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Stocks Soar To Best Week In A Year On "Mother Of All Short Squeezes"
The week summarised... as BofA put it -"It's Not A Risk-On Rally, This Is The Biggest Short Squeeze In Years"
With China shut and The Fed going full dovish panic-mode over growth fears, world markets went crazy...
- S&P up 7 of last 8 days +3.2% - best week since Oct 2014
- Russell 2000 +4.5% - best week since Oct 2014
- Nasdaq up 7 of last 8 (since Death Cross) closed above 50DMA
- Trannies up 8 of last 9 closed above 100DMA +4.9% - best week since Oct 2014
- Dow up 8 of last 9 +3.5% - best week since Feb 2015
- "Most Shorted" +4.7% - biggest squeeze in 8 months
- Biotechs -2.3%
- Financials +2.2% - best week in 3 months
- Asian Dollar Index +1.4% (worst week for USD vs Asian FX since Oct 2011)
- Dollar Index -1.2% (worst week for USD vs Majors in 2 months)
- AUD +4% - best week sicen Dec 2011
- 2Y TSY Yields +6.5bps - biggest rise in 7 weeks
- 5Y TSY Yields +11bps - biggest rise in 4 months
- WTI Crude +8.9% - 2nd best week sicne Feb 2011
- OJ +4.8% - best day since March
- Silver +3.8% - best week since May
LOLume!!
The last 8 days have seen a massive short-squeeze... 2nd biggest in history
The last 2 times stocks were short-squeezed this much, did not end well...
And the following stunning chart shows the percent of S&P 500 names above their 50-day moving-average has soared from 4% to 60% in a few weeks...
h/t @ReformedBroker
* * *
Off the Payrolls lows, it's been non-stop...
Credit tracked stocks all week but decoupled this afternoon...
VIX has fallen for 9 straight days... the longest streak since Oct 2011..
Energy stocks outperformed and Healthcare (Biotechs) were the laggards...
Treasury yields surged all week but Friday saw the push slow a little... (everything but 2Y is now higher than pre-payrolls)...
The USDollar Index slipped notably after the FOMC Minutes but had been weaker all week... (AUD rose 3.8% on the week)
Commodities all rose on the week
Crude had its 2nd biggest week since Feb 2011...
Gold broke notably above its 100-day moving-average and Silver had its best week since May (breaking but not holding its 200DMA)...
But The Ags were the biggest movers today after USDA forecasts sent everything crazy... (and Orange Juice had its best day since March)
Finally, it appears stocks have decided to re-de-couple from any fundamentals as Macro and Micro data has tumbled in recent weeks...
Charts: Bloomberg
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Next Monday; "Counterparty Risk Weighs, becomes meme as banks race to the trough"
What is the relative volume relative to? Previous day? Historical average? Monthly?
The downtrend, i.e. prior selloff
Obama will not finish his second term! Current Events Linked to Ancient Biblical Prophecy!
http://motivationdose.com/is-america-babylon/
Come on man 17k, goto sleep u dont hit it, dow, woosies
Shows that "death crosses" don't mean Jack Shittt...
Is the short squeeze over? Is it safe to come out now?
Stay where you are until Gartman goes long.
Probably should wait till the 16th.
Tease. Now I can't WAIT for the 16th to see what happens.
20K on the way
from “I’d Rather Dance With You” by Kings of Convenience
I'd rather dance with you than trade with you
So why don't we move our stops so they have more room?
There's space here for us to shake (“Our calls expired in June”)
Even if I could hear what you said,
I doubt my top picks would be interesting for you to hear
Because I haven't read Jim Cramer’s book in years
And the only stock I bought didn't like it at all
I'd rather dance, I’d rather dance than trade with you
The TV’s too loud and the ‘Fast Money’ crowd
increases our chance of misallocation
So let your hips do the talking
I'll make you laugh by acting like Guy Adami and “Beeks”
And you'll make me smile by trying to fade all of the swings
Fading all of the swings, fading all of the swings
Trading all of the swings . . .
I’d rather dance
I'd rather dance than trade with you
+1 Appeared a good day for K-channel surfing?
God no, worst day session trading day (and week) for RUT in months, complete horizontal tape-painting, if doji were any smaller today it would disappear from the Daily chart entirely. OPEX is next FRI, but machines acted today like complete stasis was important (Fri's hourly chart is almost comical). But, at least I broke even, when first starting I would have gotten killed on a week like this ...
Glad you did ok :) Never good to look for trades which aren't there, chasing shadows,etc.
Earnings announcements next week to bust overnight traders, should make for interesting OpEx.
This week was enough for me for the futures markets. I've had a love-hate relationship with ES for a little over a year now. Forex makes more sense to me.
Always appreciate your market commentary, KCS...not to mention your parodies.
The day we all wake up (well, maybe not all of us) and see that every *market* has been frozen solid at their ATHs I think is fast approaching.
My guess? Something BIG happens in the USSA this Monday (the 623rd anniversary of Columbus 'discovering' Amerika), like oh say multiple cities getting ISIS-bombed simultaneously, and then Tuesday: the largest market crash ever seen.
Or, not.
You don't totally understand. There will be no getting out. It will stay the way it was, forever.
That's how this ends. Either stuck at ATHs, or the machines turn on us and everything goes to ZERO overnight.
Either way, it's not a very bright scenario.
bbbbut the dividends will get paid, right? Right?
Yes, the negative dividends from those negative earnings will be deducted from your account.
the ussa is really getting squeezed,... as in afghanistan 3.0 civil war just heating up big tyme, not good!
ussa can or cannot confront russia, so they will use israel which is about to implode internally via irredentism du`jour payback?
ussa challenging china's south china's seascape which surely could trigger a massive blowback from caught in the middle mini-me EM's...?
north korea ready to do a missile launch [?] test over japan.
and saudi arabia on the precipice of a coup, or worse yet-- viva la`civil war
think that the ussa can't go bankrupt as the ussr became insolvent in 1989--- think again?
we've been thoroughly programmed to accept a 'cyber-911' of some sorts.
power grid, banking system, etc...
When they said "it will", it didn't.
They now say "it will", it WON'T.
And the BEST PART is " NOTHING HAS CHANGED" ...
"Exsqueeze me???!!"
According to Bank of America Merrill Lynch:
https://app.box.com/s/0o21rzvo4bdff5ka4hk3lvd1d3fmower
The real cost of QE
QE was not a free lunch after all
Eight years after the crisis, we are still debating about the recovery and whether the Fed should hike from zero rates. The world economy is actually losing momentum. Things could have been worse, in our view, without aggressive central bank easing. However, we argue that relying too much on unconventional monetary policies could be a reason for market turmoil this year.
We should have known something was wrong
The Fed “taper tantrum” could have been the first signal that QE had gone too far. The second warning may have been the across-the-board EM sell-off that started in mid-2014, as QE tapering was coming to an end and the market started pricing Fed tightening, a sell-off that intensified substantially this year.
The point when things started going wrong
The Fed and other major central banks were the first to act when the global crisis started and we believe their actions helped avoid another great depression. However, at some point monetary easing appears to have become the “go to” policy tool to address every problem and risk in the economy, when action in other policy areas might have been more effective.
This is when market behavior started to change, reacting positively to bad news. Wall Street was increasingly deviating from Main Street, which in our view was not sustainable. We believe that excessive reliance on unconventional monetary policies has had side effects. We have been experiencing these side effects this year, and there may be more to come.
Now what?
The story of the year so far may be that of a negative feedback loop leading to a bad equilibrium. First, risk assets sold off expecting the Fed to tighten. Then, the sell-off went too far and started affecting the real economy, including in the US. Now, the Fed is not tightening as a result. However, postponing Fed tightening does not necessarily increase the demand for risk assets. This is a new regime, in which bad news is bad news. This is how it is supposed to be, but the adjustment back to normal has not been and is not going to be smooth, in our view.
In the very short term, risk assets could find support from oversold levels. We would be tactically short the four major G10 currencies, against almost everything else, as major central banks either stay on hold (Fed, BoE), or probably ease even further (ECB, BoJ). Our analytical tools also support this view.
However, our risk-on FX recommendations are only tactical. If the US data improves in the months ahead, the Fed will likely tighten and risk assets could sell off again. If the US data remains weak, or weakens even further, we would expect risk aversion, as the threshold for QE4 by the Fed is high—and even were it to be enacted, more QE may not be as effective.
Hey man, it's Friday in the Hamton's............
You still haven't figured it out...this is legalized ponzi-scheme. Which means, no matter how shitty it gets, they will pour endless amounts of money into the casino to give the impression that everything is awesome! And even when every investor is out of the market and the Fed, through their shadow accounts become solitary owner of all the equities, and there is revolution in the streets, the stocks will continue soaring because.....well because it's all about giving the impression that everything is awesome!
According to Macquarie Research:
https://app.box.com/s/bh0unh5y596z3ktwi6rwivmsnuyhwl1r
Equities – irrational exuberance?
In our latest commentary we ask whether equities are appropriately assessing risks or whether higher FICC volatilities are more rational. Both cannot be right.
Are equities reflecting fundamentals? Most leading and trade indicators seem to be highlighting that despite aggressive monetary easing by 20+ central banks, deflationary pressures remain strong and growth rates in both DMs and EMs are rapidly slowing. In response, FICC are signalling an elevated level of risk.
However, equity investors seem to be assuming maintenance of ‘goldilocks’: low rates & ample liquidity; slow (but steady) growth and low (but positive) inflation.
Who is right? We argued here that most leading indicators have lost their informational value as private sector no longer has any LT visibility, and hence survey-based responses frequently send misleading signals. Given that FICC investors tend to be intensive macro data users, they are highly susceptible to whiplashes of false signals. As long as public sector continues to dominate macro outcomes, FICC investors are at the mercy of unpredictable shifts, driven by CBs rather than fundamental drivers. Therefore, our traditional assumption— that whenever there is a conflict between FICC and equities, the former is almost always right— might no longer hold, as FICC investors are now just as ‘blind’ as equity investors. Hence, equities just might be right.
However, we are concerned on two counts: (a) global economy continues to reside on a de-facto US$ standard and the US is not generating enough US$ to enable continuing global leveraging (absent strong recovery or QE4, supply of US$ is falling at ~5% clip); and (b) efficacy of conventional monetary policies seem to be largely exhausted. As global velocity of money declines, incremental QEs required to grow liquidity are on an ever increasing scale (~US$1.5tr+ in ’16 and escalating to infinity). Hence, there is a need to re-assess nature of QEs.
We doubt that the alternative of CBs abandoning desire to regulate and ‘smooth cycles” and letting deflationary business cycle to reset itself is on the cards.
If conventional QEs lost potency and aggravate global deflationary pressures, why do equities assume that lack of tightening and further QEs would guide economies towards ‘goldilocks’? We believe that it is a simple ‘Pavlovian reflex’. In the past, this relationship worked because QEs were generally successful in temporarily reducing deflationary pressures. However, short of massive rise in monetary stimulus, it seems that incremental changes would no longer be able to achieve such an outcome. Are we ready for more extreme policies? The next stage is likely to be CBs directly funding fiscal spending, investment and consumption. However, to accept such a radical shift requires ‘accidents’ and a severe slowdown. Over 12-18 months, chances of both are high but low over ST.
Hence in the ST (3-6 months) we anticipate neither aggressive QEs (with at best limited efficacy) nor extreme unconventional policies. Therefore, as investors progress into ’16, supply of US$ is likely to continue contracting, deflating global demand and constraining liquidity. This would lead to regular bouts of volatility rather than goldilocks and could easily reverse current equity euphoria.
Hence, we are reluctant to back weaker EMs, and continue to play ‘safe’ by emphasizing countries with trapped local liquidity, some flexibility of monetary & fiscal policies and countries that do not excessively rely on commodities. This continues to tilt us towards India, China, Philippines and Taiwan and away from Indonesia, Malaysia and Thailand. We also continue to emphasize our ‘Quality & Stability’and ‘Sustainable Dividends’ portfolios. When would be the time for our ‘Anti-Quality’ portfolio? Probably sometime later in ’16-17.
russians are toast soon, without china NATO Turkey about to shut ur ass up! largest f16 force wipe clean slate brigit, patriots fk ur s300's, about 2 days work, one sub missile takes out 60 talk shitters. ready puty lets go mofo
no talk shitter ever got between me and Christine. if they did... WATCH OUT
The Devil’s Dictionary of Post-Crisis Finance
http://blogs.reuters.com/breakingviews/2015/10/09/the-devils-dictionary-of-post-crisis-finance/
American writer Ambrose Bierce published “The Devil’s Dictionary” in 1911. Bierce’s acerbic definitions ranged from government to commerce and life in general. He displayed a profound understanding of finance, for example defining “riches” as “the savings of many in the hands of one”.
Breakingviews published a pioneering appropriation of his form in 2007, when the global financial crisis was barely beginning. Call it “The Original Devil’s Dictionary of Finance”. But it no longer seems adequate for the post-crisis task. Herewith part one – for the letters A to K – of the sequel, updated and enlarged for the world of hedge funds, private equity, structured finance, subprime equity and the like: “The Devil’s Dictionary of Post-Crisis Finance.”
Part two will be published next week.
A
Activist: One who makes importunate demands for financial engineering*.
Alpha: An investment return above that of a benchmark index, usually achieved by luck or by “gaming” the index.
Analyst: A stock puffer whose purpose is to generate brokerage commissions. See Chinese walls.
Arbitrage: The time-consuming and risky activity of buying an underpriced asset whilst simultaneously selling an equivalent overpriced asset. Eschewed by Wall Street, which instead profits from regulatory arbitrage, accounting arbitrage, jurisdictional arbitrage and fiscal arbitrage.
Asset price bubble: The most noticeable consequence of the U.S. Federal Reserve’s easy money policy. See ZIRP.
Auction house: A place where Wall Street high-flyers blow their windfall gains. See Contemporary art.
Austerity: Also known as “sado-fiscalism”. A forlorn attempt to stave off government bankruptcy.
B
Bandwagon: That which every investor jumps upon. “If you see a bandwagon, it’s too late.” (James Goldsmith, financier.)
Bank: An institution which, by applying leverage and mismatching assets and liabilities, earns short-term profit and generates long run losses.
Bankrupt: A person who has run out of liquidity. Also, the intellectual state of modern economics.
Basel: The Swiss home of the Bank for International Settlements, an institution which creates global banking rules thus setting the stage for regulatory arbitrage and, thereby, precipitating crises at regular intervals.
Behavioural finance: The field of study resting on the notion that an asset price bubble is the result of “irrational exuberance” (see Greenspan*) rather than the inevitable consequence of bad monetary policy and conflicts of interest on Wall Street.
Bell curve: A visual representation of the false assumption, baked into most financial models, that outcomes are what statisticians call “normally distributed”.
Bernanke, Ben: Former Fed chairman who failed to spot the housing bubble before it burst and in 2007 claimed that U.S. subprime mortgage problems were “contained”. After the Lehman Brothers bust, Bernanke succeeded in re-inflating the Greenspan* superbubble. Soon after leaving the Fed, he was rewarded with a job at Citadel, a hedge fund, which presumably didn’t hire Bernanke for his market insights. See Revolving door.
Biotech: A pharmaceutical Ponzi scheme of a company. See Burn rate.
Bitcoin: A digital tulip bulb.
Black swan: A common bird on Wall Street, renowned for its fat tail.
Bonus: In banks, a large payment out of short-term profit to retain “talent”. While a bank’s profit is generally illusory, bonuses endure.
BRIC: A “Bloody Ridiculous Investment Concept” (Peter Tasker, fund manager and author). An emerging bull market acronym comprising the first letters of Brazil, Russia, India and China coined by Jim O’Neill, a former member of theGoldman Sachs marketing department.
Burn rate: The alarming pace at which technology and biotechnology companies run through their cash piles.
Business school: Networking hotspot where young people pay large sums of money to have their scruples expensively removed. See MBA.
Buybacks: Debt-funded purchases of a company’s own shares in order to enhance growth in earnings per share. A tool to maximize the value of a chief executive’s stock options….
Basel
Not just home of the BIS
Also home of the "Basel Accord"
http://www.investopedia.com/terms/b/basel_accord.asp
Cabal has setup a web across the globe already. There are NO sovereign nations in a world where one cabal runs all the relevant CENTRAL banking operations.
This started with the end of WW2.
If a world war could not stop the machine, nothing will.... or at least nothing that's worth surviving.
The system will be allowed to crash in order to reset WHEN the cabal says so.
Free money heroin is all the market needs!
Before your brains get squeezed in the vise of the HFT'S and algo's, just in case you haven't gotten the message...
NO SHORTING ALLOWED...EVER!!!
...with the exception of July 23 thru Aug 25 (or starting June 25 in IWM, -15%), 9/17 thru 9/29 and, very likely, another opportunity within a week or two that could rival 2008's downdraft, but in general, longer term, you're correct, as long as the planet keeps turning stocks eventually go up, for a perpetual short to collect you'd need to be dead, which makes being correct less fun ...
It is one thing to speak from your ass ..
It is another to speak from proven history ..
A proven solution from history. If it worked back then, then what is to prevent it from working now? History never repeats verbatim. But, it certainly does rhyme in more ways than one. Especially when those that were present in past history are available to us today. Right FUCKING now! So why do we ignore them?
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (WANTA-Book)
"Mother of all short squeezes"
...Stop giving away my family secrets...that's what my Mom said when I was born...
I've been thinking about something all week as the markets have risen in the face of bad economic news. Maybe the rich getting richer is just a byproduct of the Fed's monetization of the global markets. Maybe failure to prop up global markets would render trust funds, public entitlement funds, public retirement funds (calpers, SS, etc), college endowments insolvent? Such an event would cause not just an economic collapse, but also a major social upheaval. We're talking globally. These institutions' actuarial models were broken even before the 2008 meltdown and they are still not fixed. Janet knows this and are causing brown and yellow soiling of her depends. Short of colossal global economic growth, the only thing keeping these social and economic foundations viable is massive western central bank monetization, which is what we are witnessing daily in the miraculous market levetations around the world....US, Japan, Western Europe. Do you think Janet Yellen can level with the public regarding this?? Hence, perpetual lying. Current circumstances are akin to keeping a man eating gator in a hold because letting it go would result in it turning and eating you. How long can the central bankers hold on to the hypothetical "gator" (global markets)?
It has the looks of a short squeeze. However, the Industrials, the Transports and the S&P 500 have broken out above the September 16th closing highs, and this is very bullish and turns the primary trend of the stocks market as bullish.
Some thoughts about the likely short squeeze, and, nonetheless, the new primary bull market here:
http://www.dowtheoryinvestment.com/2015/10/dow-theory-update-for-october...
http://www.dowtheoryinvestment.com/2015/10/dow-theory-update-for-october...
Everyone that has a position of his own, is more or less biased to that side. What we do then, is search for information that confirms our view. And this is the result.
Candle Sticks say a lot about investor behavior as I believe it’s a representation of the market’s psychology. And after last week’s relentless short squeeze (so they say), I noticed a Low Energy day last Friday.
A Low Energy Candle Stick, is a candle stick that forms after a short term uptrend in which the close is at or near the open of that day. In my view, this pattern that we saw yesterday, is a sign of doubt in the market, at least for the short term. It doesn’t have to be a perfect doji.
What I did was the following. I searched for similar patterns as last Friday. And I found 28 periods in which this candle stick pattern popped up since DEC 2014. Strategy to follow: enter a short right before the market closes or at the open of the next day. Set your stop loss and take profit at 1.5%.
The outcome based on 28 trades (excl transaction fee and no leverage) adds up to 15%, which is equal to more than 300 S&P500 points!
http://tripstrading.com/2015/10/10/sp500-suffering-from-low-energy/