are between 40 and 41 degrees North latitude and between 56 and 57 degrees West longitude.”
To which the balloonist replied “You must be a broker.”
To which the man on the ground said: “I am, but how did you know?”
The reply came from above: “Everything you told me is technically correct but I have no idea what to make of your information, and the fact is I’m still lost. Frankly, you’ve not been much help so far.”
The man below responded: “You must be a trader.”
To which the balloonist replied: “Yes, I am, but how did you know?”
To which the man on the ground said: “You don’t know where you are or where you are going. You have risen to your current position due to a large quantity of hot air. You made a promise which you have no idea how to keep and you expect me to solve your problem. The fact is, you are in exactly the same position you were in before we met, but now, somehow, it’s my fault.”
nice spin on an old joke
The market action is screaming a QE frontrun.
You sure it's not spectacular earnings season?
Yes based on lowered expectations.
He may be right about the front-running of QE, but it must be packaged under a different name.
I saw somewhere, probably ZH, that QQE, which is "Quantitative and Qualitative Easing"; Japan will try it first, then the EU and US...just a guess on my part.
War is always good for the market once "boots" are on the ground; the run up to the boots on the ground it usually is negative for the market, but than again what is usual. We are in unprecedented times as a nation and world.
JP and GS needed to "work" some holiday shopping money for its clients. No really!
How does JP Morgue and GoldMan define clients? Me, Myself and I???
aren't rallies in bear markets parabolic?
IN WHAT UNIVERSE DOES A REAL MARKET BEHAVE LIKE THE ONE WE HAVE TODAY? I am not short so I am not bitter. This is truly madness now. This is by far the most unnatural market I can recall. Data that should matter is pushed aside. We are 18 months overdue for a a real pull back, but it is becoming more evident that the financial overlords will do anything and are grasping for a kitchen sink to keep 2015 together.
and apparently immuned to "War Talk"...go figure.
The Fed is doing stealth QE now via the Plunge Protection Team to try and prop up this market.
The Fed unaudited, so what's to stop them from printing a few billion and handing it to Goldman Sachs and other primary dealers to buy stocks?
Whilst your's is the consensus opinion, markets will go up.
Throughout today's cash market traders where looking for a real pull back too, just on a smaller scale.
The same thing happens at new market highs.
We no longer have an economic cycle but a POLITICAL one. Obomba will do EVERYTHING possible to levitate this until he leaves.
And I think it increasingly possible we have another, Dark State operative at work here besides the Fed, PPT,"administration "
Seal; Are you hinting to maybe few hundred Billion or more, of missing Trillions from the Pentagon, being thrown at the "Market" ?
A good war will solve all the world's economic woes; some things never go out of "style" with psychopaths.
If the markets continue to push higher (which I doubt), then you can bet that there are more "boots on the ground" than we were previously told. I see a short squeeze on the horizon.
Sometime on or around October 17th there is going to be an event that will not escape the world's attention or will get the world's attention as another way of putting it.
At what time?
Bulltard comes out soon and says revovery working well. DOW proceeds to jump another 500 points.
It's what the Fed says still, not the real numbers that count. The HFTs parse the headlines.
Todays has been a bullish parade
US Stocks are close to signaling a primary bull market signal. If the S&p 500 managed to better its Sept 19 closing highs, a primary bull market would be signaled.
Furthermore, today Chinese stocks have reversed their bearish trend, and a new primary bull market has been signaled.
And, in spite of all the bearishness that sorrounds precious metals, SIL and GDX (the silver and gold miners ETFs) has signaled a primary bull market today.
All this according to the Dow Theory, as explained in-depth here:
http://www.dowtheoryinvestment.com/2015/10/dow-theory-update-for-october...
The stock market rally is due to Treasury's 0% yield.
Here are some signs of a coming recession.
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
http://michaelekelley.com/2015/09/27/vix-predicts-pits-while-pundits-have-fits/
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
And, on top of this amazing set of news... GARTMAN WAS RIGHT.
I had a feeling we had moved into a new set of rules when the manufacturing data came out the other day and there was 'panic buying'. The investors have had one of those 'bad guy' moments where they have let go of any pretence of playing by reality based market rules and have levelled with themselves over the fact that they are completely, openly, rigging the markets!
The Conservative conference and attendant protests is on in Britain atm. One can only hope that there is a large drop in the markets incl. the FTSE on their last day... The seventh. And one punishing enough to undo all the bullishness done today and more, and to make headlines!... But like I said... One can only hope!
Regardless, sweet dreams ZH'ers, the market awaits us on the morrow!