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Biotechs Butchered As Oil Orgasms In Otherwise Uneventful Day
Update: both YUM and ADBE are crashing at this moment, the first down 16%, the second down 11%, after both admitted they had been "overoptimistic" and cut and guided lower. YUM Q3 revenue was $3.43bn, vs Exp. $3.66bn and EPS was $1.00 vs Exp. $1.06, while ADBE said it now expecteds EPS of $2.70 vs previous expectations of $3.20, on revenue of $5.7bn vs $5.94bn prior.
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After soaring some 100 points since the terrible Friday payrolls data, and nearly 6% in the past week...
... today the S&P went very much nowhere, even despite yet another solid push in the USDJPY overnight...
... which was subsequently picked up by the 5Y as the correlation between TSYs and equities promptly became dominant while the announcement of the 12% cut in DuPont EPS served to push the stock as much as 12% higher on hopes the company will promptly agree to become the latest actvist fodder, one which will issue billions in debt to fund stock buybacks.
All throughout the day, the dollar index (DXY) continued to slide, and closed at the LOD, rapidly approaching the pre-FOMC level.
But the real story of the day was the bifurcation between momo stocks, manifested in this case by biotechs which were mauled once again, tumbling over 6% at the lows, and down 24% from the recent highs, closing fractionally down for the year...
... and crude oil, which soared over 6% from the day lows without a clear catalyst although there was speculation that geopolitical risks out of Syria where US and Russian planes are literally within dogfight distance, are finally catching up to oil traders.
But perhaps the biggest, and most under-reported story, remains the unexpected demand for safety in the shape of 3Month bills, whose yields tumbled following the FOMC and have been increasingly negative in the days since, closing at -0.005%. Is the bond market really hinting at NIRP?
And now all eyes to the BOJ when tonight around 11pm Eastern, Japan's central bank is expected do and say precisely... nothing. After all, as we explained, this is the last bullet both the BOJ and the ECB have, and they will delay as long as possible before boosting QE, and would much rather leave the heavy lifting to the Fed.
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Meanwhile, gold and silver are starting to show some life. The GSR suggests much higher prices to come for silver
http://www.goldsqueeze.com/analysis/long-term-goldsilver-ratio-is-toppin...
GLD breaking the 20 week. Very interesting. Doesn't portend good things to come for Gartman and Cramer as we likely break the august lows in the next week or so.
The Obamster BioTech Give Away:
The New York Times is reporting that trade partners negotiating the Tans-Pacific Partnership trade deal have reached an agreement. In order to reach an agreement the United States granted a key concession relating to biologics, which are advanced medicines made from living organisms. [1] Presently the United States provides 12 years of data exclusivity for these types of medicines, but the TPP agreement knocks that term down to 5 years.
There's a payday here ....imagine the millions in ' donations ' that will be made to the Obamao Foundation.
GSR has dropped 7 ounces in the last 5 weeks. 79.5:1 on August 26th to now 72.3:1.
That's a nice jump for silver even if it's all manipulated and criminal.
Heard the other day on Silver Doctor's that John Williams has crunched the numbers regarding the price of silver from 1980 compared to today's prices while figuring in all the Trillions in extra dollar debt world-wide now 35 years later.
Adjusted for inflation and all the money printing, John Williams estimates silver should be priced around 600 dollars an ounce today compared to the 50 dollar high back in 1980.
That means the price of silver today at nearly 16 bucks an ounce would be like 2 dollar silver back in 1980 terms when it was at the 50 dollar high.
Let's just say John is 75% wrong on that calculation, ay? Even though we should all know that John uses the proper numbers and calculations in everything else he posts on Shadow Stats.
But let's just say he's 75% off track with this.
That still puts silver at 200 bucks an ounce, folks. But I give John Williams a helluva lot more credit than ever publishing numbers that would be wrong by 75%, don't you???
I could see being off by max of 20% given that people could dispute certain ways of calculating world debt in dollars, derivatives, and all the other unknown Billions and Trillions out there floating around. It's impossible to tell what's really out there.
So let's say he's 20% off. That would still put silver at 480 bucks an ounce.
We all know for sure silver is worth waaaaaaaaaaaaaaaay more than just 15 or 16 bucks an ounce...that's for fucking sure.
We know that the paper market has blown things so out of proportion that gold is leveraged to nearly 300:1 paper to actual phyzz held in the Crimex vaults.
We know silver is leveraged at least 100:1 and probabaly now much higher.
I know that after the shit finally hits the fucking fan, no amount of paper shit dollars will separate me from my phyzz...I don't care if I get a wheel barrow filled with Trillion dollar bills. I ain't sellin'...would any of you???
But still...keep these numbers in mind.
To me, the main number is not the value in dollars unless someone put a gun to my head or some circumstance in an emergency came up where I absolutely had to sell some of my phyzz for dollars. I hope that never happens.
But what we need to do is stop counting the price per ounce and start counting how many ounces we have overall. That's the key.
How much land can I get for so many ounces of gold or silver, etc. etc.
So regardless of current prices or supply right now, just keep stackin' phyzz whenever and however much you can fit into your budget, folks.
Leaving the heavy lifting to the Fed means prepare yourself for the coming gvt default.
As Joe Kernan said
Maybe the market will embrace zero interest rates.
High interest rates are good for bankers
Good for blue chips
Good for TPP
Low interest good for small entrepreneurial companies
RISK ON
Here is a simple metric anyone can use to determine if a nation is getting a good deal or bad deal from the TPP:
Does the nation carry a national debt? If so, then the TPP is a bad deal for it, end of.
Because debt slaves always get the short end of the stick. Always.
Negative interest on 3 month, nothing like taking a loss loaning the feds money to bomb hospitals.
If they spook the stock markets, we'll have some serious NIRP.
The funny thing about PE is that earnings have obviously sucked for a while, but absent the stock buyback orgy that is rapidly reaching conclusion, they suddenly start mattering.
Unless the insiders are frontrunning the QE incoming in November? QE = lifeblood of corp bonds = lifeblood of stawks via buybacks.
"Unless the insiders are frontrunning the QE incoming in November?"
exactly what they are doing, on that belief. who knows but a handful of insiders
they do dogs, orphanages, and weddings too. i like value for my tax money.
The BOJ might do nothing but they have a belief they can always jawbone the Yen lower if needed.
"oil orgasms." I like that one.
I dunno sounds like a mess LOL
the bernank always brought the wesson
Yeah, totally missed out on the opportunity to coin "oilgasms" though.
Tyler headlines went from carnivorous to pornographic...describes the market exactly....
Keep going best read all day !!!
Dow/gold does a death cross.
"Bad Habits" from "Pink Rabbits" by The National
Markets were quiet, so I took a walk in the rain
I was just racking my brain over our next set of trades
Somebody said you over-tightened our stops
I didn't understand then, I don't understand now
Am I the one you think about when you're sitting in your trading chair, feedin’ bad habits?
Then, all the sellers were gone
You were busy sending tweets ‘cause you were trying not to fess up
It wasn't like a ‘10’, it was more like a ‘3’, not the biggest stop run you’re likely to see
I love to trade, but I don't love fighting, but you caved so fast, it was more than frightening
Am I the one you think about when you're sitting at your trading desk, stokin’ bad habits?
And all the selling was done
They were just below the pivot, planning the snap-back
I was long gold, I was in the fight !
I was coming back, knew my risk of ruin
I couldn't see you raising it so far
I leave for a minute, and there you are
I'm so surprised you want to trade with me now
I was getting used to winning more without you around
I'm so surprised you want to trade with me now
You always said I put our stops too low to the ground
You didn't see me, I was falling apart
I was playing croquet with margin clerks in the park
You didn't see me, I was falling apart
I was a television version of a Turtle trading star
And then the reversal was done
You were starin' at your feet 'cause you were trying not to fess up
Your Morrissey tape was still on
Now I always think about lost opportunities when gold breaks out
No one said it would be painless, but no need to cause your own fall
+1 I see why you chose that one
Aside from the gold move, boring markets make for slow message boards, and given this is the longest one (aside from the 'Sarao, Nav' Bob Dylan "Hurricane" parody), I figured folks wouldn't mind the use of space today. Think we'll be lucky to get to 2 pages here, not much happened.
Here's me thinking today's market was good for a channel surfer?
I guess if people are expecting the kind of volatility we've gotten accustomed to recently then the market will be tedious. Think I commented here yesterday re bears to be whipsawed today, i.e. a reference to range day, so if you anticipate such action you can plan and position. In normal circumstances I would expect the rally to resume tomorrow after today's consolidation, but with the BOJ in play overnight it's not clear yet.
btw, Kudos to "Redart" for anticipating the low today, hope that worked a treat and helped prevent a bear or two from whipsaw.
You guys made a good call, saw that 12:35 volume spike on 2m charts, but thought we'd see a standard 1:30 VWAP retrace, then perhaps new lows after 2, but when the charts looked suspicious I got out of my Russell short just before 2. You're right about positioning, I didn't buy the early rip, but instead had 4 quarter-position TZA orders from the end of the 2nd hourly back to about 1/2 way down the bar, so had a day almost equal to Mon's long despite the crappier action, cause I knew to stop early and didn't chase entry price. Took years to know how to approach each day on the fly as each 15m bar gives new info, and I think only experience works, it's not in any book I know.
You're right, no substitue for experience. Most days I won't trade the first hour though I often initially position as though either the high or low of the day has occured within those first 60 minutes.
In the wider picture I was confident the market couldn't be turned today, think supertanker :)
edit - re Redart's low of day call - I was looking to scale in long on marginal new low of overninght ES low '63.5 (half) and 1960 'magnet' (half) - hence my +1
Kan I ples haz loss?
Loss iz not possiblz
Looks like silver is sending the same signal oil is. The petrodollar is donzo, it is only a matter of time before everyone else figures it out. The sad thing is people will only notice when stocks are at zero and the dollar can't buy a loaf of bread.
"Oil Orgasms" ?----- they don't call those things pump jacks for nothin'
As most technical traders know, for every manipulated action there is an equally opposite reactive action.
It's to the point now where the manipulated upside actions have stacked on one another so extremely that the only way you're going to get a counter-reaction that offsets it is a massive gap down that (a) never fills, and (b) traps the long manipulation in a manner that is equivalent to the upside manpulation that they have wrought over the past 7 years.
I think this most recent 5-day squeeze is the last straw in that upside manipulation. It's like a massive leveraged elastic that simply has to snap. Pretty much now.
So, I think we get a massive immenent gap down. It's the only possible way for the manipulation to be unwound.
Shorts need to be very careful not to get manipulated out of short positions prior to that untradable gap.
I upvoted you, I dont know if it is because you say are making a smart assessment or because I want to believe in what you are saying.
As a reminder, the 2011 squeeze continued higher, not to say this one will repeat but just beware.
From what I was seeing today, it's my guess the 'smart' money was buying stocks so I'd conclude they don't agree with you at least on the timing of large gap lower.
Now if the market were to continue higher, say SPX 2100, the a backtest of the broken channel on the weekly chart would be a dream short opportunity :)
"The market can stay irrational longer than you can stay solvent." --- J.M. Keynes
just food for thought
A Lower Low would fit the pattern quite well. After that, new All Time Highs, the last one. For real ;)
http://tripstrading.com/2015/10/06/sp500-1987-vs-2011-vs-2015-pattern-of...