"Don't Try To Be A Hero Today" Veteran Trader Warns "Self-Preservation Is Paramount"

Tyler Durden's picture

With knife-catching "value" investors proclaiming yesterday that any dip today would be an opportunity, it appears once again that faced with the reality of Brexit blowback, no one (not even the central banks) are buying the f##king dip). As Bloomberg's Mark Cudmore exclaims "Don't be a hero," to those value-investors, warning that "most of the market is still in denial."

This vote for Brexit is a momentous event in history. The ramifications will take time to play out. Don’t try to be clever today. For market participants, self-preservation is paramount. 

There will be plenty of opportunities for traders to try to profit from this shift (if they are so inclined) in the weeks ahead. But the risk-reward ratio in the short-term will remain terrible.

Part of the reason this is such a negative event for global markets is that there is so much uncertainty how it plays out.

Most of the market is still in denial. Many people are highlighting that the referendum has no legal effect and may not be ratified still. Even if that was the case, such a public rejection of democracy would hardly be a positive.

Central-bank action in the coming days is likely -- both in currency markets and through extraordinary monetary policy.

The reason why bear markets cause such financial pain isn’t just through the wealth-destruction effect. Bears themselves can also lose money as volatility remains so high and liquidity so low that relief rallies can be powerful and force shorts to be closed at extreme levels.

The one certainty that everyone should now cling to is that there is no certainty. Do the rest of the EU become tighter or splinter further in the coming months? This is the first major step against greater integration since the project began.

What happens to banks based in the UK? What happens to sovereign debt deposited at the ECB? What happens to company plans and EU employees? What happens to funds who have sterling-denominated collateral?

An important warning: global equity markets closed higher the week of Lehman Brothers collapse -– the real move lower didn’t start for two weeks. Don’t get lulled into complacency in the weeks ahead; the consequences will take months to play out.

Keep cautious, nimble and flexible. The world economy and markets will eventually move on and adapt -– it just may take some time

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wee-weed up's picture

 

 

This "dip" = plunge!

So, no doubt the Plunge Protection Team will be on it like flies on shit!

OldPhart's picture

I've had a standing order in my speculative account for 100 shares of AG at $8.00, and 10,000 shares of FLOD at $0.05.  I think those will hit tomorrow.

Meanwhile, my physical gold and silver are sitting pretty in the big fucking safe behind me.

 

This may be the moment I've been waiting on since 2007.  This time I'm ready.

 

PlayMoney's picture

That a 33% decline in AG...not including the pop it will surely get today. One of the sronger mining stocks...great management. I own it and don't see it dropping $5 plus tomorrow. Even when they have be hittng silver it has been hanging in there around $12.

bada boom's picture

They have been on it since the ES circuit breaker pause.  At this rate, will be green by the us open.

abyssinian's picture

The S&P circuit breaker is 7, 15, 20%. when the market opens, everyone will rush the only window that's open. I am hoping they trigger them all. The Feds won't have enough cash to save it this time nor they want to.  This crash was designed and playing out like they had planned.  now blame everything on Brexit! 

Al Gophilia's picture

Nothing in politics or banking happens by accident.

 

Fundies's picture

I bought the dip !!!

The hummus was a fucking cracker !!!

WTFUD's picture

Mark Carney's looking more like an Undertaker this morn' lol. Pretty much like Mitt 'the tit' Romney, although he himself looks more like a pallbearer.

scintillator9's picture

DB appears to have suffered another flesh wound.
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https://finance.yahoo.com/q?s=DB
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Fortunately, all of those derivatives will net out, right?
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Right??

savedeposit's picture

The "market" is in denial since 2008

ft65's picture

HF trading Algo's may start stressing the hardware. Looks though the weather is going to be warm too. Hope they tested and cranked up the UPS systems, the grid may be tested.

ft65's picture

>> Many people are highlighting that the referendum has no legal effect and may not be ratified still. Even if that was the case, such a public rejection of democracy would hardly be a positive.

More interesting will be the effect on other countries. Will anything really change in the short or even medium term - highly unlikely. As for the markets, they have been based in their own fantacy world for decades going right back to 1913 and the crash of the 1920's. Mother nature is only fooled for a short time. Coal, gas, oil and natural gas were a good slight of hand. The peak is passed, the re-distribution phase is well in progress.

Remember the Irish Lisbon card can always be played if there is still a little left in the tank.

GreatUncle's picture

Legal effect if you break democracy is a bullet as it always is. Got to admit not just Cameron should resign the whole of parliament because they are 95% not representative of the population.

GreatUncle's picture

Took some flak over BREXIT...

Hedge yourselves because the money people are going to readjust to what was not expected.

2 things to say... Fuck off EU you are not democratic at the highest level.

Great uncle 48 hours ago and my newly born niece can live fucking free in a democratic society.

Now come on Trump you got a class act to follow.

gr26's picture

it will take 2 years to leave finally so a week or two is nothing. These markets and especially oil can even rise at the end of the day

Who is John Galt's picture

How can this be compared to Lehman? I think it is far too early in the game to make that comparison.

Who is John Galt's picture

I am repeating myself.

stilletto's picture

Chicken shit article. I bought the dip. These markets are running like headless chickens on every scrap of gossip. No fundamentals are changing. I sold the rumour for good money (about 6%) and rode the silly panic overselling. then reversed and went long indices and currencies for a second bite of 3%. Its when you see the idiot 'professionals' panic that the rewards are there to take.

Wahooo's picture

BTFD or regret it. BREXIT is the most bullish event in 60 years. It begins the freeing of economies to compete again, the weakening grip of the legacy financial players, the beginning of transparency. I wish I had a million dollars to put into a global ETF right now.

Lockesmith's picture

Bullish to productive ones, possibly.

Consider the possibility that the UK government goes full price control. Still bullish?

Maestro Maestro's picture

 

 

 

Fuck the traders and the bankers - exterminate them and save the world

 

Fuck the EU

Fuck USA

Fuck ISIS

EU=USA=ISIS

 

 

damicol's picture

The real question is this.
Why did it take 2 weeks fer Lehman before the markets really started to dump.
The answer is actually quite simple. It took that long before anyone had really started to figure out who was holding the final bag of fucking worthless shit in the derivatives.

Once they started to figure that out, it was the uncovered mountain of toxic shit that they started to unload with everything else to cover their assholes hanging out in the breeze.

Trying desperately to dump that toxic shit on any passing half wit at any price.
So far FOUR TRILLION euros of toxic shut in EU derivatives have just has their bare asses uncovered, but as yet no one has figured out just which bankers ass or which fucking dumb pension manager or fund manager left his asshole swinging in the wind. T

The next week or two will certainly find out, because there is not a single fucking reason, not a single viable explanation can be made now that the UK has left for anyone to buy Euro shit except bonds.

Not even the the fucking risible draggy moron can justify buying EU stocks or corporate shit now, the EU just got decapitated and Germany is a leg and half of whats left, and its banks and derivatives position with a 10 to 15% slide in the DAX is looking more and more like a man who just lost his leg and the other leg is already cracking under the strain of trying to hold a 400 lb fat bloated body on its own.

Merkel the fat unfuckable bitch will get crucified if she doesn't get Germany from under this shitstorm coming its way.

south40_dreams's picture

Hate to say it, but the truth is unavoidable. Women are wholly unsuited to leadership at that level

RamzaBehoulve's picture

I bought the dip... oh wait, that was gold.

nicktd's picture

Uh looks like im being forced to not be a hero.

 

Seems Scottrade is indicating 'Error: Unable to enter the order because your account is restricted to closing transactions'

1980XLS's picture

Draghi will be BTFD.

You need to do it before he does. Ya gotta be in it, to win it.

kenny500c's picture

I bought T pre-market based on the yield vs. 10-yr bonds.

buzklown's picture

History Repeats?

On September 20, 1929 the London Stock Exchange officially crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery.[9] The London crash greatly weakened the optimism of American investment in markets overseas.[9] In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.

https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

buzklown's picture

History Repeats?

On September 20, 1929 the London Stock Exchange officially crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery.[9] The London crash greatly weakened the optimism of American investment in markets overseas.[9] In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.

https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

 

buzklown's picture

History Repeats?

On September 20, 1929 the London Stock Exchange officially crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery.[9] The London crash greatly weakened the optimism of American investment in markets overseas.[9] In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.

https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

 

ceilidh_trail's picture

History is not the only thing repeating.

brushhog's picture

I'm not buying the dip quite yet, but I do believe the negative hype is massively overblown. The pound will rebound, as will global markets. The Euro is doomed long term.