Brian Sack's Window Dressing Farewell Gift To Wall Street

Tyler Durden's picture




 

Stocks opened around 2% gap higher this morning after the late-night headlines from Europe made many think that the tooth-fairy and Santa are real once again. S&P 500 e-mini futures saw some selling into the open but then stabilized amid a very narrow range for much of the rest of the day - leaking higher on low volume-driven short-covering. The news from Germany of ESM ratification was greeted with absolutely no price movement as an indication of just how insane things are but the need to drive stocks up in the last few minutes was crazy. Into the close, volume exploded as ES rose 10pts in minutes from absolutely nowhere. Average trade size was very heavy during this period and delta skewed notably to block selling into the ramp though it is never that obvious. ES closed above its 50DMA back to its highest since 5/8.

The Window-Dressing Roadmap

It would appear that the No 'New' QE from the FOMC on 6/20 left a lot of all-important funds long-and-very-wrong. Today's rampfest miraculously lifted (window-dressing) Energy and Financials (two of the MOST sensitive sectors to QE) back to perfectly unchanged from the exact time of the FOMC announcement. Notably, since that exact time 'safe' sectors of Staples, Healthcare, and Utilities have outperformed as Tech, Materials, and Discretionary are underperforming (though all did their very best to end the month up (especially relative to the FOMC news moment)... fascinating eh?

 

Stocks were on their own with the last 10 points or so of the day as USD, Gold, and Treasuries all started to point south into the close (orange oval)...

 

Everyone enjoyed the day's window-dressing escapades aside from JPM which dropped 3% from its opening levels and closed in the red. This chart is performance from the open of today...

While stocks exuded every bit of total insanity, Treasuries ended the week lower in yield across the whole complex (leaving Gold, the Long Bond, and the USD all almost perfectly +2.8% YTD). WTI is down 14.5% YTD to close Q2 thanks to a huge VW-like 9% squeeze higher today (that acounted in correlated risk terms for around half of equity's performance) up to around $85. Equity and HY credit have recoupled but HYG is the most expensive relative to its fair-value in over a month. The USD plunged on EUR strength (and AUD carry trades) to end the week -0.66% but Gold and Silver more than doubled those implied gains ending the week +1.8%. VIX tested below 17% late on but ended above it (down 2.6 vols) closing at 6/20 closing levels. The main takeaway is that most risk assets recovered to last week's highs but stocks turned the amplifier of insanity to 11 and pushed back to near two-month highs not to be outdone into quarter-end (wink wink).

Broadly speaking risk assets lost ground on the quarter with only the long-bond and USD up from 3/30. Interestingly, the Bond, Gold, and USD are all perfectly in line as we close Q2.

Equities surged above last week's highs into the close as a combination of stop-runs and algos looking to tickle us for large block order exits (the blue bars in the chart) made the day just that little more exciting...

but WTI was the winner of the day in terms of multiple-sigma moves...

The S&P just had its best June since 1999 - makes perfect sense for all those funds that needed a good quarter...

now for the implementation of that 'save-europe' plan...

Charts: Bloomberg

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Fri, 06/29/2012 - 16:32 | 2574544 vast-dom
vast-dom's picture

Fuck the fucking fuck!

Fri, 06/29/2012 - 16:35 | 2574565 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Derahrah King Rahrah rah rah rah!!!!!!!!!

Fri, 06/29/2012 - 16:59 | 2574680 Xibalba
Xibalba's picture

hmmmmm. What happened in '99?   

 

OH.  right

Fri, 06/29/2012 - 17:28 | 2574748 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

hmmmmm....

How much fiat had been printed then?

OH.  right

Fri, 06/29/2012 - 17:39 | 2574766 Marginal Call
Marginal Call's picture

The S&P mini is right back where it was before all the bulls got........stopped out.  And now all the shorts got squeezed on the way back up.  It's almost like the market goes where the liquidity is.

Fri, 06/29/2012 - 17:49 | 2574789 Debtonation
Debtonation's picture

But I bought the 1000x inverse S&P ETF.

Fri, 06/29/2012 - 18:00 | 2574829 Marginal Call
Marginal Call's picture

I prefer the 100000X myself, but just wait till next week and it will be worth a mint.  If your broker doesn't liquidate your account in the meantime. 

Fri, 06/29/2012 - 18:59 | 2574951 derek_vineyard
derek_vineyard's picture

oil is what took center stage in my analysis of days events

Fri, 06/29/2012 - 20:47 | 2575143 AldousHuxley
AldousHuxley's picture

you sure this is not the result of Supreme Court ruling this week that corporation peoples can bribe as much as they want in US politics?

 

 

Fri, 06/29/2012 - 22:23 | 2575286 e_goldstein
e_goldstein's picture

Missed that one Aldous, have a link? Thanks in advance.

Fri, 06/29/2012 - 23:11 | 2575333 AldousHuxley
AldousHuxley's picture

http://online.wsj.com/article/SB1000142405270230487030457748847281347206...

 

Supreme Court Rejects Corporate Campaign Spending Limits

 

Not only bribery legal, it has no limit!

 

These guys also gave OK to illega immigrants, as long as they are law abiding slaves, they can stay in US.

Sat, 06/30/2012 - 00:04 | 2575381 e_goldstein
e_goldstein's picture

As long as they vote :-/ Yeah, thanks again.

Fri, 06/29/2012 - 22:46 | 2575303 otto skorzeny
otto skorzeny's picture

TVIX bitchez

Fri, 06/29/2012 - 18:14 | 2574859 Stoploss
Stoploss's picture

hmmmmm.....

How much fiat has been printed since then?

OH. right

Sat, 06/30/2012 - 04:03 | 2575524 e_goldstein
e_goldstein's picture

That's a trick question.

 

Fri, 06/29/2012 - 17:02 | 2574685 ACP
ACP's picture

Fuck fuck fuckity fuck.

Well, RUT is fulfilling a great pattern starting Sep. Another computer generated stock simulation jammed into the exchanges.

Fri, 06/29/2012 - 19:32 | 2575034 Jim Cramer
Jim Cramer's picture

Listen all you nitwits all that matters is this:

The EU has come out with a plan to plan the plan they are planning on presenting at the presentation to the world conference of the plan they plan to use in the plan they are planning to fix it all.

This is much better than the plan they were planning over the last year.............I promise. ;)

Fri, 06/29/2012 - 16:33 | 2574552 Cdad
Cdad's picture

Once again...the comparison emerges of 1999.  And in absolute numeric terms, I don't doubt it.  However, in economic turns, this is more like 1937.  

I suspect today's session chased out the very last of the human beings...at least those who are not part of the criminal syndicate known as Wall Street.

Thanks for this wasteland, B. Bernanke.  Really appreciate it...what with you saving all of these computer rigged putrid banks and all.

Fri, 06/29/2012 - 16:38 | 2574578 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Please put all the world's fiat on one side, and put all other assets on the other.  Are they balanced?  I think not.

Now realize that fiat has zero intrinsic value.  Realize you are pricing everything in this fictional fantasy.  Then realize the numbers do not matter.  The only thing that matters is the supply and demand of it all.

Is there an actual demand for fiat?  No.  Fiat is not needed in any rudementary form.  So how does it trade for real goods?  Because you are living in fucking Candyland.

Fri, 06/29/2012 - 16:52 | 2574642 Yen Cross
Yen Cross's picture

  You forgot the MOON. /sarc

Fri, 06/29/2012 - 17:30 | 2574751 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You lost me.

Sat, 06/30/2012 - 04:05 | 2575525 e_goldstein
e_goldstein's picture

You forgot your bathsalts.

 

Fri, 06/29/2012 - 16:34 | 2574558 Fidel Sarcastro
Fidel Sarcastro's picture

It's a mother fucking JOKE of a market.  I was long and made $ - no sense in fighting it...nevertheless, it's a fucking pathetic excuse for a "market."

Fri, 06/29/2012 - 17:34 | 2574756 Not Too Important
Not Too Important's picture

I just want to know how much this costs. Week after week, month after month, year after year - all off the books. We have to be into the trillions with all the buying. I'm not a CPA, but I just can't believe there's no trace of this spending.

Does the Fed just present the Government with a bill every year, unitemized, and we're expected to pay it?

 

Fri, 06/29/2012 - 18:19 | 2574872 bnbdnb
bnbdnb's picture

Primary dealer buys treasury.

Primary dealer sells treasury to fed at 102%.

Primary dealer invest 2% gain in stocks.

Fed print to cover 2%.

 

Rinse, repeat.

 

Fri, 06/29/2012 - 20:01 | 2575073 Not Too Important
Not Too Important's picture

Or,

Primary dealer buys treasury.

Primary dealer sells treasury to fed at 102%.

Primary dealer invest 2% gain in stocks.

Primary dealer loses 2% in stocks.

PPT buys up market.

Fed print to cover 2%, + 2% loss.

 

Rinse, repeat.

 

I'm trying to figure out how much Sack is spending. I think it was yesterday one number was 3.3 billion. Citadel isn't a PD. Isn't Citadel where Sack runs his game? Who owns Citadel? Is this where all the PPT stock is sitting? If so, their book is HUGE.

I get this is all illegal - the big boys are manipulating the Liebor, Sack can buy up anytime he wants - and no one is going to do anything about it, but the numbers are gigantic.

Fri, 06/29/2012 - 22:13 | 2575269 Ned Zeppelin
Ned Zeppelin's picture

When you are manipulating things at this level, you also sell sometimes, so the PPT net postion is probably not all that impressive (unlike the size of the Fed's ba;ance sheet)

Sat, 06/30/2012 - 04:06 | 2575526 e_goldstein
e_goldstein's picture

In the long run, you made absolutelyfuckingnothing.

On the bright side, you still get to pay taxes.

 

Fri, 06/29/2012 - 16:35 | 2574563 HungrySeagull
HungrySeagull's picture

Gawd, a Erectile dysfunction of a market.

Somebody pass the JELLY!

(A cookie if you know where that line came from.)

Fri, 06/29/2012 - 16:42 | 2574597 AccreditedEYE
AccreditedEYE's picture

Polaner All Fruit

Fri, 06/29/2012 - 16:36 | 2574568 Atlantis Consigliore
Atlantis Consigliore's picture

No mo retail, no mo trade;

limit up/limit down,

we only trade options....or vix

no more futures....

 

suckers...

Fri, 06/29/2012 - 16:50 | 2574576 Flakmeister
Flakmeister's picture

You don't get it... This one goes to *11*....

Bought some SSO puts into the close....

Fri, 06/29/2012 - 16:39 | 2574586 ebworthen
ebworthen's picture

A nice quarter end ramp increases taxes too, eh?

Window dressing all around.

Fri, 06/29/2012 - 16:39 | 2574587 AccreditedEYE
AccreditedEYE's picture

Truly with such price action the world MUST be saved.. whew! Thank God that's over. Now, let's take a look at the global growth figures...

Fri, 06/29/2012 - 16:40 | 2574592 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

What shall we measure growth in?  The dollar?

lol....

Fri, 06/29/2012 - 16:46 | 2574615 AccreditedEYE
AccreditedEYE's picture

However you measure it, it's going to be really great watching them talk earnings down while keeping ES higher. Total joke of a market.

Fri, 06/29/2012 - 16:39 | 2574588 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Way to go Tyler.  You are killing it.

sarc/

Fri, 06/29/2012 - 16:41 | 2574591 RobotTrader
RobotTrader's picture

Wow, I wonder how many bears were pole-axed by today's rally, now sitting in the emergency room?

 

What happened to that poor schlub last night who shorted $100k worth of EUR/USD contracts?

Hands down, today was one of the biggest reversal days ever.

All bearish chart action instantaneously converted into bullish patterns by TPTB:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=72282648

Now Capitain Bill O'Neil at Investors Business Daily will be giving the all clear signal to all the Riverboaters, so the momentum has now changed to the up side.

As far as the "GUMS", Europe's problems never really entered their conciousness.

Now its going to be back to:

- How much alimony will Tom Cruise have to pay?

- What is the next outrageous comment by Howard Stern on "America's Got Talent"?

- Who is going to win the NASCAR race this weekend?

- How about an update on the "Fashion Police" in US Weekly magazine?

- How many foreign escorts can I bang at The Hamptons this weekend?

- Can't wait for the barbecue on July 4th!!!

My condolences to those who shorted based on the hysterical arm waving going on at King World New about the "Global Financial Collapse"

LOL....

Fri, 06/29/2012 - 16:46 | 2574610 slaughterer
slaughterer's picture

On Monday we will lose more than 30% of the gains from today.  

Fri, 06/29/2012 - 16:47 | 2574621 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Derahrah!!!!!!!!!!!!!

Fri, 06/29/2012 - 17:18 | 2574729 Yen Cross
Yen Cross's picture

 Works for me. My breakeven is just above the 38.2% Fibi...

Fri, 06/29/2012 - 16:51 | 2574636 resurger
resurger's picture

Robo! you were long Lulu at 74 right?

lol , fucking loser

 

Fri, 06/29/2012 - 17:53 | 2574806 Squid Vicious
Squid Vicious's picture

No doubt as well as bunch of other retailers that have been absolutely monkey-hammered since May 1... now he comes out of the closet after a 30 handle squeeze-fest... classic!

Fri, 06/29/2012 - 16:51 | 2574637 francis_sawyer
francis_sawyer's picture

All you need to worry about is if your momma is going to kick you out of the basement this coming week...

Focus on that...

Fri, 06/29/2012 - 17:04 | 2574677 dwdollar
dwdollar's picture

+1 for the O'Neil comment. You got that right.

However, I wonder how many retail investors (if any) O'Neil still commands.

Fri, 06/29/2012 - 19:06 | 2574964 Tippoo Sultan
Tippoo Sultan's picture

Those he commands move only in command. Nothing in love.

Fri, 06/29/2012 - 17:43 | 2574777 SmoothCoolSmoke
SmoothCoolSmoke's picture

Poor shlub here.  Closed that short at 4:47 am.   +$12.3 K.  Reshorted Euro at the close today, but only $25K.  Will add to it on Sunday, after the spreads close, on any uptick.  Will add to that until I hit 50% of my margin (you don't even wanna know pal). Expect tod o quite well as the EU BS fals apart Monday.

Have a nice weekend small timer.

Fri, 06/29/2012 - 18:04 | 2574840 bnbdnb
bnbdnb's picture

I love it when everyone gets bullish.

Fri, 06/29/2012 - 20:31 | 2575120 slingshot
slingshot's picture

anyone who cannot play boths sides of the market should find another line of work

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