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UPDATE: Another Way Of Visualizing Today's Raging Unipolar Stock Behavior
Update: not a second after we put up this post 20 minutes ago, and as expected equity realized it was being pushed around by a bunch of momo Gallium-Arsenide semiconductors. The result: from a spread of 13, the differential between stocks and bonds promptly was cut in half. With any more patience, we are confident this spread will closely entirely as it always eventually does.
A little bit earlier, Peter Tchir was lamenting the latest market breakage courtesy of stocks once again being on their own, and ignoring all the clear macro risks, proceeding to melt up on nothing but a massive short squeeze, precisely as we warned yesterday. For those scratching their heads, below is a great way of visualizing how in the past hour stocks have completely broken away from credit in the form of IG and HY, and are now raging ever higher a solid 13 point rich to correlation fair value. One day, maybe, stocks will prove to be correct over credit... for the first time in history that is. Or, then again, they won't.
Source: Bloomberg
We have moved more than five standard deviations across VWAP from today's lows and for those looking for late day VWAP reversion - it stands at 1172.
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Yes.
Because this time really is different. And there will be NO mean reversion :)
I agree. Really.
$5 in 2015 says we'll redefine what 'mean' is.
meaning that it is time to leave someone holding the bag. my guess is it won't be the banks.
IVR was fucking hilarious today. Illiterate sub-morons is probably being too kind. Did everyone suddenly forget the ex-div date?
I've got a raging unipole.
Serf's up?
QE3's started already if you're not so sure about it.
Well end of day dump like clockwork is coming to: algo's taking it off the table for the day. All too predicable.
Cue the selloff in 3, 2, 1....
Yeah, gotta love the overnight trading taking profits off the 401k ramp and waiting for more suckers to jump in in the morning. Look, if you don't have access to the same trading options that everyone else at the casino has, then you really should not be sitting at the table in the first place.
Perfect time for a crappy jobs number. I wonder when that comes out???
You're not one of the ones that gets it a 21 hours before it's realeased?
its 4:00, and do you know where your money is?
YEAH,ITS IN PM'S, BITCH.
Its 4:00pm, how much of your hard earned money has been stolen by HFT algos today?
Equities? Who wouldn't want to own a slice of a company in a fascist s**t hole like America? Go Team!
Ponzi thug life. I would love to earn a share of stock in a company that issues 6 billion 8 billion 10 billion shares. More shares than people on the frikkin planet.
I'd love to finance a company not by buying anything in it but simply buying shares that it magically accounts into "earnings". IPO the shit out of stuff all the way through the depression.
Hell even do it for me without me even being involved just by being a government pensioner.
Hephasteus
You may have a new magazine title there
The new 2011 edition PONZI THUG LIFE..................... starring none other than Hank Paulson in our anniversary issue
Has a kinda ring to it Oh oooh Sh-t its the banker alarm another one just got bribed with fed gifts
Head Shoulder Knees and Toes, Knees and Toes. SPY IWM IYT
Don't worry about finding rasons for what you can't explain, Tyler. Just enjoy the process :)
skipped out and came back to a shock
The fact that I am not in this market is just fine with me. Let them ramp them up. I cannot invest in lies and phony numbers. Remember we get the biggest ramps in bear markets. Any questions?
yes, where do babies come from?
It's not about where they come from...it's about how they got there.
Who are you really and what do you do for a living?
Trust fund baby? maybe.
Why does it burn when I pee?
Too much stimulus of your package.
ROFLMAO
Sucker's rally, don't get burned. Don't believe the group hug with Merkel, Sarkozy and however you spell that Greek PM's name. Europe is still in deep doo doo, Greece is still going to default, Dollar is going to go down.
It is a Suckers Rally if you bought in. I own Zero Stocks.
This was a Short Covering Rally ramped by hedge funds with HFTs burning the shorts.
This country is in a depression. We never left the recession. Stocks prices are not the economy.
This is why the average person has quit the markets and will remain gone for a long time.
We are "Worse than Japan Now".
Ramp up
Greece defaults, (lehman event)
stock market crash
QE3
The lead up to QE3 (or lack thereof) short covering could be the perfect setup for a hard landing if QE3 is nonexistent or a lemon.
I'm exhausted waiting for the world to fall apart. All I want is to short this down to 950 or so...is that really too much to expect given current conditions?
Ben thinks so.
The watched pot never boils.
The owners of the market want you out first.
options week beotches
word
Options week word indeed. Last options week I bought some puts on GLD and that was the best trade i ever made. I'm betting again that gold goes a lot lower before options expire.
your graph was early, its almost gone now...insanity! a whole industry blowing itself up...HFT's have to be shut off
Sucker fish rally...entirely. Check the roll up quotes after hours...and you will see that institutional size blocks were dumped through alternative exchanges...so that you could not see it.
As an aside...it is always so revealing when nobody pays attention to Dr. Copper...when he has a pneumonia-like cough.
30 yr bond yields down 4 ticks..this was an HFT gang bang.
Everyone sure moved quickly past Larry Fink's ridiculous comments this morning. In fact, the BlowHorn [CNBC] edited the important part out when they replayed the interview in the a.m.
Why do you all think Larry Fink wants people FORCED into buying bank assets? Well, perhaps his dark pool is brimming with them, as folks continue to sell. Remember, the current, broken, Pachinko market often moves up on selling, and down on buying. It is entirely perverted by the HFT and the garden variety market makers on both side of the desperate deal...also known as the bid and ask. Attempts to convince people that prices rising means anything is meaningless...as prices can be printed anywhere for short periods of time.
No doubt, there were some algorithms firing off and chasing on the upside. Their programers hit the pillow tonight with the dread that they just top ticked...in the last two hours today. And I think they very near did.
Expect a low print on gold tomorrow...in a last desperate attempt to fool helmet wearing, short bus algorithms to buy tomorrow's open by trying to create the appearance of fear abating in the markets now that Europe is fixed again...because of a conference call.
You said it perfectly, cdad.
To me, the "Market" is just one thing: a gauge of monetary inflation. That's all that's left when all fundamentals like profits, and the performance of the economy are stripped away. And that explains why it's been a sideways market most of the year despite spooky fundamentals: because without more easing there's nothing. Without free Benny Bux there's only risk and nothing of value. Because it's just a pile of paper resting upon another pile of paper, perched precariously on some more rumpled paper
"QE3's started already" When they going to start it here in US and in EZ as well you going to notice.. This is nothing, but a temp bump for now, little relief rally. Real QE will kick all those big papa's from Bonds and treasuries back into Equities.. And GOLD??? QE is mostly inflationary event.. Gold staying low and under pressure? No QE anticipated for now at least from PM's view point.
http://jutiagroup.com/20110913-porter-stansberry-u-s-shifts-to-gas-export-role/
An interesting counter argument to Peak Oil as of yet. Sounds worthy of consideration. Off topic, unless you consider the macro picture today.
Porter Stansbury: " ... geology doesn’t create oil; capital creates oil." Right, Porter, until it doesn't, and that's called ... PEAK OIL!
Technology will save us ... drill, baby drill. Nothing new here.
Yeah, the timeline though, when you factor in LNG, is beyond the timeline of existance for anyone reading this.
For all you know, I'm having my head frozen.
*adjusts thermostat*
Hey, he sent me a free book (unsolicited) in the mail yesterday about the End of America. My daughter wondered why the last chapter was missing.
Understand this one phrase and you will always be capable of understanding why the markets are acting in the manner they have been.
"Markets love totalitarian governments"
Everyone is betting on the capability for the clueless officials to always perpetuate the ponzi without zero incident. At this point things are have become so magnified we need to consider global markets as a 98 year old patient on a respirator, feeding tubes, colostomy bags and an IV while everyone is told our patient (Sovereignty) is still alive but never permitted to see the actual state of the patient behind the closed doors. The above mentioned tube and respirator methods are the unending government intervention, central banks printing and global coordination and endless bailouts. That is the state of our financial markets and the interveners are running out of crack and more citizens are aligning outside the hospital for a glimpse of the health of the patient.
He's on medicare right...? !!!
appreciate the sentiment, but you've a got a bad case of tropes and mixed-metaphors going on here...
L-O-Fucking-L!
five standard deviations is a good sign of a healthy, and efficent market.
Robust, I'd call it. Any lesser market would've cracked under the pressure, but not this one.
This is my favorite Tyler
Whatever happened to the apocalyptic Tyler that said hyperinflation was imminent and Qe2 would result in a bond blow out of catastrophic proportions? Does anyone remember the first few months of this year. Eeeck! the sky is falling! Hyperinflation is imminent! qe2 will destroy the world!
Maybe that Tyler didn't understand how large the credit monster was, or how much it has to be fed be be satisfied.
Was the Dylan Grice piece from this morning really that much above your reading comprehension level?
Here: read it again... and again. Until you get it.
Back when I used to run the route, as we would say Tyler just "Burned" the troll good.
Edit; Troll I still like your insights so please keep posting, don't go away mad.
The USA's Constitution - (Fifth Amendment, last clause) calls for just compensation for confiscation-no ifs, ands or buts. Where is the compensation for seized saving account / MMF account interest since ZIRP?
AARP doesn't want to know! Or, more correctly, doesn't want you to know. Must have something to do with a presidential endorsement, once upon a time.
Why not sue your local FRB branch in small claims court for your confiscated interest? Hint: you gotta right! Very low cost to file a claim. The FDIC also could withstand being filed against. They insured your money on deposit for any and all loss! The default / seizure / confiscation of interest has caused a diminished value of your current principle, a clear systemic loss. Look at your statements since 2007.
If you could pit the FDIC against the FRB, well that would be just AB FAB. Try it, you might win your own money back.
What happened? The market got a limp dick going into the climax. Is it not sure what it's fucking?
bought some oct puts into close...i call major bullshit on this rampfest
Ballsy, I'm just nickel and diming until teh Bernank next week.
agreed...i usually go in 20% to open a position so i'm sitting on some cash but the afternoon action was too tempting...if things go my way i'll add into next week
Nigel Farage: Greece under Commission-ECB-IMF Dictatorship
http://www.youtube.com/watch?v=pry5iL4TIa8&feature=player_embedded
Farage = Truth.
Must watch.
The evil that men do lives after their tenure in office. Caramanlis, he started it. Now the EC has to pick up the Greek pieces. This was a scam from day one by Greek Oligarchs with GS as lead consultants for the tricky dicky part.
EC didn't do due dilligence for sure all these years. But how can you second guess official scammed government statistics that have been fudged for five years or more!
big dump in last 1/2 hour usually seems to effect futires to the down side I have noticed.
Picked up 15 GLD puts today.
Were they laying on the ground? Is that like picking up dog poop? Was it messy?
Not a terrible idea if we're talking Sept. 17 exp. Pretty terrible idea otherwise.
sept. 17 exp. 173 strike.
If Gold gets smacked before FOMC, great, then i can go to the local bullion shop www.bordergold.com/product_rates.php and pick up a gold eagle.
HFT's giveth, HFT's taketh away.
Today's rally proves that all is right with the world. Let's join hands and harmonize .....
Why does options ex never seem to figure into Tylers' thinking?
Theres a reason why everyone always makes fun of the equities guys on any trading floor... theres simply no rationality exhibited in most intraday moves.
Been following Zero Hedge since 2009 and The Tylers have always been doomed and gloomed and short since Spring of 2009. Bottom line is most of us traders TRADE! HFT sucks, the market is rigged but I have to make money long or short. This site will take all of your money if you listen to it. I wish I could make money being rational but that hasn't worked in years.
Nicholas Nassim Taleb: "Get another job."
Which of these two long-term Zero Hedge theses are you referring to:
1. stay out of broken equities
2. buy non-dilutable currencies such as gold and silver, which have both returned more than equities since the March 2009 lows?
Because, while we may not be as smart as self proclaimed traders who, gasp, trade, a well over 100% return is not something we would consider "taking" your money.
So please elaborate.
Lastly, if you were unable to trade this noted divergence trade which would have generated 7 ES point for you in 20 minutes, we sure would love to know what 'YOU' trader trade, aside from whatever the guy next to you is trading of course.
Another good "Burn".
Tyler is incredibly good at flaming the trolls. One of the best I've seen. That's what happens when you have a combination of wit and the facts on your side.
2cnd that
I've learned heaps from Zerohedge. But just for the hell of it, is there a website you could recommend?
this is amusing.
the tylers are "short" since march '09?? lmfao, how long have you been reading zh?? the es/risk compression trades are priceless, free money. where are you seeing tyler's "short" this market???
that said, anyone that trades any market solely based on information coming from this or any other website, bull or bear, is an idiot and deserves to have their money stolen from them by me.
It's CNBC Logic 101. All market bashers are evil shorts who hate America, while its supporters are true patriots who are willing to "take one for the team" by staying long no matter what.
Which traders are you referring to? Momos? Quants? Brokers playing with other people's money? If you're an actual trader using your own, actual money, and have bothered to actually read this site, you would have learned to be agnostic regarding market direction, trade only what you can afford to completely lose and not feel compelled to jump out a window, read and research all sides of the story, and as they present themselves, take advantage of the few arbs that still exist for normal people that actually work.
can we get a clip of johnny five doing the 5 gamma jamma w. kim k as part of her depilatory documentary?
i shorted 20 /es at 1193. set a stop-out at 1196.5. and 1146 the 23.6 fib line. might watch it though, would hate to see it drop to 1147 and blast off and hit my top stop-out (i'm lucky that way)
I did short this rally. However, I am talking of the general theme of how the Tylers always have a huge short bias. I think it would be better served to state the facts and leave out the constant bitching about these ramp-ups. I am sick of HFT and the broken market as much as anyone, but I have to take trades. I think you guys do a great job on the in-depth analysis though.
it's not a "short" bias, it's a "broken fucking market" bias.
in general, the moves make little to no sense. tyler(s) point that out. that's all. no one is telling anyone to short anything. what is so hard to fucking understand here?
I agree. I can't make heads or tails of what is going on anymore. Don't put your money in if you don't understand it.
Someone who bitches about short bias while being short?
The market will break one day, but it's not essentially broken yet. The moves are major block trades which then sell on rallies. What i find amusing is people, probably non traders, don't seem to understand - is that the market is topped. That's it. The technical destruction happened on Aug 8th and 9th. It would be insane, HFT or what ever to push into new highs. It's not going to happen. You want free money (although nothing is 100%). Do what the smart money is doing, buying rallies and selling/shorting tops. Simple
LOL, WUT?
Looks to me like you have a huge Tyler bias.
S&P rallied right into a downtrend and the 89 week sma and promptly cratered. Watch that 89 weeker.
NASDAQ rallied right to its breakdown level and failed.
Today's market was led by the laggards - not a good sign.
My old statistics professor just jumped out a window...
Odds he'll live?
Ahh it's fun to watch the clueless trolls talk about hyperinflation. What they're not seeing is how biflation is really hyperinflation in disguise.
And boy do the numbers this week bear it all out: median American male income is now back to 1973 levels! Median across all categories back to 1997! (yeah, the femmes have come a long way, baby). We don't even need to mention housing prices anymore, too depressing, and we are watching in real time as austerity rips into retirement assets. And CPIs around the globe are all coming in hot.
Is it a surprise then that retail sales and NFIB small biz confidence crashed in August?
Stay tuned, my biflationary Guinea Pigs. You're about to be shocked
The Billion Prices Project @ MIT
ANNUAL INFLATION
(last 365 days)
Tracking pretty close to CPI.
I see this as sufficient cover for further monetary easing. Muni's have had a pretty substantial bounce since "default armageddon day".
Monetary easing was 2010. 2010 was alos record IPO's and flurries of bullshit sales records. Because those are ponzi and the IPO was not new ponzi participants the old ponzi participants were bleeding their 401k dry. 2010 ipo's beat 2007 ipo's.
This is end of 2011. No more easing. Massive quick devaluations.
For a billion prices, maybe.
Meanwhile, back here in reality, I've watched the prices of almost everything I purchase at the grocery store double, gasoline rise to nearly $4 and stay there, the cost of shoes for my children has tripled since last year, and my utility bills are 50% higher overall. While this may be a local phenominon, it is nonetheless correct. Some direct examples- a 25lb bag of flour went from $4.55 to $8.98, Eggs went from $.68/doz to $1.65, cheese went from $.99/8oz to $3.49/8oz., Coffee went from $4.99/lb to $12.98/lb., 90% lean ground beef went from $1.68/lb to $2.99/lb., soda went from $4.99/24pk to $8.99/20pk and basic kid's shoes went from $20 a pair to $60. I could go on all day, but I'm sure you get the point.
Only electronics are cheaper or flat, from what I've noticed, and that is a function of Moore's Law- not necessarily a good indicator of macroeconomic trends. I see TVs and electronic storage have gone down in price- hooray.
When you add the dramatic increase in basic foodstuffs and clothing to the high un- and under-employment, as well as the report that real wages are as low as they were 30 years ago (around here, wages have been, on average, reduced by 15%- and most peoples' hours have been cut 2-5 hours per week,) it paints a very different picture of the real inflationary situation.
What is obviously not being accounted for is the reduction of wages and purchasing power in conjunction with the inflation. Measuring nominal prices only tells a small portion of the story- to be accurate and useful, it should be measured in cost of goods per unit of labor.
d00daa, Lol, get off Tyler's tip and work the base a little.
Lots of economic data out tomorrow. Could be ugly even if there is light news flow from Europe.
QE3 is up and running. To keep IR low the fed has to flip 5 10 30 yr bonds. That is QE3
The market went up all afternoon on vapor volume. Seemed to be the same crap from yesterday. Up four or five points, down one or two the next. It totally reeks of HTF algos trying to capitalize on every trade. The past week has probably hit 98% computer trades. Only computers can cause such precise action and a nearly straight line across the day.
How many people buy stocks to hold them for two minutes and sell?
Maybe just for fun the SEC could ban HFT trading for one day and see how it works out. I mean if HFT algos don't affect the market then we should be just fine, right?
A really interesting thing happened as soon as the S&P hit 1200, it sold off like mad. There really wouldn't be any reason for the market to sell off like it did because there was no news at 3:34 that could have caused it. Boy I guess the bots were programmed to take profits at 1200. The crazy meltup was the result of programs trying to make miniscule moves all day not to overshoot their target. Whoops someone had the timing off a little bit.
Too. Many. Bears.
markets will hit you hard when you are least expecting it. markets rally on bad news is nothing new. let them, no one knows how far the shit is from the fan. and once it will hit it, only few will have the cover.
i hope its stayes like this for longer, more time for me to get more gold, silver and bullets.
Look you have huge institutional plays into the market, any good news after the crap news will force a rally, they have too - they gotta make money. The Dow goes down 100 then rallies into the close, then sells again. That is momentum trading creating a bull run on daily charts. It's all about selling the topped out range, this market will not make any new highs. It's sell on rallies and short crappy stocks. It's luck it got 3days of this, but it's pushing it's luck. The sell at the close was a good indicator.
The EZ mess has been delayed for another 48hrs, but I would 100% be watching Asia. You have inverse trading going on, US/EU rallies, Asia sells. That's a bearish signal coming out of emerging economies.