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Bonds & Bullion Jump As Stocks Dump After Post-Payrolls-Pump
Nothing to see here...
While the headlines will be about stocks double-down-days, the most notable moves were in gold, bonds, and USDJPY - Is bad news bad news again?
Notably, since the September FOMC meeting "disappointment" there is a clear winner (and clear loser)...
Of course WMT's carnage was the biggest news...
Which weighed heavily on the major indices (though obviously not Trannies)..
Leaving everything red for the week...
A close-up on WMT shows just how insane the move was and the massive volume...
Treasury yields tumbled the most in a month (10Y back below 2.00%)...
Interestingly 5s30s curve steepened to 12-month highs...
FX markets saw major turmoil as The USD Index death cross contoinues to weigh (with USDJPY tumbling)...
Commodities rose on the USD weakness (aside from crude which - aside from some opening shenangigans - was deadstick)...
As Gold broke to 4 month highs, breaking green YTD and above the 200DMA - this is the 8th up day in the last 9...
Charts: Bloomberg
Bonus Chart: Peak Farce?
I don't have to make anything up anymore. pic.twitter.com/udLGZx3xTy
— Rudolf E. Havenstein (@RudyHavenstein) October 14, 2015
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Nice bond bubble Wez gotz
Bond bubble my ass.
These aren't the droids you're looking for. [/Obi-Wan]
Long silver, short EPSON toners
Treasury yields tumbled the most in a month (10Y back below 2.00%)...
thought it was worth repeating. BITCHEZ
Off da lows by 1 point! Yes! This call for a Walmart run to stock up on moar unicorn meats!
"Kook and the Gang to ring the closing bell."
I thought NYSE and CNBC had jumped the shark already; shark jumping the shark?
Walmart is being bled out, just like Sears was. M.B.A.'s in charge, run for the hills!
They could have hardly found somebody more appropriate, for this market. Turn on the disco lights ! Party tomorrow too, because Netflix... :)
Well , at least the 000.1% took a licking on WMT . Shock and awe for Uncle Warren and the Walton crew.
"The Night They Drove Old VIX-ie Down" by The Band
Maxwell Pain is the name, and I burned a short-seller’s flame
Till Dimon's cavalry came, and stocks tore up the charts again
In the fall of '09, bears were humbled, they’d just started to thrive
By October 10th, VIX futures fell; it's a time I remember, oh so well
The night they drove old VIX-ie down, margin bells were ringing
The night they drove old VIX-ie down, and the bulls kept singing
They went "Na, na-na-na-na-na, la la na-na-na-na-na la la"
Back with my wife at the CME, and last week she called to me
"Maxie, quick, come see -- there goes the E-mini !”
Now, I don’t mind swapping moves
From bulls to bears, ‘cause the money’s so good
Their fake-outs mislead, it’s no easy test
But we can never stop thinkin’ this parry was theft
The night they drove old VIX-ie down, closing bells stopped ringing
The night they drove old VIX-ie down, it’s for the fences they’re swinging
They went "La, la-la-la-la-la, na na la-la-la-la-la na na"
Like my father before me, I will fade demand
And like my brother above me, who took a bearish stand
He was just 18, toutin’ Elliott Wave, but a spoofer laid him in his grave
I swear there’ll be blood flow on the Street
You can't take Max Pain for long
With stocks in retreat
The night they drove E-minis down, with all the bulls still clinging
The night they devalued the yuan, and all their hands were wringing
And we went "La, la-la-la-la-la ..."
Thanks KCS, you also just reminded me waht a great song the original was.
I did a quickie version, but while listening to the tune over and over I thought "holy heck, this song is amazing", so I put in many hours to try and get every syllable to fit the meter, retain the original tone, etc., glad you liked it.
nice.......
According to The Money Enigma:
http://www.themoneyenigma.com/qe4-high-risk-low-reward/
QE4: High Risk, Low Reward
- Only a few months ago, market participants were certain that the Federal Reserve would raise the benchmark interest rate in September. Fast-forward to today and respected market commentators, including the Chief Economist at Goldman Sachs, are suggesting that the Fed might need to embark on a new round of monetary easing.
- Suddenly, the possibility of QE4 seems very real. But would the Fed really embark on another round of monetary base expansion? And what circumstances might justify the launch of a new round of monetary easing before the tightening cycle has even begun?
- The view of The Money Enigma is that the “risk/reward” of QE4 doesn’t stack up, particularly given current financial market conditions. QE4 doesn’t make sense from an economic perspective, nor does it make sense for the Fed politically.
- From an economic perspective, the benefits of more QE in the current climate are likely to be very limited. The $4 trillion expansion in the Fed’s balance sheet has already had the “desired effect” of reducing the required return on risk capital down to exceptionally low level. The marginal benefit for markets and the economy of further compressing the required return on risk assets is likely to be limited.
- On the cost side, an additional round of QE creates the risk of tipping long-term expectations in such a way that the value of money declines precipitously and prices rise sharply.
- The view of The Money Enigma is that the inflationary response to QE1-3 was subdued primarily because the market perceived the QE experiment to be “temporary” in nature. If the market suddenly decides that QE is a more “permanent” part of the landscape, then this could have a very damaging impact on long-term economic confidence and inflation expectations.
- The only circumstance in which the risk/reward of more QE may be justified is if there is a dramatic deterioration in financial market conditions (i.e. a 25%+ decline in equity markets). Nevertheless, it is not clear that, given current circumstances, the Fed could catch a falling knife even if it wanted to. Moreover, the long-term risks associated with attempting to stage-manage the market with QE4 probably outweigh any short-term benefits.
- From a political perspective, the case is arguably much clearer. A decision to undertake QE4 at this point in the cycle would indicate that the Fed’s bold experiment with quantitative easing has failed. If the Fed finds itself forced into further easing before the tightening cycle has even begun, then serious questions will be asked about whether the theoretical models that justified QE1-3 were sound. Politically, this would put the Federal Reserve in a very bad position, one that the Fed will attempt to avoid at all costs.
As much as I hate to say it, I think this might be close to all the RUT bears are gonna get for a minute here. Reversed the bear put spreads to bull put calendar spreads with the long legs out to next week and lower down the chain just to lock in some gains and for another shot at a spread on the put side next week. Loaded up on some "just in case" TNA 72 and 75 calls for over the next few weeks for cheap.
Letting the short weekly calls ride to soak the remaining premium but did buy some 68 calls for this week going into the 3:15 drop in case they ramp this week.
Plan to keep selling against the weekly calls, but going to wait for the next pop...If we don't get a pop here for the next few weeks, no worries, just playing with a few of the houses chips at this point.
We tagged the 20 dma, IWM 4hr RSI almost oversold, OBV starting to trend up/stabilize. Selling seems very orderly...more like changing of hands than panic selling. Gut tells me we are being setting up for a bear trap into some bullshit Fed or other CB intervention. Too many bears expecting a revisit to the lows...think we get there eventually but they might test our patience.
But....I'm typically fucking early so take it with a grain of salt, but at least unlike Gartman, I don forget WTF I am each morning which is a perma-bear, at least until all the bankers are hanging from lamposts which at that time I'll reasses my identiy. (wishful thinking I know)
Love these daily gonzo TNA option posts, like a combination of James Joyce, Thomas Pynchon and Santelli rolled into one. Rode the TZA train down past the 20 DMA myself today, but abstained from afternoon trading (unfortunately), w/ it's rather bizarre action. I might agree with you (as I usually do), but only 'cause you used the word "minute". Daily SMI has joined DMI in the red, so if we tread water and the Stochastic can get below, say 55, then it's very likely we'll see the Keltner bottom before we get above the 50 DMA again. I suppose the key will be SPY and it's date with it's 20DMA, RUT seems to following, not leading like in the past. Thankfully, I don't have to decide on these things until 10 each day, unlike you, and understand your suspicion (i.e., see VIX parody above). Interesting time for the Russell (!)
Believe me KCS...the fundamentalist and much more sane alter ego I suppress daily agrees with you 100% and sees more deterioration ahead, but that poor bastard has been bludgeoned to death by RUT ninjas so many times that I only let him speak publicly at friend and family events. At this point my trading style is like a knock out, drop dead gorgeous, scantily clad woman walking into a stadium filled with horny over-roided men looking around and saying "ok which one of these animals is gonna try and fuck me first"...that's my day in the markets.
Hedging my bets and playing both sides is the only way I make a buck....take a little less, but keep some sanity.
OK, I've read enough books on postmodern literary theory (actually readin' one right now, as a matter of fact) that I can say, at the 95% confidence level, that JMF IS Thomas Pynchon. Quite an honor to have you here on the ZH boards :)
You're right, the RUT of 2013-14 could easily spike well past the 50 DMA in one day, just wonder if those ninjas have dulled their swords by now. Still, being complacently short this index has blown out more accounts than Gartman's recs. Cool that you can work both sides of the fence at once. Godspeed to us all ...
I am not very educated in literature but I'll take that as a high complement coming from you (The Financial Yankovich of our time)...STEM's sometimes miss the more elegant side of the educational system.
If those ninjas are walking around with dull swords it's because they've hit bone (mine) one too many times. GL tomorrow...give'm hell
If you guys could just accelerate the move lower tomorrow before trapping the bears, that would be cool. Still lookin for an OpEx related low ahead of Friday's open. Wanted ES 1960 magnet no. Most everything has a consolidation look still. GL
Lots of put open intrest in IWM...they are either toying with them or it was smart money....I'm leaning toward smart money but that is a big payout for the market makers...might have a battle on our hands. Crystal ball is cloudy at best.
Edit: I will say this, all of my call buys today were made by market makers and they were at what I would consider fair value or better, so that is in your lower camp favor, but I am hesitant to include that in my overall thesis...computers aren't always "in control"
+1 You do well to trade both sides, something I've never been able to do with real money.
Must admit I like the advantage (over the "house") of not being in the market.
Also, tend not to trust options data so close to OpEx, prefer to rely on price action.
Of course, if their text-parsing algos read ZH message boards and start fading JMF's strategies, then god help us all ... :)
10 year money ......yeah
Back in grade school, I was taught that cheating employees of their wages was a "sin that cried to heaven for vengeance." WalMart has a long history of cheating its employees. "Vengeance is mine, sayeth the Lord."
Kool and the Gang have been in business since 1969. How many companies represented at the NYSE can say that?
Jungle Boogie, y'all.