US Stocks Erase All Post-QE3 Gains, Tumble To Fed Balance Sheet 'Reality' Once More

Tyler Durden's picture

For the first time since early March, The Dow dropped back near 17,000 earlier (down over 1000 points from the pre-Brexit peak) with a modest bounce off the EU close lows. However, this plunge across risk assets has erased all post-QE3 gains with Trannies down 20% since Oct 2014. Having been almost 200 points 'rich' to the Fed balance sheet, it appears reality is setting in once again and risk is mean-reverting.



Which, once again, reverts S&P to its Fed Balance Sheet implied level...

FV is around 1960 - but as we saw in Aug 2015 and Jan 2016, the market must overshoot before The Fed will jawbone it back to hope.

Charts: Bloomberg

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Haus-Targaryen's picture

What happens when the investing world en masse, no longer believe the Fed can actually do jack shit about the problems we find ourselves in?  What happens then? 

i_call_you_my_base's picture

Don't worry, there is still NIRP, corporate bond buying, etf buying, and two or three trillion dollar coins to go.

bamawatson's picture

reminds me of old movie

"wild in the streets" 14 or fight

In this first ever "Rock the Vote," Christopher Jones sings about lowering the voting age to 14. His master plan? Becoming president then herding everyone over 21 into concentration camps to be fed LSD for the rest of their lives. Good idea. Yeah, that's Richard Pryor on drums.

mkkby's picture

Haus, nobody BELIEVES the fed can do jack shit about problems.  Everybody (hopefully by now) understands fed stimulus ends up in stocks.

Just commit the 2nd chart to memory.  Fed balance sheet = stock market.

FreeShitter's picture

once all of that is done, we still have WWIII.

TBT or not TBT's picture

What happens when people find out that all the central banks are doing here is providing cheap credit to their broke, entitlement providing governments? You know those civil servants that own armies, prisons, courts, police powers, and establish the framework under which CB's owe their existence? My bet is the printing would continue unabated, because that's what we see now. Pay no attention to the impending bankruptcy of the currencies and entitlements and pensions writ large.

KnuckleDragger-X's picture

As Peter Pan explained, you have to truly believe in order to fly, but there are now doubts, and it's a long way down......

nibiru's picture

It sounded epic so I will just post the 5-minute speech from Judge Napolitano to top it off

Cursive's picture

Not an original thought (since ZH frequently cites a 3% "market" drop from ATH produces regular histrionics), but you really have to wonder what the media will be doing or saying when the market is down 7% in one day and we eventually approach SPX 666 again.  I mean, if it's this bad NOW, what on earth will it look like THEN?

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Jun 27, 2016 12:14 PM

As long as a day has a 3:30PM, there is always hope

Cabal Watch's picture

Didn't you get the memo on Friday ... US markets sell into the close now.

hobopants's picture

All shall be well before weeks end, seen this shit too many times. Don't fight the printing press.

NoWayJose's picture

Making it literally true - the correction ain't over until the short dumpy lady with the bad haircut sings!

Nobody For President's picture

Is she the one that strokes out giving speeches, or the one wearing the pantsuit?

economicmorphine's picture

Who knew?


Angie, Angie
When will those dark clouds all disappear
Angie, Angie
Where will it lead us from here
With no lovin' in our souls
And no money in our coats
You can't say we're satisfied
Angie, Angie

You can't say we never tried
Angie, you're beautiful
But ain't it time we say goodbye
Angie, I still love you
Remember all those nights we cried
All the dreams were held so close
Seemed to all go up in smoke
Let me whisper in your ear
Angie, Angie

Where will it lead us from here
Oh, Angie, don't you wish
Oh your kisses still taste sweet
I hate that sadness in your eyes
But Angie
Ain't it time we said goodbye

With no lovin' in our souls
And no money in our coats
You can't say we're satisfied
Angie, I still love you baby
Everywhere I look I see your eyes
There ain't a woman that comes close to you
Come on baby dry your eyes
Angie, Angie ain't good to be alive
Angie, Angie, we can't say we never tried



herkomilchen's picture

What?  FV 1960?  Not even close.  FV somewhere in triple digits.

Global Hunter's picture

almost like we need to go back to 2009 lows then have the shakeout from there we never had....then down to shakeout we never allowed to work through in 2000...

yrad's picture

We dont need no water...

Son of Loki's picture

How can the little peeples do this to the Billionaires?

g'kar's picture

it's the trillionaires doing it to the billionaires

Bam_Man's picture

VIX being smashed lower by almost 10% (!?!) today.

I wonder who is responsible for that little anomaly? Hmmm.....

If there were any doubts left at all that these "markets" are completely rigged, they are now gone.

Grandad Grumps's picture

It should be clear that the banks have been and are planning the excuse to manipulate markets further ... to their advantage. My assumption is that those who think that they are insider elites, but are not privy to the plans are simply useful idiots, in the minds of the banking powers. Take that! you smug, elitists parasites.

simulacrum's picture

VIX is getting butt raped today

mayhem_korner's picture

The FED.

It's not just for Brexit anymore.

Smerf's picture

Clit-on means QE4 and stocks going up. Trump means no QE and stocks go down. Brexit is a taste, therefore vote Clit-on.

daveO's picture

They must pump ahead of election to get her in. Unlike '08, she's a symbol of the status quo.

Keltner Channel Surf's picture

Well ... I hope I'm wrong for those of you still short, but I just closed out of a second short in the Russell ~2:15, things look too low amplitude re: secondary short-term technicals to make a final dump a high probability.  Doesn't mean it can't happen, just not the classic setup, very middling right now. 

Also saw a huge volume burst in a long RUT fund, looking suspiciously like a VWAP play, and the volatility meas's have steadily fallen since 11.  Shorts could still be rewarded, but the odds of a stick save look too high for me to stay in. 

Good luck, fellow traders.

ParaZite's picture

Dow 12,000 when?

Anyone have one of their old ZH hats, to commemorate the shift?