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Stocks Turmoil As "Easing" Exuberance & "Hope" Hype Trumped By Biotech Bloodbath
Only one clip possible really...
Before we start, we want to note the major convergence of technical signals that is occurring in S&P 500 cash market... (Fibonacci Time and Price extensions, downtrend resistance, and 100-day moving-average resistance)
Source: @NautilusCap via @Not_Jim_Cramer
* * *
Of course, the story of the day was the evisceration of Valeant...*ACKMAN SAYS HE HASN'T SOLD A SHARE OF VALEANT.. but the bounce died when they issued a 2nd statement via CNBC
Which weighed on Biotechs...
And dragged Nasdaq lower on the day...
As Algos bounced The Dow back to unchanged but were unable to hold it..
Quite a day for Stocks - Dow ~700 points of swing...2 words - Gamma bitches!!
Don't say we didn't warn you... (via Mr.Gartman)
We are still of the opinion that the “bear market” that began in late May ran its course, when stocks at their worst were down just a bit more than 19%. We look for stock prices still to move higher, and to finish the year higher, but likely not materially so. As such, we are buyers of any intra-and inter day weakness on balance for that is what one is to do in a bull market."
But note every ramp in S&P Futs stalled at VWAP as institutional sell orders were filled...
As VXX was "used" and "abused" to creats every turn...
The Dow clung to unchanged on the week but Small Caps, Nasdaq, and S&P all turned red...
VXX had its best day in a week...
Ferrari was a "flop"...
Treasury yields plunged all day...
As Stocks tried twice to decouple and failed...
The USDollar rose notably on the day, thanks to CAD weakness (no rate move) and JPY 120 Tractor...
Commodities all lost ground on the day (as The USD rose) but crude was worst, even with its crazy bounces..
Which slammed Crude to its lowest in a month...
Charts: Bloomberg
Bons Chart: Another Recession Indicator...
CAT down 25% YOY = Recession? pic.twitter.com/lq1MKSJn7T
— Not Jim Cramer (@Not_Jim_Cramer) October 21, 2015
Bonus Bonus Chart: S&P 500 Ends The Day Perfectly Unchanged From The End Of QE3
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There were so many robots working on Wall Street today, they had to hire Hillary Clinton as a temp.
I want to see an algo panic and watching the market in action lately it's becoming more likely. I just wonder how many times they could slam the circuit breakers in a day.....
And the Russell 2000 was down 1.58% today. The broader market took a beating.
Seems on down days it's more often a 'managed' sawtooth program, with several large retraces to VWAP and beyond, not so much on up days which plough on like a freight train. Thus, the Daily bars look solid, red and relatively wick-free, while the 15-min chart is a roller coaster.
Word is they hired Obama on an H1B
fake ass fucking Fraud Markets...
all the data again is negative including the fake ass earnings of all these domestic corporations that can only buy back their own shit paper to keep the shit smoke flowing from their chimneys....
and of course, these conditions must mean that the Gold and Silver phony paper prices MUST GO DOWN....
yeah - right....
The Federal Reserve Bank of San Francisco published a working paper this month, "Measuring the Natural Rate of Interest Redux," in which it introduced the potential for using both negative short-end rates coupled with another round of quantitative easing (QE) focused at the long end, as a response to the next recession.
http://www.frbsf.org/economic-research/files/wp2015-16.pdf
Thomas Laubach
Board of Governors of the Federal Reserve System
and
John C. Williams
Federal Reserve Bank of San Francisco
October 14, 2015
Abstract
Persistently low real interest rates have prompted the question whether low interest rates are here to stay. This essay assesses the empirical evidence regarding the natural rate of interest in the United States using the Laubach-Williams model. Since the start of the Great Recession, the estimated natural rate of interest fell sharply and shows no sign of recovering. These results are robust to alternative model specifications. If the natural rate remains low, future episodes of hitting the zero lower bound are likely to be frequent and long-lasting. In addition, uncertainty about the natural rate argues for policy approaches that are more robust to mismeasurement of natural rates.
These “governors” are cover-up shills for the approaching train wreck. Wanna know the results of central planning coupled with socialism? Fortunately, we have a real life model unfolding: It’s called Brazil.
Brazil pension crisis mounts as more retire earlier | SF Gate
New York Times (October 20, 2015 )
SAO PAULO — When Rosângela Araújo turned 44, she decided that she had worked long enough.
So Araújo, a public-school supervisor, did what millions of others in their 40s and 50s have done in this country: She retired, with a full pension.
“I had to take advantage of the benefit that was available to me,” said Araújo, now 65. Her government pension stands at about $1,000 a month, five times the minimum wage.
An exploding pension crisis in Brazil, Latin America’s biggest country, is wreaking havoc on its public finances, intensifying a political struggle over the economy that already has the president fighting for survival.
Brazilians retire at an average age of 54, and some public servants, military officials and politicians manage to collect multiple pensions totaling well over $100,000 year. Then, once they die, loopholes enable their spouses or daughters to go on collecting the pensions for the rest of their lives, too.
The phenomenon is so common in Brazil’s vast public bureaucracy that some scholars call it the “Viagra effect” — retired civil servants, many in their 60s or 70s, wed to much younger women who are entitled to the full pensions for decades after their spouses are gone. …
The pension crisis is feeding Brazil’s political turmoil as President Dilma Rousseff fights calls for her ouster. The nation’s economy has soured badly, and this month the Federal Court of Accounts ruled that Rousseff violated accounting practices by using funds from giant state banks to cover budget shortfalls. School and health budgets are being slashed, and Rousseff is now proposing steps to keep pension spending from ballooning even more.
But a rebellious Congress voted this year to significantly expand pension benefits. Rousseff vetoed the legislation, setting the stage for a bruising battle with lawmakers. … Brazil is enduring its sharpest economic downturn in decades, hemorrhaging jobs and depleting contributions to the pension system. The Federal Revenue Service said such payments plunged 9 percent in August. …
http://www.sfgate.com/world/article/Brazil-pension-crisis-mounts-as-more-retire-6580084.php
Not even the Fed's plunge protection team could buy enough stocks today to stop a selloff.
Audit the Fed !!
MOAR HOPIUM!
"biotech bloodbath" and the BIS down only 1% wtf
White House, Media Silent One Year After Murder of US Reporter Who Exposed Western Links to ISIS
from “Sunlight Bathed the Golden Glow” by Felt (aka “Sunlight Killed the Golden Goose”)
{For fans of the Cherry Red Records era}
You're trying to fool somebody, but you end up fooling yourself
You’re reading from that book of Keynes’, but you don't know what it’s about
I listened to you, now maybe you'll listen to me
You're trying much too hard to make markets trade like a dream
You’ve stepped in it, big time; now you're stepping out of line
If we made a movie of it, would you forward guide your lines?
Stop all this over-thinking, ain’t gonna do no good
Your global QE scheme isn’t doin’ what it should
You’re tapping down the upswings, some might say you’ve eaten crow
Stop making our stock picks for us, stop talkin’ when you don’t know
Stop spinning when we’re sinking, ain’t gonna do no good
You’ll see that price discovery is … ah, sometimes good
You're trying to fool somebody, but you end up fooling yourself
You’re reading Krugman’s column, but you don’t know what it’s about
I listened to you, now, maybe you'll listen to me
You’re trying much too hard to make our world a lapdog of Keynes
I’ve put up with you, now maybe you’ll listen to me
You're trying much too hard to make markets evergreen
Fare thee well kind Sir, I'm off to pastures anew but shall always remember your lyrics and contributions to this site.
Thanks, T1, I hope it's because we had so many retrace to VWAP today (your favored trade style) that you made enough to retire from this crazy business.
Think we head lower tomorrow... that sawtooth action you speak of above is usually a shakedown....how they break the BTFD'ers of their bad habbits (at least in the short term....unfortunately they have short term memories).
Rolled some of my long call hedges today to next week(because I think by friday they will be worthless....but this increases my spread...so more exposure to an upside loss) and sold against my long puts with a really tight spread (just cause I think we go lower and am willing to sacrifice the gains on the puts for a lock on the costs of them in which case means my short calls expire worthless)...kinda trying to entice the MM's into pushing lower with the put sale.
Really hoping we don't get a blow out to the downside quite yet. Sitting long on 69 and 72 calls for next week totally on the house...would love to get one more shot at a sell against them. Short this weeks 66 calls, long the 65.5 puts from last week and short the 66 and 67 puts as of todays close. 66 is threading the needle, but happy with 65-98 on friday close. Not much confidence at the moment that we bounce from here though. Market felt really tired going into today, we are due for a pause here.
With Draghi & ECB ('Europe Craves Bunds') tomorrow and the FOMC ('Fear Of Minor Crises', 'Fuck, Our Mirage Crumbled') and BOJ ('Bunch of Jerks') next week, one could make a case for in- and out-of-the-money for every strike you listed, both puts, calls and strangladdles (strangle, ladder and straddle combo).
One add'l point to my first note above (that I'm sure you noticed) was the presense of the 50DMA just above the 20 that provided a natural fierce ramp point at 10:30 to start the first sawtooth. I got short too late after the first hourly bar (cause technicals were still middling and the Dow and QQQs looked too strong, with high Stochastics), so when it bounced not once but twice from the 50, with volume low as hell AND the Dow soaring early, I got out at breakeven and stopped early, thinking it would be another pre-Draghi whipsaw back to the highs day, really pissed I missed alll the fun, first time I've seen RUT tank early on low volume, almost NEVER happens. As you might imagine, pure daytraders are forced to use entry rules & stop/loss frameworks that pan out most of the time, which sometimes keeps you out of good trades, and today (and all week) everything has been mid-bar or 50/50 decisions, just how the cards were dealt. Convinced the impending CB decisions are fucking shorter technicals, so hopefully Draghi gives us something to chew on decisively. One side's gotta blink soon ...
Love your analysis KCS...to your point of the making a point for in or out of the money on all my positions....that is kinda my goal in any given week. being on the sell side of those positions means the close gravitates to mid point of that which usually winds up being a good take for me in terms of premium...assuming I take advantage of the Friday action and don't get greedy, closing out each side as opportunity arrises. Right now I am 3x overleveraged for a downside move compared to my usual strategy...I can afford to be here and to roll several more times, but I would rather get back to my laissez-faire weekly comfort with 1x leverage
and edit above...
65-98 on friday close should be 65-69, my bad
I noticed what I thought was that typo, but then I remembered TNA in 2014 and thought "Hmm, 98 by Friday, well it's TNA, so sure, give the ninjas a few days and it could happen ..."
Peace out T1, don't be a stranger
BTFD happens five times a day in 2015. Good luck trading, McFly.
it is kinda bullish in that it is becoming a stockpickers market. some of thesmall caps have taken a severe beating already.
Treasury 3, 10 , 30 auction next month is projected to be ' disturbed ' due to the debt ceiling uncertainty. I tell you what's disturbed .... the 1941 Debt limit Act of $ 65 billion amended 80 times by .gov to now reach $18 trillion.
And we have Citigroup insider Jack Lew minding the treasury,
As Glenn Greenwald notes: When the financial crisis exploded, Lew was overseeing a Citigroup unit in 2008 that profited off the housing collapse and financial crisis by investing in a hedge fund king who correctly predicted the eventual subprime meltdown...
During the financial crisis frugal Lew received a $1 million bonus from Citi.
Just trimmed my stock shorts in the after market given I'd unwound my gold hedge earlier. Failure of gold to rally on the close is not auspicious for stocks, but I'm sort of looking to get short bonds, now. If the stock market is hammered on tomorrow's open and bonds rally, I'll short bonds. Otherwise, if stocks rally, I'll add back the stock shorts I just lifted. If stocks and bonds both fall, look out below. I'd probably do nothing, though. I never chase markets. If it really gets ugly, I'll take some more profits, but I am not looking for a crash tomorrow...one never knows, of course. Just some thoughts...
Thanks for your thoughts....no sarc
We turmoiled some folks.
What a joke this all is.