This page has been archived and commenting is disabled.

"In Fed We Trust" Is Back: Risk Soars On Hopes Economy Collapses

Tyler Durden's picture




 

After yesterday's epic squeeze ramp into OpEx, and today's hanging-by-a-thread range on no volume, we couldn't help but think of this...

 

And with this week's rally, valuations for the S&P 500 push back towards highs (P/E >18x once again)...

 

And we warned what happens next...

 

As Gold, Bonds, & Stocks all rise as The Fed rate-hike disappears over the horizon... From "rate-hikes are good for stocks" to "please njo rate hikes, we are not ready"!!!

 

A very mixed bag for stocks this week... Trannies ugly (down 2.4% - worst week in 2 months, after last week's best week in 13 months) but Nasdqq up for the 3rd week in a row (the first 3 week gain since Feb 2015's big squeeze)...

 

On the day,  futures drifted off the late spike highs overnight, spiked into the open (thanks to opex pinning), chopped around in a narrow range on dismal data before liftoff into the close sparked by crude into NYMEX Close then USDJPY lifted futures into p[anic-buying mode..

 

On the day the late-day ramp dragged all but small caps (and Trannies) into the green... on terrible volume.. Today's exuberance blamed on hope for a shitty print from China on Sunday night!!

 

Here's how the ramp was achieved - Crude's ubiquituous trend reversal into NYMEX Close tehn USDJPY hyper-beta into the close...

 

VIX had quite a week (most notably in VXX - the VIX ETF)...

 

This dragged S&P 500 just into the green post-QE3...

 

"Most Shorted" stocks have seen another rampalicious squeeze in the last 24 hours into opex but end the week lower (after last week's record-breaking surge)...

 

Valeant is a great example of today's illiquid insanity in stocks...

 

And TWTR...

 

Treasuries end the week lower in yield (with a notable flattening in 2s10s and 2s30s)...

 

2s30s dropped 3bps on the week - the biggest flattening in 10 weeks...BUT 2s10s is now the flattest since May 2013...

 

The USDollar continued to drift higher against the majors (extending yesterday's gains), faded during US pm session and ended the week lower...

 

The USDollar also fell for the 3rd week in a row against Asian FX, almost fully retracing the China devaluation surge...

 

Commodities were mixed on the week with crude tumbling (though bid today) to its worst week in 2 months and gold and silver rising (with copper limping lower)...

 

Gold had its best week in the last 5 (and is up 4 of the last 5 weeks)... closing baove its 200-day moving average...

 

The biggest mover across the commodity complex was in Coffee...biggest drop in almost 8 months...

 

Charts: Bloomberg

Bonus Chart: Bad news is officially Good news...

 

Bonus Bonus Chart: Philosophical thought to end the week...

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 10/16/2015 - 16:11 | 6676648 arbwhore
arbwhore's picture

Gold smacked below the 200dma in last 5 minutes. What can we say but LOL!

Fri, 10/16/2015 - 16:12 | 6676655 Deathrips
Deathrips's picture

I trust that WTI is going to the 20s. Washout..#sheeprobbery.

 

RIPS

Fri, 10/16/2015 - 16:16 | 6676684 SheepRevolution
SheepRevolution's picture

<--- I'm the guy laughing in the video (short)

<--- I'm the bitch falling down (long)

Fri, 10/16/2015 - 16:22 | 6676720 Stuck on Zero
Stuck on Zero's picture

Will NYSE change its name to "The Potemkin Exchange?"

Fri, 10/16/2015 - 16:50 | 6676874 Soul Glow
Soul Glow's picture

MOAR COLLAPSE!

:)

Fri, 10/16/2015 - 17:20 | 6676984 CheapBastard
CheapBastard's picture
12 US housing markets getting rocked by foreclosures

 

http://www.businessinsider.com/states-with-highest-foreclosure-rate-2015-10

 

 

"Yes we can!"

Fri, 10/16/2015 - 16:35 | 6676805 thesonandheir
thesonandheir's picture

You knew it wouldn't last, back to full on manipulation next week.

Fri, 10/16/2015 - 17:22 | 6676996 BullyBearish
BullyBearish's picture

The WORSE the economy becomes, the BETTER the "market" performs...What's Not to Like??

 

H O R $ E $ H I T   !!!

Fri, 10/16/2015 - 16:13 | 6676659 Automatic Choke
Automatic Choke's picture

everybody buy a few vix calls today? 

Fri, 10/16/2015 - 16:13 | 6676662 Hype Alert
Hype Alert's picture

The new mantra is the more bad news the better.  Seriously, with all the hope for bad news, sabotage becomes an issue.

Fri, 10/16/2015 - 16:16 | 6676675 thismarketisrigged
thismarketisrigged's picture

I CANT WAIT UNTIL NEXT WEEK WHEN THE S &PEEE  GOES UP LIKE 5 PERCENT BECAUSE OF NO RATE HIKE FOR LIKE THE 10TH TIME.

 

BECAUSE  WHY WOULDNT THE ''MARKET'' BE UP AGAIN TODAY AFTER A FUCKING FRAUDULENT RALLEY YESTERDAY ON ABSOLUTELY NOTHING.

 

JUST BUY AMZN, FB, AND GOOG, AND EVERYTHING WILL BE AWESOME. ''MURICA!!!!!!!'''

 

EVERY BANKER SHOULD BE THROWN INTO CROC INFESTED WATERS, IT WOULD BE FUCKING AWESOME. MUCH BETTER THAN A BULLET TO THE HEAD

 

LAST WEEK- OIL RALLIES AND THE TALKING HEADS SAY THAT IS A POSITIVE FOR STAWKS.

 

THIS WEEK OIL IS DOWN 4 PERCENT AND THE TALKING SAY THAT IS A POSITIVE FOR STAWKS. MAKES SO MUCH SENSE

Fri, 10/16/2015 - 16:27 | 6676755 Keltner Channel Surf
Keltner Channel Surf's picture

You short, bro ?

Fri, 10/16/2015 - 16:33 | 6676794 thismarketisrigged
thismarketisrigged's picture

NOT SHORT OR LONG. NOT IN THIS FRAUD OF A ''MARKET''.

 

 

JUST SICK AND TIRED OF SEEING BANKERS ON WALL ST STEAL FROM MAIN ST ON A DAILY BASIS AND GET AWAY WITH IT.

 

THIS SHIT NEEDS TO END, PPL NEED TO BE HANGED

Fri, 10/16/2015 - 16:54 | 6676889 walküre
walküre's picture

start at Wall Street but don't stop there.. DC is closer than you think

Fri, 10/16/2015 - 20:10 | 6677500 ichan
ichan's picture

Yeah I'm thinking a Hunger Games kind of thing. So we pit them against one another and watch them kill each other off.  Imagine the ratings, youtube parodies, SNL skits, promo goods, action figures, ad buys... Great entertainment and great for the economy.

Fri, 10/16/2015 - 16:15 | 6676679 we built this city
we built this city's picture

Well so far markets are soaring(indices) in contrast of all Zh's predictions.

 

S&P only 5% down from ATH- yes 5 percent. 

 

Central bankers are so far in super control and despite very low volumes markets are soaring.

ZH is very right about economy but very wrong about stocks . 

 

Fri, 10/16/2015 - 16:22 | 6676719 John Law Lives
John Law Lives's picture

ZH is not a stock-picking site.

Fri, 10/16/2015 - 16:42 | 6676846 Keltner Channel Surf
Keltner Channel Surf's picture

Well, I shorted "US Macro" and made a bundle

Fri, 10/16/2015 - 18:29 | 6677193 playdoh
playdoh's picture

It's a Gartman / Cramer trade-fading site tho; what else d'ya need?

Fri, 10/16/2015 - 16:23 | 6676721 Osmium
Osmium's picture

S&P should be able to make a new all time high in mid November.

Fri, 10/16/2015 - 16:24 | 6676732 lehmen_sisters
lehmen_sisters's picture

If you can find anyone who can accurately predict what stocks will do all the time, let me know , because i'll let them manage 2,000 of my cash.

Fri, 10/16/2015 - 17:19 | 6676982 venturen
venturen's picture

You are peerfect for Goldman

Fri, 10/16/2015 - 16:24 | 6676738 monk27
monk27's picture

It's not "despite" but because very low volumes that markets are soaring, smart pants ! That's how algos work. By the way, don't forget to cash in from time to time... 

Fri, 10/16/2015 - 16:30 | 6676775 LawsofPhysics
LawsofPhysics's picture

"soaring"?  LOL!, yes, almost back to where we were several months ago...


Fri, 10/16/2015 - 16:30 | 6676778 debtor of last ...
debtor of last resort's picture

As zh is right about the economy, it's right about stocks too.

Fri, 10/16/2015 - 16:32 | 6676785 Oldwood
Oldwood's picture

The money must go someplace as no one gets paid to hold cash. The market is people getting paid to place bets, to "invest". No one will pay an advisor to hold cash. So....there is the " market".

Fri, 10/16/2015 - 18:06 | 6677126 we built this city
we built this city's picture

Guys that voted are hypocrites

or super naive .

 

I don't recall reading an optimistic article about markets nor the economy. 

 

All Zh's commentary is how stocks are expensive and how to expect a collapse in markets. 

 

So i will write it again- the economy sucks but stocks are soaring - yes S&P 5% from ath- and 200% since 2009!!

No meltdown - no crash so far - and ZH is negative for 4 years.

Eventually markets will tumble - that how cycles work- but remember this site is talking about a crash since 2011! yes almost 5 years ago!

 

 

Fri, 10/16/2015 - 16:20 | 6676708 Keltner Channel Surf
Keltner Channel Surf's picture

“My My, Hey Hey (Out of the Black)”      adapted from Neil Young

My my, hey hey
Low-volume crap is here to stay
There’s less to the picture than meets the eye
Hey hey, my my

Trading’s gone but it’s not forgotten
Can’t remember things this rotten
Now that it’s gone it may never come back
We’re all into the red, and out of the black

My my, hey hey
I think I made six bucks today
I’d rather flame out than fade away
My my, hey hey

Hey hey, my my
The dull tape squeeze will never die
Take your favorite ticker and
Shoot it toward the sky
Hey hey, my my

Fri, 10/16/2015 - 17:39 | 6677048 Squid Viscous
Squid Viscous's picture

top 10, KCS ... hilarious

Fri, 10/16/2015 - 16:22 | 6676713 yogibear
yogibear's picture

The banks have the Fed's consent  to buy stocks.

 

Fri, 10/16/2015 - 16:28 | 6676761 Baby Eating Dingo22
Baby Eating Dingo22's picture

 

Guess who owns half the world's assets

 

http://www.cbsnews.com/news/guess-who-owns-half-the-worlds-assets/

Fri, 10/16/2015 - 18:25 | 6677175 playdoh
playdoh's picture

Goldman Sachs?

Sat, 10/17/2015 - 02:18 | 6678390 ThirteenthFloor
ThirteenthFloor's picture

The real elite never make the BS media lists. The old queenie of England, Old man Rothschild, old man Bush

Those are the rich fuckers pulling the strings.

Fri, 10/16/2015 - 16:29 | 6676765 jump_mutha_fukah
jump_mutha_fukah's picture

RUT ninjas blew their wad today fending off sizeable redemptions in IWM opex...this weeks action likely smoked a lot of shorts, especially this afternoons action. Bulls may just find themselves selling to a vaccume next week should china and earnings disappoint. Still failed to close above decending trendline off highs. Think we head lower from here barring CB b.s.
Have a good weekend hedgies

Fri, 10/16/2015 - 16:41 | 6676840 Keltner Channel Surf
Keltner Channel Surf's picture

Still, ya gotta admire the "surprise" 2:00 spike back to Unch, 'cause in choosing to masturbate w/ sharp ninja tools, they risked turning themselves into a counter-tenors (I know you're a STEM type, so a counter-tenor is an opera singer with a range far above the tenor range, equal to a female alto, or ancient castratis, which works great in Bach cantatas, such as Cantata 170).  Hope you  make the MM's cry next week, JMF.

Fri, 10/16/2015 - 17:05 | 6676922 jump_mutha_fukah
jump_mutha_fukah's picture

Lol KCS made them cry this week....rectal bleeding is the goal for next week ;)
Hope you fared well today...that spike was insane...luckily going into it i bought an equal amount of this weeks 68 calls for cheap to protect the short 66 and 67s I still hadn't rolled to next week at that point. Dumped them for tripple the purchase price which made up for the lower premium on the roll, so got lucky by not being greedy but my heart sank for all those long put holders of IWM.
Good luck next week...think we are at a very critical pivot here, just feels like things are about to get very interesting

Fri, 10/16/2015 - 17:21 | 6676991 Keltner Channel Surf
Keltner Channel Surf's picture

Don't feel sorry for IWM put holders on OpEx, they should know better --- like your 4th grade classmates who used to eat Screaming Green Crayolas while you feasted on the Dolly Madison Zingers your Mom packed for you (yes, we can tell you're into sugar).  Didn't trade much today, given OpEx sucks for cash daytraders like myself, but I can't help feeling we'll see a 12-point TNA swoon next week that will allow you to retire to the Outer Banks, but if not I guess we'll just need to keep thrashing about.  Enough popcorn can't be popped for what lies ahead .... we hope

Fri, 10/16/2015 - 19:54 | 6677447 jump_mutha_fukah
jump_mutha_fukah's picture

Now you got me dreaming KCS...I spend a good bit of time in OBX (Cape Lookout, Hatteras and Ocracoke), spent a lot of time this year on the ICW with the boat...only takes 2 hours from where I am to hit Wrightsville Beach. Nothing like a long weekend on the ICW, fishing, cocktails and sunsets. 5 years now I have been looking for a place down there but R.E. is still too pricy, it is only a matter of time now before the boomers have to firesale their 2nd a 3rd homes to raise liquidity so I'm still holding out. Almost made an offer on several places down there this spring around Sneads Ferry and the other around Holden Beach, but patience got the best of me...one day my friend, one day. Until then, like you said...keep thrashing about.

Fri, 10/16/2015 - 20:30 | 6677553 Username_Taken
Username_Taken's picture

You and kcs give me something to shoot for with trading. Your banter/analysis is always appreciated. 

 

Enjoy the weekend.

Fri, 10/16/2015 - 21:34 | 6677775 jump_mutha_fukah
jump_mutha_fukah's picture

Glad you enjoy...i think we can both say thats what we are here for...i know for myself i always appreciated anyone who could help out witbout charging a fee and us bears have to stick together

Fri, 10/16/2015 - 16:33 | 6676788 Wilcox1
Wilcox1's picture

HehHeh, the banner at mw right now is saying EM's ready to go bull because of delayed rate hike. Not 'cause they might have something the world needs and will pay for, but because our fed is staying with ZIRP!

Fri, 10/16/2015 - 16:41 | 6676814 PrimalScream
PrimalScream's picture

agree with comment above ... this is not a stock-picking site, and also not a precious metals picking site.  People might offer opinions ... 

BUT NEVER TRADE BASED ON HOPE, FRUSTRATION or HUNCHES!!

Fri, 10/16/2015 - 16:37 | 6676819 taopraxis
taopraxis's picture

No one who watched Lehman and Fannie go down in 2008 will buy the idea of everlasting central bank omnipotence. Omnipotence and impotence are two side of the same coin.

Fri, 10/16/2015 - 16:54 | 6676891 Atomizer
Atomizer's picture

You forgot to mention AIG. No problem. We all try to piece together the numbness of stealing taxpayer money thru banking cartel. I even say...forgot about the issue. 

Stay true and your efforts will flush this shit down the toilet. 

Fri, 10/16/2015 - 16:39 | 6676828 khakuda
khakuda's picture

Earnings have been very strong, but a significant part of the stock market rally since 2009 has been due to ZIRP caused multiple expansion.  It is starting to feel like the market is discounting ZIRP over and over and over, continuing to expand PEs.  The market is now north of a 20 PE if one expenses stock options.  But by the time Yellen is done with this, we could go into late 90s lala land.

Fri, 10/16/2015 - 16:46 | 6676865 jamochavez
jamochavez's picture

"earnings have been very strong"---what in the fuck are you talking about

Fri, 10/16/2015 - 18:23 | 6677164 Savyindallas
Savyindallas's picture

Like Lehman  -they had strong earnings right before their collpase. It's all fraud  -but what can you do? Wall street are all crooks -the media is crooked, congress and the President are crooks -everyone is bought and paid for by the criminal billionaire class that Sanders rails about. And most people are a bunch of crooked, immoral, lazy sheeple. Go Putin? Go Assad and iran! Maybe eventually their coalition will broaden so that they liberate us in AmeriKa from the clutches of the gangsters/Banksters who are looting and raping us. 

Fri, 10/16/2015 - 20:47 | 6677605 khakuda
khakuda's picture

Dude, Lehman was a financial company.  Earnings created by huge leverage and improperly valued assets are not exactly quality earnings.  On the other hand, Apple has had massive earnings growth over the past 7 years.  Just look in the hand of many of the people around you.  May not be sustainable, but their coffers have exploded with cash in the past several years.

Fri, 10/16/2015 - 20:40 | 6677578 khakuda
khakuda's picture

Sorry, not clear, I was talking about earnings off the bottom since 2009 which have at least doubled from the recession lows (actually more than doubled), but the market PE has expanded even more.  I wasn't talking about more recently.  Earnings suck for the past year and look to be getting weaker which in our upside down world means more easy money and asset price inflation until it all blows.

Fri, 10/16/2015 - 16:51 | 6676878 buzzsaw99
buzzsaw99's picture

i amused myself by watching wmt & aapl today.

Fri, 10/16/2015 - 16:52 | 6676883 yogibear
yogibear's picture

Yellen and her 12 member minions won't do anything until there is a currency crisi.

It's keep the QE booze and partying going until the dollar keeps falling.

At some point they will panic with a free-falling dollar. But that won't be for a long time.

The Federal Reserev wants major inflation. The government will just state 2% inflation all the time.

Fri, 10/16/2015 - 17:07 | 6676927 Crocodile
Crocodile's picture

We are and have been in a currency WAR for quite some time; where have you been?

Fri, 10/16/2015 - 17:07 | 6676926 agent default
agent default's picture

Risk soars on hope economy collapses.

Pass the pop corn, this will be more spectacular than the Mississippi company debacle  of 1718.

Fri, 10/16/2015 - 21:14 | 6677694 silverer
silverer's picture

"You see Danglars, when I said buy Anglo Spanish, I really meant sell."

   The Count of Monte Cristo

 

Fri, 10/16/2015 - 17:10 | 6676940 Atomizer
Atomizer's picture

Hillary 2016 campaign clothing appeal to raise illegal immigrants flooding the DNC voting base. 

Roma está ardiendo, Vote por mí para completar el proceso. Soy una mujer con avengement.

Fri, 10/16/2015 - 17:18 | 6676979 venturen
venturen's picture

Stories about the Kardashian are starting to sound better than this fraud which is named a market

Fri, 10/16/2015 - 17:45 | 6677052 Squid Viscous
Squid Viscous's picture

they like the dark meat, just like Obozo and Lloyd Bank-fiend

Fri, 10/16/2015 - 21:11 | 6677685 silverer
silverer's picture

Two different kinds of rotting meat in the same can.

Fri, 10/16/2015 - 18:05 | 6677123 inosent
inosent's picture

Monday, October 19 coming up. We have a classic rally into the middle of October. Who knows, Monday could be a shocker.

Fri, 10/16/2015 - 18:43 | 6677246 kelley805
kelley805's picture

Can somebody tell me why all the USD bearish funds have closed?

 

Sat, 10/17/2015 - 03:54 | 6678469 Trips Trading
Trips Trading's picture

According to my research, the S&P500 evolves in 7 (calendar) day cycles, of which the 7, 21, 35, 42, 63 and 91 day cycles are the most relevant for the short term (days). For the medium and longer longer term, the 105, 119, 294, 1077, 1141 and the 3141 cycle are decisive. Whenever these cycles are ling up, it’s TIME to pay attention.

http://tripstrading.com/2015/10/17/sp500-11-tools-to-define-your-strateg...

The first upcoming date of the TripsTrading Cycle Model (TTCM) that might correct some (or all, see Fibonacci and Elliot Wave) of this short squeeze up is October 19: a day where the following cycles are lined up: 21, 63, 84, 91, 105, 119, 294 and the 3141 day cycle.

I have to be fair, not every TTCM date is an instant jackpot. OCT 1 was followed by a 30 points drop, OCT 5 marked a 15 points drop and OCT 8 a 22 points drop. Difficult to trade for the medium term, so maybe the value of my model lies in something else: defining the trend, mark Elliot Wave Highs and Lows and use it for short term trades.

The last TTCM dates (OCT 1, 5, 8) all signaled short term Highs, so a short term UP trend. Maybe that’s the real value of the model. that it will adjust to pointing out Highs in an UP trend and Lows in a DOWN trend. This idea just entered my mind, so I have to do some more research to defend this hypothesis. .

Over the last week, there was a Bradley Model Time Window scheduled for OCT 9-10 and one for today, OCT 17. Next Bradley Date NOV 1.

Armstrong mentioned on his blog some time ago that next week, OCT 19-23, there’s a Panic Cycle. The last Panic Cycle was AUG 24. Believe him or not, the last time it was correct, so it might as well be correct this week.

Hard to believe it will Panic to the upside take into account we already surged 8.7% form the Lows of SEP 29.

Conclusion: Based on Cyclical Analysis and Time, a short term High OCT 19 would make sense.

 

Do NOT follow this link or you will be banned from the site!