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Is This What Happens On Monday?
Four months ago, China decided to devalue the Yuan sending a shudder up and down collateral chains globally and forcing carry trade unwinds and derisking everywhere. Friday August 21st saw notable weakness as that weakness washed ashore in US equities.. and then Black Monday struck. The ensuing debacle stalled The Fed and shocked markets.
The last week, we have seen China devalue the Yuan very significantly, EM capital markets turmoiling, and today, that was ashore in US equities... what happens next?
Deja vu?
Deja vu?
As a reminder, JPMorgan's "seer" Marko Kolanovic warned this week that...
"As for near-term risks—we believe the most imminent market catalyst will be the December Fed meeting in which we are likely to see the first rate hike of the cycle."
But to a market which has traded mostly on technicals and program buying (and selling) in recent months, there is something far more troubling than just what the Fed will announce:
This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market.
What does this mean? Considering that the bulk of the puts have been layered by the program traders themselves, including CTA trend-followers, and since the vol surface of the market will be well-known to everyone in advance, there is a very high probability the implied "stop loss" level will be triggered, and the market could trade to a level equivalent to the strike price, somewhere in the 1,800 area, or nearly 200 points below current levels.
Which would be a tragedy for the Fed: after all, nothing is more important to Yellen, Draghi et al, than affirmative market signaling - pointing to the (surging) market's reaction and saying "look, we did the right thing", just as Draghi did on Friday when he explicitly talked the market higher in the aftermath of the ECB's disastrous announcement.
The irony will be if, regardless of what the Fed does, the subsequent move is driven not by the market's read through of monetary policy but by the "pin" in this massive $1.1 trillion option expiry, the biggest in many years, one which if recent market action is an indicator, suggests the stop loss strike level will be taken out in the process setting the "psychological" stage for market participants who will look at the drop in the market, and equate it with a vote of no confidence in what the Fed is doing, potentially forcing the Fed to backtrack in less than 2 days!
Whether this happens remains to be seen, and we are confident the Fed's "arm's length" market-moving JV partner, Citadel, is currently scrambling to prevent any imminent selloff. However, considering Kolanovic' track record of hinting at key risk inflection risk, it is quite likely that whatever the ultimate closing price on December 16 and, more importantly, December 18, volatility may very soon have an "August 24" type event.
Charts: Bloomberg
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Are we placing bets?
My bet is simple...
- Fed raises rates
- Market freaks out to the downside.
Fed Raises rates, but nobody cares because a mushroom cloud appears over raqqah and the second american civil war begins, closing banks as part of The governments plan to remain in some sort of control
Fed doesn't raise rates.
They're not ready to start the shitshow.
If they hike rates, and I see no reason why they should, then they are intentionally wanting to pull the pin on the system.
<- my name
<- not my name
"Fed doesn't raise rates.
They're not ready to start the shitshow."
Bullshit ~ they raise (because GS places bets on the other side)... Then ~ they quickly withdrawl after the bloodbath ensues... GS jews win again!
"The only #WINNING move is not to play"
~ WOPR
Exactly, the fed doesnt give a flying fuck... it's all about bubbles and bursting bubbles. A very effective way of transfering wealth. That's all it is... Since when does the fed care about the common person. Had they cared, they wouldnt have devalued the dollare 98%.
Fed has a bed-in on live TV and declares money doesn't matter anymore... (j.k. 25bp)
How will the Fed's actions affect the price of bullets at Walmart?
If you are posting here you shortly wont be able to buy bullets at Wally or anywhere else.
So fine then. I'll go back to the old fashioned way & open up a shop.
<<< Insert Beavis and Butthead giggling about Bear Porn sounder here.
On Monday I will milk the cows at 4:30 am, feed the goats, feed the chickens, hoof cows, slaughter the turkeys and pigs, and spend the rest of the day in the cabinet shop.
That ought to get you an invitation to sit next to Kim Kardashian & Kanye on the runway at 'Fashion Week' in NYC
So, if they raise rates,
and the Bond market exodus begins,
what happens to the 30+ Trillion in US shadow banking?
There's $1.5 quadrillion in derivatives.....
Rate rise or not, I guess the only consensus fight club will have is that the Fed is painted into a corner.
Let project mayhem commence in earnest.
Oh and buy some silver.
:)
Yesi would like extra butter on my popcorn.
what finer way to force the NWO's preferred 'extraordinary measures' than to collapse the system over the christmas trading period ?
They won't do it, have they done it up till know yet? It's all bs talk...
PPT has been told to do nothing to stop the decline leading up to the Ponzi Munchkin announcing 'global concerns' once again had lead to a decision not to hike.
This is a fantastic idea and it shows what a good nursery it is to allow this. I know that my daughters would have loved to have been able to do this in the moments when they were missing their children. I hope that moe nurseries follow suit. Well done for coming up with this!
The only hope they see is to raise rates and have the market rise because of it. They hope it will change the market psychology and the bond rout and massive selloff won't happen. I expect MASSIVE interventions when they announce the hike. They have already set the stage with yet another wave of short selling. Do you think Amazon is down nearly 4% (including after hours) because people suddenly realized that it's overpriced. Today was all short selling and the Fed thinks they can cause a squeeze and force new highs. Then all will be nirvana. It won't work but that is the only shot they have for keeping the house of cards standing. Put a strangle on the market come Wednesday, it could move big time either direction.
@Amish
Didn't you get the message, Producers are evil, now get out there and consume something!
And there should be no doubt as to whom "our representatives" represent!
"And there should be no doubt as to whom "our representatives" represent!"
Judge Calls For US Marshals and FBI To Arrest Congress and The President
The only #WINNING move is to buy Ammo, Food, Whiskey, Gold, and silver, in that order ....
BBB, FTW
Bullets, Beans and Band-Aids
Hmm.. all this time I thought BBB was Booze, Bitchez and Blow
I can't seem to save any whiskey, but I'll keep stacking.
:)
You stack the Bic lighters and I'll stack whiskey minitures,
we'll meet after the SHTF, when I need a light.....
Fed (Yellen) says: “We will make our decision within the next few days.” (Knowing this event is in place)
+100
My guess is this:
1). Fed raises rates
2). Market mysteriously rises in a straight line to finish up 3% at the close.
Fed raises rates 50 basis points. Markets freak out. EM markets have coronaries. Demand redrawing of asset/loan pledges so they can at least feed their people. Dirivitives and VOL index goes insane. Auto sales plummet along with housing sales and large purchase items as people can't get credit.
Just for fun, it is intesting to note that the #15 in the major arcana (tarot) represents the DEVIL ;(clandestinve, hidden forces at work, perculating evil. The #16 represents the TOWER; (destruction, meyhem, sudden change, chaos, disruption.) It might be something to note or not, but it is interesting.
Is Gartman Long or Short now?
Gold Bitchez.....I pick up pennies
Bomb scare will cancel meeting.
Rich will say, "See, they are targeting us, too."
Turns out to be hoax.
Re-scheduled in January.
Everybody can go shopping.
Christmas saved, problem solved, terror averted.
Everybody's a hero.
Callin' it.
. . . _ _ _ . . .
02:49, Dec 12, 2015
Can't start the shitshow until the world goes shopping one last time to honour The Birthday Of Retail Bribery and Guilt-giving.
Nice one, dude! *upvote*
Unless it Doesnt. GET LONG AND BTFD! Party like its 1999.
Im getting long FANG and all those puts will remain worthless on another option expiration upside bloodbath
Oh, I long for the day of 18M shares traded, and a market which moved only 20 pts. either way (before Reagan). One could sell calls and puts with abandon/with both hands/until your t*ts fell off/'you're wearing 'em', etc.
Now, when an emir/dictator/princeling/ayatollah/hedge fund undergraduate, etc. sneezes it's a global event capable of producing knee-jerk reaction from thin-skinned pin heads/algos having nothing to do with the minimum force of nature from which it sprang from.
I want the patent which thickens human skin, and subsequently gives some character to the human soul. Where do I go today to find it?
And, can I go somewhere and meet others with a small degree of common sense?
Oh that was epic!
I snipped and put on facebook and twitter!
I feel sorry for you.
Social media wanker.
I say no fuckin' way FED raises rates. Therefor, FED raises rates.
No rate raise by cocksucking slimebucket douchewhore FED.
M of U....Quit holding back your true feelings about the Fed.
Let the dollar crumble then?
"Crumble"? Like the jew run FED did with QE1 2 & 3?
What would Money do?
Now for the answer.
Whos Money?
Who's Money is on First base , What's money on second base and I don't Know's on Third
Follow the centuries old money trail and matters not whom would occupy any bases. They will all be out. Only "lineage and useful minions" money get home runs in these situations.
Gold's the ref!
UMPIRE! It's baseball!
Who's Money is on First base , What's money on second base and I don't Know's on Third
But who's wife will collect
Why does your icon look ike a man fucking a dog?
She was!
Why is divorce so Fucking expensive?
Because its WORTH iT
Bwaaahahahaha!
a) Fed Raises, Obama makes a big encouraging speech; Plunge Protection teams blow their wad buying up key equities.
Within Days we get massive false flag attack to be used as excuse when they finally let the market drop,
b) Fed Raises, Soros says "fuk it, bring down the hammer NOW!!"; We get massive false flag right away, market craters and Johnny marches off to war.
Being too old to get drafted, I must stay home to help console the widows...
Hope them woman get drafted is all I gots to say!
They can serve in combat roles now, so no reason to let them miss out on this draft. Fair is fair you know.
"Are we placing bets?"
Always, unless you Goldman and know what the algos are programmed for.
Fed raises rates.
Market rises
Counterintuitively I think you may be right. That aside the dollar will start it's Roman candle effect and that will have untold unintended consequences around the world.
Being in international trade it's well to remember the Fed didn't just shit the bed here - they sprayed shit all over the world in the form on dollar carry trading funding that 'sounded like a good idea at the time', but is now drilling new assholes in DM economies that are seeing their positions erode by the hour.
But another round of punt, pass, kick ain't happening. Mr. Yellin will raise rates. Might have to back track in short order, but anything less than .25% and the Fed loses whatever threadbare 'credibility' they have left and that ain't much.
It's not counterintutive. It's trader logic. Buy the rumor, sell the news. Meaning, by the time it actually happens anyone scared for their position is LONG GONE.
A small rate hike is like a drop in the ocean. After some volatility into options expiry, it will all settle down into a big nothing.
I miss the old ZH that acually was about trading, by traders, for traders.
Btfd and pray ;)
Better yet GTFO and pray.
The Bernank: Everyone jump in, the water is fine. I got your back.
Old Yeller: Fuck you grandma, now that you're in I'm going to steal what little you have left. Here have a cookie.
Now give me that cookie!
A cookie, really? I thought you would offer cat food.
Things are looking up.
Cat food and a plastic bottle of Bowman's Vodka...
Fed raises rates 0.1%, less than expected, stocks soar.
"... stocks soar ..." and bonds collapse.
@ orez65
"... stocks soar ..." and bonds collapse.
Ding ding ding! exactly what will happen fake funny money has to go somewhere!
My bet:
FED doesnt raise because of "international developments" or " <fill in>". Stocks tank for size
You mean that False flag on the 15th?
What?!?!?!?! There's another on scheduled for Tuesday?!?!?!?!
just sayin'
Hanukkah 2015 began in the evening of
Sunday, December 6 and ends in the evening of Monday, December 14so all the menorahs will be taken down tuesday am? or left up straight through christmas AGAIN
for all I know, they'll use the still lit candles to burn a few synagogues to the ground & have a film crew handy to blame it on Muzzies & 'flyover' state white gun totin' males.
did "you" not say "xmas will be a charade"?
I celebrate Kwanzaa... 'Festivus' is my Black Friday
The only thing I look forward to about Christmas is some extra days off.
Other than that, it's just another day.
I do like the Winter Solstice, though, as it means the hours of daylight are increasing once again. I'm OK with snow and ice, I just hate the lack of daylight in winter.
Francis- is that you?
~~~ Shh ~~~
Fed doesn't raise, but it doesn't make a difference as oil languishes and credit contnues descent. Markets likely head south for real this time. QE and NIRP by spring.
I don't know but I know I have nothing live that could be eviscerated in the pre-market in fact nothing short term live at all via FRN.
Best guess is an attempt at the ole "Ramp It and Camp It" bullshit where they use some garbage fluff yappin and jawboning to open it above a key level say 2019 in this instance or even 2042 . . . . . . . . . . only to see it fizzle and close again below 2019 but a stick save to keep it above today's close thus keeping as many people as possible flummoxed in no man's land.
There will be no FED meeting.
Hillary drops out of race over the weekend; markets close for the rest of the year out of respect; Bill flies at half staff; Obama stays firm.
The market will fall till wednesday 12:00 then starts to go up, FED raises the rates and the market still goes up, on the next week armaggedon ensues.
Merry Chaka Khan!
I don't know what they are going to do but fourteen days before Christmas and all of this gloom is going down? Either they need an excuse or the train is coming off of the tracks.
16th was the bottom last year...
This close to Christmas, if Yeller raises rates, they have push the markets up at the same time. All they care about anymore is perception.
The Fed cannot raise rates, because if they do anything on earth that ever touched the US$ will explode. Which means, everything.
They might raise rates in December anyway just for show, but they still cannot raise rates.
So, everything must explode. Because it must explode The Fed must immediately lower rates again and while they are at it probably go NIRP.
NIRP was the destination all along. Raising rates is just to get the explosion that will force them -- through tears and much lamentation -- to adopt NIRP.
Unknown dude in Turkmenistan, Russian, 4 years ago: "LC, the dollar will be toast. The Yuan will rise. Let's go for a ride to the mining projects, then you tell me. Nobody comes here unless they are a spook. You are the first guy who I am ordered to follow who is not a spook. Why are you here?"
"That's a great question."
***
2015
"LC, you are back."
"Boris, hey! What's up?"
"Did you get the autographed photo of Vlad I sent you?"
"Yeah, but Bath House wrote over it."
"I'll send you one by pouch."
"Cool. Let Vlad know we have a lot of flexibility. We are not Atlanticists."
"They might raise rates in December anyway just for show, but they still cannot raise rates."
Pretty much what I said above cougar (in a different way that will offend more people than you ever will)
You're right USD means everything.
It might crumble if they don't raise rates!
All the above is just idle conversation.
J B T F D
You know you're a zh junkie when...
The charts are better than trannie porn!
J B T F PM
Very logical.
+ $55,000
My prediction...pink floyd dark side of the moon will always be the best selling album....forever..
And I will wake tomorrow morning with a hard on... why do I wake with a hard on every morning? My lady likes it at night, but I am usually too tired, and when I wake her in the morning she gets mad at me...Life really sucks...if only the stock market had a vagina cause it opens at 6:30 am and I am ready :-)
Put a graph of the market over her head and carry on!
I put a bag on the old lady's head with a picture of a gold nugget. Works every time!
Exile on Mainstreet.
Sexist pig joke. But funny. Shallow as hell.
"I put a bag on the old lady's head..."
What's so funny about that?
Testosterone levels rise during the night and fall during the day. They are at their highest in the morning. ergo, morning wood.
Ahh, yes....I remember morning wood.
didn't John Lennon sing "Morning Wood" on the Rubber Soul album?
Mourning wood
Morningwood
Oh, to be 18 again, windowpane and the Dark Side of OZ .....
Comrades, what is this "morning wood," and how do I acquire it?
--Boris
Popsicle sticks and electrical tape.
Kid: Grandpa, what's all the noise?
Grandpa: First hard-on in 10 years and my damn hand is numb!
Men. They think they are important. That's the real joke here.
Show me another sentient being on this planet with such an obsession with their own genitals? I know dogs lick. Whales probably would too if they could reach. But a whole culture based on "how big and stiff it is?"...culture?
US is so very puritanical that the adults never get out of bathroom giggle humour. Stuck in kindy-garten puberty forever.
OK some of the jokes are funny. Benny Hill funny. But US is so uptight about anatomy and sexual behavior.
oh fuck off..
Ok but not with you. I have standards
It's one of those reflexive statements people make that creates the lingering doubt in ones mind that they may in fact be deluding themselves. It's the sort of thing one imagines a fat girl saying as she tearfully chomps her way through her 3rd tub of Ben & Jerry's..
To answer your previous question, there is no humor or parody that can come close to the simple, stark statement of a badly scrawled cock'n'balls in an inappropriate location, which, to be fair, means pretty much anywhere - it is one of the simple and relatively innocent pleasures that I hope will not be denied to future generations who are to be ruled by hysterical scarlett-faced heffers...
actually WhackedOne, two tits, a hole, and a heartbeat is standard here. the heartbeat is optional...have a nice weekend.
Whacko, it can't be both.
You know if you shake it more than three times, you're playing with it.
I enjoyed that.
Grandpa, out in the garden with his 8 year old grandson.
Kid sees a worm wriggle out of a hole.
Old guy says he'll give the kid $1 if he can put it back down the hole.
Kid, being a clever little bugger, runs into the house and grabs a can of hairspray.
Sprays the worm and jams it back down the hole, so granpa gives him the dollar.
Next day , grandpa comes over to the kid and gives him another dollar.
Kid asks why the extra dollar.
Grandpa smiles ans says 'that's from your granny!'
An oldy, but a goody, IMHO.
4-Way Windowpane and I checked out for days. Fuck, if I had been paying attention to all of that shit rattling around in my head I could have invented the damn I-phone and I-crap line of NSA tracking devices. Oh well, I would have made Steve Jobs look like a Saint and would have ground my teeth down to little pieces of gravel....
The FED can't raise rates although they have promised it all the time.
So they need a really fucking good reason why they "simply can't do it this time - again - so sorry".
How does a massive WTI crash and a parallel 2'000 point decline of the Dow Jones sound as a reason? Sufficiently good to do nothing, if you ask me.
So this oil "crash" could well be intentionally manufactured by the FED. Doesn't it seem weird that the US controlled IEA releases a super bearish press release into an already weak "market" today? Isn't it weird that the Saudis wouldn't decrease production if only for some days to create some bullish sentiment for a rise?
Oil has dropped 8 dollars and gas is still the same price in So. Cal. Fucking evil manipulators!!!
Yeah oil per barrel dropped 20 bucks in the last few months hasnt budged the price at the pump but one point from $1.68 to $1.67 per gallon here in Texas next to refinery's...
As of yesterday, I am all-out. Goodbye, casino.
Well, I'm all-in since october.
Into my avatar,... of course.
Better to be in the avatar than BitCoin; talk about your speculations. wink
Bitcoin? Read an opinion on present concept of money via a Jesse link. : https://kingdomecon.wordpress.com/2015/11/24/silver-summit-none-comprehend-todays-metaphysical-currencies/ Has internal links.
13 dislikes. Must've hit a nerve!
Whatever happens they need to unlock the windows on Wall street.
Defenestration for the win. If I had an upvote printing press I'd fire it up for you, amigo.
Pull up the 10 year chart of the DOW and follow the near decade long up trend with a ruler. At 16,950 or so that trend is broken. I don't follow TA a lot, but that seems significant.
I would guess this little downturn is the bankers trying to intimadate the fed into not raising rates. Kinda like holding the baby out the window 10 stories up.
Nope. Monday morning, the Fed will have all hands on deck of their Plunge Protection Team and watch how the markets go ballistic as soon as it opens! They will NEVER let this trend continue.
OPEX front run rally starts Monday
Tuesday; got to set this huge OPEX to be the biggest squeeze in history; let the spx drop below 2000 and into the 1960 range, then listen for the big sucking sound...like a trumpet blast followed by Yellen & Co laughter.
With all the charts and info ZH posts? This is a wash. Another will they/won;t they....oh christ moment. Run the markets one way or the other. Manipulate up and cash out down. Had lots of dry runs in the PM markets, I am sure the algos are all tested.
I said it 5 years ago. "THEY" are not going to be satisfied until they steal the Baby Boom trillions in retirement funds. Now we get the speed up. Cashin called it a roller coaster in 2015? Not enough. Some people still have some money.
Gosh I am impressed.
< Yellenator raises rates, $SPX goes higha'...
< Yellenator keeps ZIRP, $SPX goes higha'...
(alternative b-swans:)
< WWIII lights up in ME, $SPX goes higha'...
< Obola arrested for treason by US Marine Corps Commandant, $SPX goes higha'...
< 8.0+ earthquake in Los Angeles, $SPX goes higha'...
I think you got something there ....
Please do not think I am an Obama apologist but his 'inaction' could be because the neocon faction wants to do something insane--r. Maybe O is actually not treasonish...on this issue. That he is a traitor to his constitutional oath is certain...but then most of congress is also quilty. So string em all up going back to FDR and anyone with anything named after them gets 'special treatment'.
We need more lampposts and a hell of a lot more rope.
Do you think that O will issue an E.O. making it illegal to sell/buy rope?
It doesn't matter what colour a politicaian paints himself.
A turd, painted red or blue, is still a turd.
Like The August head fake.....The manipulators....AKA... market makers...want to buy their child the GI Joe with the kung fu grip for Christmas.......
I would be prepared to be surprised and wrong about all signals before what ever happens...They will manipulate to make money....
+1 for the 1970's GI Joe reference.
trading places premiered in 1983
https://www.youtube.com/watch?v=uI4fVgVVpiw