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Art Cashin Shows US Stock Traders Have Left The Building

Tyler Durden's picture




 

Though it won't come as a surprise to too many who have seen us point to US equity outflows and the dreadfully declining volume on the NYSE, we leave it to UBS' Art Cashin to uncover where the real action is - and more importantly where it really is not. The experienced Cashin points to the early excitement as Asia and Europe remain active and the dramatic ebb as both of these markets head off to supper, leaving just US traders (and investors we assume) sitting on their hands, twiddling their thumbs, and generally not playing the game (aside from the general rumor-mongery that appears to be rising day by day).

 

Art Cashin - UBS: China Flyby And Successful European Auctions Produce Rally That Falters

For months now traders have debated whether China was headed for a soft landing or a hard landing. Yesterday, they released their GDP at 8.9%. While that was a sign of some slowing in China, it was far from a hard or even a soft landing. The wheels never hit the ground.

 

The solid Chinese data seemed to confirm that the world wasn’t coming to an end, at least not this week. That put a bid under various commodities as the Chinese economic engine would still have to be fed.

 

Then came a couple of European auctions that went off without a catch and some improved data out of Europe. With that backdrop, European stocks rallied and U.S. futures followed suit.

 

That, plus better than expected New York Fed data, allowed U.S. stocks to open with a roar. Within the first 20 minutes of trading, the Dow was up over 150 points and the S&P was above 1300. Would the shorts be pushed into a panic?

 

Instead, the sense of urgency that came with the rally began to dissipate.

 

Over the course of the session, I projected the markets run rate to squawkbox adherents as well as several trading associates and friends. As I noted in yesterday’s Comments, the market on close orders are a bit of a wild card in the final volume count. So, I cautioned the friends that the run rate projection should use a target of what’s on the tape exactly at 4:00, just as the bell is ringing. Those calculations then give you a true sense of the intraday activity.

 

With that caveat, here were some of the projections that the market gave yesterday. At 10:00, the run rate was 1.2 billion, a lot more interest and intensity than we’ve seen recently. By 11:00, it had slacked off to 862 million and by 12:00, it was 690 million. At 1:45, the projection was for 650 million. (Luckily, at 4:00, as the bell was ringing, the volume was 651 million. When the “on close” volume was added in, the final count was 806 million.)

 

So, we see the most intense interest and activity in the first 30 minutes of trading when Asian and European players are involved. Then between 10:00 and 11:00, volume falls off as Asians decouple and depart. Europe still has a half hour to go and remains an influence. By noon, with Europe closed, the run rate falls to near its final count. From noon to mid-afternoon, the rate slows marginally to its final constant level.

 

That process tells us a good deal about who is playing and how intently.

 

Another factor in Tuesday’s trading was the rumormongers.

 

On Tuesday, they left their familiar recent subjects of broken Greek deals and rating changes to go domestic. There were rumors that Sears might be taken private. That rumor cleverly built on the fact that Eddie Lampert had recently, and noticeably, bought more stock personally. The rumormongers also took a run at a RIMM takeover.

 

A late session slump in the financials weighed on the rally and the Dow struggled to close up 60. Traders wondered if it was napkin resistance that stopped them or was it further concerns and uncertainty out of Europe. Either way - it was a disappointment.

 

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Wed, 01/18/2012 - 10:48 | 2074154 Everybodys All ...
Everybodys All American's picture

The clowns are in control Art.

Wed, 01/18/2012 - 10:49 | 2074159 GeneMarchbanks
GeneMarchbanks's picture

Traders have left stocks and piled into USTs en masse. Great stuff, super revealing as usual.

Wed, 01/18/2012 - 10:49 | 2074160 uno
uno's picture

time to spread the Bin Liden was found rumor again

Wed, 01/18/2012 - 10:51 | 2074167 new game
new game's picture

left the building - HUH

gone to da nort woods, uff da; retired of manipulation

GONE FOR FUCKING GOOD - ART good buy, soo long to your whole bunch of cons.

fuck you too art..

Wed, 01/18/2012 - 12:35 | 2074559 dracos_ghost
dracos_ghost's picture

Did the traders leave the building or did the building move? There are no US exchanges anymore for the most part. It's the rebirth of "Follow the Sun" trading strategy. Start in Asia, end in the morning in the US. There doesn't need to be any retail markets in the US anymore since pre-market,after-market, dark pool trading dominate the landscape.

 

Wed, 01/18/2012 - 14:03 | 2074981 Landrew
Landrew's picture

Was the good BUY a pun? If so that was A+!

Wed, 01/18/2012 - 10:52 | 2074172 disabledvet
disabledvet's picture

"rumor mongers" in control, eh? Of our market or Europe's? I thought it was the European authorties that banned short selling and the execution of the CDS?

Wed, 01/18/2012 - 10:54 | 2074179 Bansters-in-my-...
Bansters-in-my- feces's picture

So....
Whats with Kitcos gold chart...?

I see it tried to go up,but Benny and Timmy were there.

.............Fuck You's PPT..............

Wed, 01/18/2012 - 11:20 | 2074241 SheepDog-One
SheepDog-One's picture

Mash gold, pump the empty stock casino...same old shit!

Wed, 01/18/2012 - 12:17 | 2074474 MarcusLCrassus
MarcusLCrassus's picture

Buy GLD right before the market closes and sell it right after it opens and you will make money 90% of the time off of this criminality.

 

Its the gift that keeps on giving.   

Wed, 01/18/2012 - 10:55 | 2074181 adr
adr's picture

The market is nothing but rumors leaked to create buying opportunities for insiders. Then the same people authorize stock buybacks so they can unload shares and wait for their next round of stock options. Meanwhile the rich pay 15% tax if we're lucky because investemnts aren't "income". Nice world if you are privaleged enough to be a part of it. 

Wed, 01/18/2012 - 10:56 | 2074186 Dr. Engali
Dr. Engali's picture

How stupid people must be to keep buying into rumors.

Wed, 01/18/2012 - 11:01 | 2074197 Zexe
Zexe's picture

The record retail weekly outflows was the supreme contrarian indicator in retrospect. Fools always get out at the bottom this was the case in 2010 and 2011. nice!!!

Wed, 01/18/2012 - 11:20 | 2074244 SheepDog-One
SheepDog-One's picture

I cant wait till the morning when they MF Globalize all you bull'tards asses big time.

Wed, 01/18/2012 - 11:02 | 2074200 LongSoupLine
LongSoupLine's picture

There were rumors that Sears might be taken private. That rumor cleverly built on the fact that Eddie Lampert had recently, and noticeably, bought more stock personally.

 

Again, here are OPEN assertments and in-your-face indicators of blatent equity manipulation, yet the SEC is where??? (cue crickets chirping).

It's just a matter of time before movements switch from "occupy" to "storm and burn" in pure definition of "change" a-la Jefferson style (not to be confused with the Obama definition of "change" we're witnessing).

Wed, 01/18/2012 - 11:03 | 2074205 new game
new game's picture

game is over as more and more wise up to the joke it is...

but on second thought a sucker was just born. hmmm

off to the casino (sarc).

Wed, 01/18/2012 - 11:06 | 2074211 Alex Kintner
Alex Kintner's picture

As Gandalf yelled while hanging off the cliff in Moira, "Run, you fools!".

Wed, 01/18/2012 - 11:32 | 2074289 Harbanger
Harbanger's picture

"Fly, you fools!"

Wed, 01/18/2012 - 11:54 | 2074351 Alex Kintner
Alex Kintner's picture

You are correct. I will buy you a drink at the Prancing Pony.

Wed, 01/18/2012 - 11:16 | 2074231 Derpmonger
Derpmonger's picture

Anonymous billionaires could be purchasing all of our treasuries and buying up the stock market and the majority would be none the wiser.

Wed, 01/18/2012 - 11:15 | 2074232 Captain Kink
Captain Kink's picture

Scene:  a small south western town with dirt covered streets...

Cue tumble weed.

Wed, 01/18/2012 - 11:27 | 2074258 SheepDog-One
SheepDog-One's picture

Empty casino, a few lights still flashing...theres a bell ringing over on a penny slot machine....tumbleweed blows across the dusty casino floor....aaaand SCENE!

Wed, 01/18/2012 - 11:31 | 2074287 Captain Kink
Captain Kink's picture

Nice.  +10

Wed, 01/18/2012 - 11:16 | 2074234 gjp
gjp's picture

No traders gives free reign for yet another round of new highs in Starbucks, Whole Foods and Apple.  $5 coffees, overpriced groceries, and high-priced toys for adults are all growth industries in an America with near 20% real unemployment and declining incomes for the bottom 80%.  Sickening.

Wed, 01/18/2012 - 11:24 | 2074246 ucsbcanuck
ucsbcanuck's picture

Don't get how SBUX, WFM and AAPL are growth stocks. 

Wed, 01/18/2012 - 14:56 | 2075250 Alea Iactaest
Alea Iactaest's picture

Old saying: when you don't know who is the biggest fool in the room you should look in the mirror. At this point I figure it's me.

Wed, 01/18/2012 - 11:18 | 2074237 ISEEIT
ISEEIT's picture

Any 'market' exposure right now is just nuts. Long term might be reasonable to take positions but speculation is dead. Even metals are very dangerous because of the the overhanging threat of confiscation. Paper gold is no better than greenbacks and physical could easily be made non liquid.

This is really sick and yet the band marches on. It's like we've already gone off the cliff but few realize it.

Wed, 01/18/2012 - 11:23 | 2074247 SheepDog-One
SheepDog-One's picture

We're now well into full retard land, no doubt. One you go full retard, there IS NO going back!

Wed, 01/18/2012 - 11:35 | 2074297 RockyRacoon
RockyRacoon's picture

It's like we've already gone off the cliff but few realize it.

As they say, it's not the fall that kills you, it's the sudden stop.

All shall play out as planned.   When the last inflated fiat dollar is wrung out of the system, it will end.

As planned.

Wed, 01/18/2012 - 12:27 | 2074523 ucsbcanuck
ucsbcanuck's picture

"Any 'market' exposure right now is just nuts."

Agreed - staying out of this nonsense for a while. None of this makes any sense at all.

Wed, 01/18/2012 - 11:22 | 2074248 shushup
shushup's picture

what a waste of time

Wed, 01/18/2012 - 11:36 | 2074303 RockyRacoon
RockyRacoon's picture

Well, reading your comment didn't exactly expand my horizons.

Wed, 01/18/2012 - 11:27 | 2074259 Ruffcut
Ruffcut's picture

No matter how we traders try, we have a bear or bull bias. Playing the short side has more risks. Playing the long side is beneficial to more parties.

In comparison to history the volume is ok. Comparing to algos and HFT of the recent past should not be too alarming. If things get worse I still anticipate a ramp, similar to the tech boom.  WFC saved a portion of their ass buying a shitload of stock march 09. Buffy and goldy made some shifty deals, doing god's work.

Wed, 01/18/2012 - 11:28 | 2074270 SheepDog-One
SheepDog-One's picture

Yea yea....now watch what REALLY happens one morning when all your trading accounts are suspended until further notice, funds unavailable....market-wide MF Global and its coming soon.

Wed, 01/18/2012 - 11:27 | 2074262 ucsbcanuck
ucsbcanuck's picture

Really I don't understand the whole thing - I mean, basically since 2002 the US economy has been one big debt-driven economy. If the US economy is going to continue to grow, that means consumers need to take on more debt. But how is this even possible? More subprime auto loans? Doesn't that just mean the US is going to fall off a cliff again?

How does one invest long-term in a market like this?

Wed, 01/18/2012 - 11:33 | 2074291 SheepDog-One
SheepDog-One's picture

Well hell man, all ANYONE has been doing for the last 3 years is 'investing' based upon the expected further printing of piles of free money to be thrown at stocks. Any and all 'bad news' immediately offset by a 'raised expectations for more QE!' so hell any investing has just been playing in a rigged casino that everyone believes is rigged in their favor. Nothing more.

Wed, 01/18/2012 - 11:56 | 2074342 ucsbcanuck
ucsbcanuck's picture

I guess you're right - so you think things like earnings and fundamentals are out the window then. 

I stayed out of the "game" for nearly 2 years now. THe reason - I just didn't know when SHTF again. Looks like nothing has changed in the intervening period - it doesn't make any sense to think long term.

Wed, 01/18/2012 - 11:58 | 2074370 SheepDog-One
SheepDog-One's picture

Exactly...WTF? Just 'because'.

Actually my OLD theory from a couple years ago still is holding water I believe, that is theyre just manipulating the crap out of it all the keep the 401K bathrobe brigades and pension fundies at ease and calm until theyre totaly raped one morning of their $5 trillion dollars. 

The central banksters are not manipulating the shit out of everything just for fun to amuse themselves, thats for sure.

2006 market levels....and everyones SO impressed....well, not me! 

Wed, 01/18/2012 - 12:25 | 2074508 ucsbcanuck
ucsbcanuck's picture

"2006 market levels ... and everyone's SO impressed ... well, not me!"

Not me either. There's nothing to justify 2006 market levels. It's built on a house of sand.

Wed, 01/18/2012 - 14:53 | 2075241 Alea Iactaest
Alea Iactaest's picture

SD1 - I think there are more than a few people who have been out of the market for a couple of years, just watching in amazement. Pretty soon resistance will weaken and they'll dip their toe in. Then a few more as the market keeps levitating. When a sufficient amount of money comes off the sidelines that will be the next top. Watch for fund flows to turn positive again. Just my 2c

Wed, 01/18/2012 - 11:27 | 2074264 onebir
onebir's picture

"Napkin resistance"?

Wed, 01/18/2012 - 11:41 | 2074315 RockyRacoon
RockyRacoon's picture

If you were explaining the "market" to a novice over lunch, you'd grab a napkin and draw some support/resistace charts to help explain.  Hence, the napkin charting slang.

Wed, 01/18/2012 - 11:59 | 2074380 SheepDog-One
SheepDog-One's picture

Or if youre like Art and the boys, your napkin has been marinated in a bit of scotch and so not very strong at all.

Wed, 01/18/2012 - 12:25 | 2074514 prodigious_idea
prodigious_idea's picture

Thanks for the reply but I guess I don't understand the use of the adjective "napkin" to describe the resistance.  Napkin, as opposed to what other type(s) of resistance?  Thanks.

Wed, 01/18/2012 - 13:34 | 2074819 RockyRacoon
RockyRacoon's picture

Read again... slowly.   The chart, drawn on a napkin (a quickie, a rule of thumb, so to speak), shows chart support/resistance. 

Akak where are you!!??

Wed, 01/18/2012 - 14:51 | 2075222 Alea Iactaest
Alea Iactaest's picture

Napkin... you're just sketching something. Not super precise, just kinda eyeballing it.

 

Don't make it more complicated that it needs to be.

Wed, 01/18/2012 - 11:28 | 2074267 Amused2Death
Amused2Death's picture

Yet the markets continue to melt up...Does that mean the Asians (and Europeans) are smarter than us, or just too busy to read the memo?

Wed, 01/18/2012 - 11:36 | 2074293 virgilcaine
virgilcaine's picture

Time to exit stage right Art. Do a closing number like a Vaudeville act with a cane and hat and then the curtains come down.

Wed, 01/18/2012 - 11:39 | 2074310 Logiclee03
Logiclee03's picture

meanwhile zh has been masturbating on it's keyboard....s&p has shot up almost 200 pts in 30 days...nice miss

Wed, 01/18/2012 - 11:49 | 2074332 SheepDog-One
SheepDog-One's picture

Based upon what?

Wed, 01/18/2012 - 12:13 | 2074453 Village Smithy
Village Smithy's picture

I don't think I read any posts here at ZH calling for a drop in the markets. ZH reports facts about the economy and the market. These have little if any bearing on the direction that the CB manipulated market will take.

Wed, 01/18/2012 - 11:42 | 2074316 spinone
spinone's picture

don't speculate, accumulate

Wed, 01/18/2012 - 11:53 | 2074338 SheepDog-One
SheepDog-One's picture

'Yesterday China released their 8.9% GDP and we all marveled at its splendidness'...

LMAO how hillarious is it that we start by BELIEVING Chinas GDP data dump as pure numbers crunched wholesome goodness and truth? What a bunch of fuckin idiots we are. Or, they think we're all retards, or whatever. What a joke!

Wed, 01/18/2012 - 12:24 | 2074500 The Limerick King
The Limerick King's picture

 

 

I thought Chinese numbers were real??!!

I thought CDOs were a deal??!!

Was OJ not framed

As Johnny C claimed??!!

I'm not quite as smart as a  seal!!!

Wed, 01/18/2012 - 11:56 | 2074362 toadold
toadold's picture

Well according to my calculations the local lakes should have rissen by at least an inch due to all the boating accidents involving guns, ammunition, gold, and sliver being  lost...........I think some people have been fibbing.  "Oh would I lie to you baby..."

Wed, 01/18/2012 - 12:12 | 2074451 Jason_1sandal
Jason_1sandal's picture

I was an adventurer like you once.... til I took an arrow to the knee.....

Thu, 01/19/2012 - 02:51 | 2077187 hermes trismegistos
hermes trismegistos's picture

A little tip.Notice when Art Cashin articles come up, see what the market has done and what it will do after.

You may be surprised at what you find. Trust Allah but tie your camel.Good luck

Sat, 02/11/2012 - 01:21 | 2148756 hotstockpicks
hotstockpicks's picture

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