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Broken Market Chronicles: An Update
From Peter Tchir of TF Market Advisors
As far as I can tell, the S&P bounced 1% because Russia said they would buy the bonds of France and Germany. Well, actually they said they would purchase Common Euro-Area bonds. I assume Russia already buys a lot of bonds from Germany and France. How is this any different? They didn't say they were willing to buy the debt of the PIIGS. In fact, this statement tells me they went out of their way to say they would NOT buy the debt of the PIIGS. That the only way the PIIGS will get money from them is to get their debt guaranteed by Germany and France. I really don't see how this headline could have been interpreted as Russia buying the bonds of the PIIGS. Yet it was. Given the German court ruling, no matter what Merkel and Sarkozy say, a true Eurobond or full backing of the PIIGS by Germany is unlikely. Again, market was happy to ignore that for a 1% move.
This market seems completely broken. The S&P could be at 1,300 or 1,000 in a week, and neither move would be a complete surprise. One way or the other, moving 1% on a headline that really didn't seem to add any new information is scary. The S&P now seems to move in 5 pt increments. Certainly when credit markets get that illiquid they have at least one good move wider before providing some big relief rallies. The market for SOVX started exhibiting severe lack of liquidity back in June. Since liquidity broke down, it has generally traded wider, with some big sharp rallies. Almost all the other credit indices followed the same pattern as their liquidity broke down. I don't see any reason for equities not to follow. Some might argue that we are at levels where we are due for the relief rally. I'm betting that we aren't. The manic nature of the stock market seems to have increased lately and we are too far off the lows to be comfortable that relief rally is ready.
Having said that, I will be taking some shorts off the table so I can reset them if and when we get the bounce on the grand announcement that some variation of Eurobonds is being discussed. They will never actually be issued, or if they are, they unlikely to get done at a price that accomplishes what people hope, but that won't stop the initial move higher and the additional move up on short covering.
On a side note, European stocks and credit are once again performing with a higher beta on the way up and down. For awhile it seemed like they only had more beta on the way down. Now that so many people have bought into the decoupling theory it is interesting to see moves where Europe doesn't seem as sticky on the upside.
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"Banco Popolare shares suspended for excessive volatility"--RAN Squawk, right now.
It's like the spin-n-puke machine in the old Bill Cosby monologue...
As someone reminded me last night, "There is no market."
there is only the bernank.
Market is evolving , soon we all will get used to and that will become normal to us.
As long as the pattern of rumors stays , we are good to go.
Love that routine... "Parents really hate their children... why else would they invent....."
Cosby was and is the best in his field. No sugar coating of the whole parental experience. Just tell it like it is.
Probably the best story-teller of all time.
See? Everyone is scared that the market might either vapor open limit up to 1,300 magically in a week or freefall any minute. So bets get taken off the table...fear of everything, volume drys up....
and the computers take over. And we all know which way the market goes at that point. Therefore, when volume drys up, go long. Put in very tight trailing stops. Of course, this is if you play this rigged game. Buying gold and silver through the ole commodore computer will all too likely outperform this half too-cute clever stuff though--and it doesn't help Wall Street.
It seems obvious that the only trade is no trade.....long precious and some cash (while Europe unravels) and BTFD in metals.
You are obviously not watching Netflix, where the true nation destroying signal is being telegraphed, causing J. Cramer to convulse in wonder... what he will talk about for the rest of the week.
**additionally...someone is selling great big blocks of Simon Property Group. As go shoppers, so goes consumer discretionary obsessed Wall Street**
***additional to the additional...FCX is trading like grim death...the grim reaper slowly approaches China****
Time to rename this thing. You are participating in THE SHOCK MARKET.
Not me! Im watching this clownshow from the nosebleed seats.
this tape is making me dizzy...
Broken markets everywhere. But at least in the insolvent Europe the equity markets have come down. Italy near 2009 lows for example. Most equity markets down 20-30% YTD. But in the good ol' USA Russell 2000 almost 100% up since 2009 lows, S&P500 down less than 10% YTD. Bernanke & Beard have done great job for the 0,1% of the population.
.1% is so 2010...now it is .001%
This market will end far higher today. everyone is just sitting around wating to hear about the next "save."
I wouldn't be so sure about that yet. In the last 22 minutes, VIX was shanked...in the throat, I think. VIX stood up and declared it a flesh wound.
With a VIX of 38...after 20 hours of miracle hopium injections, I fail to see how you could be confident in market direction. Yes on the next "save" being telegraphed. However, you are supposed to be thinking ahead of that which is already telegraphed.
As for me...no idea which way we go...but if it is up...then gold HAS TO BE THE NEXT SHANK VICTIM.
Hey, if your salary depends on betting other people's money - why not?
They are just betting your dough for a percentage that'll keep them living care-free (or so they think). The day that their "let it ride" philosopy loses - they'll just move on.
After all, nobody is going to pay anyone to tell them to keep their money in cash and PMs (if I'm wrong about this, please let me know - I'm really good at this advice).
Anybody who lets a broker play this market with their money deserves what's coming to them.
"Market" is setting up for a "relief" rally to the DOWNSIDE rather then the upside! There is nothing that suggest an upside move, for what reasons ever but a lot that suggests/confirms/makes clear that a rather SUBSTANTIAL DOWNSIDE is coming, when it gets this erratic and direction less then you ought to get out or get short!
There is nothing coming out of the FEDsters next Tuesday, there won't be no JOB ACT since there is NO FUNDING for it and so forth! Europe I guestimate will go dwon latest next week after ALL WORLD will be very disapointed in our bearded friend at the FED! I cannot lose this sense that they are ALL waiting for The Benster to save the day, sure if politically attainable I bet he would dronw us in USDs but it's not!
No Santa this time, a "market" on its knees say at 900 or less may give them a "reason" and an "excuse", other then that...you use your imagination, eh!
Unfortunately the machines can only "imagine up" not down...it's a programming thing.
S&P bullish channel broken to the downside. However, thats totaly meaningless and next will just as likely break to the upside.
After all, we have nothing but a carrot and stick economic program worldwide now.
Next Tuesday is 3 strikes and yer out for Bernank, already having kicked the QE3 can twice now.
Unfortunately the machines can only "imagine up" not down...it's a programming thing.
Until the right people are positioned all short, and they flip the up switch to the down position.
I tend to agree with this. What are they gonna do? Operation Twist which is already priced in: look at the 2s10s30s. It's already a done deal so Bernanke doens't have to even inititiate it now, which he won't. He already said they would limited effect from operation twist. Another LSAP now? Not unless Europe completely unravels before Sept. 21st...because it's not like the banks really need more liquidity/excess reserves than the 1.6 trillion they're already just sitting on.
So what bullet? What tool can they use? And what will the Obama plan do? Not much, there is no way it passes....447 billion in new stimulus paid for by raising taxes on the rich? yeah, right....and then what's the super comittee to do?
It's all shiteyes and monkey talk now. Waving around empty guns will have limited shelf life.
They keep bragging about all these vast tool boxes they have...but what does a view of the tool box reveal? Print and monetize, its all theyve got. Their tool is a 5lb sledge hammer.
'Uber Congress' will commence gun ban, cutting food stamps, welfare, and unemployment checks...theyre the thug crew behind the scenes.
LOL
What?
These treasuries are going to be the end of the system. I wonder how much is tied up in sub-2% 10yrs right now?
Thanks once again for your great insight!
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get this asswipe outa here
the ad trolls either need to stop the ads or get the fuk off the boards