Consolidation, Covering, Or Capitulation?

Tyler Durden's picture


While AAPL keeps levitating (no matter how high complacency in its options stands), it seems the rest of the equity markets are less enamored (for now) with this strange new normal of the Fed/ECB's own making. Below we present four charts indicating regime shifts in average trade size, index dispersion, high-beta sector convergence, and high-beta financials convergence. Whether these are bullish consolidations, short-coverings, or total capitulations - who knows? But with the S&P 500 reverting lower to catch-down to VIX's less sanguine view and the total lack of a move on the BoJ news today - we suspect (at least for now) that all the good news is out.


Average Trade Size spiked into and around the FOMC announcement (helped by the futures roll also) - this tends to portend trend changes...


High-beta sectors tri-verged immediately after the announcement but have rapidly converged back to a more systemic level in the last few days...


High-beta financials (BofA and MS) surged on the news but have falledn back rapidly since...


and Dow Transports have dropped notably as th NASDAQ remains supported by the incredible edible AAPL...

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Tue, 09/18/2012 - 15:37 | 2808243 not fat not stupid
not fat not stupid's picture

Just consolidation. The top will come when Tyler gives up and buys stocks again.

Tue, 09/18/2012 - 16:02 | 2808323 Michael
Michael's picture
Thank The Creator; Newspaper Ad Revenues Collapse to 1950 Levels

Tue, 09/18/2012 - 16:09 | 2808337 Michael
Michael's picture

It's so easy to get rid of government thugs in England now, since criminals don't play by the rules.

Gunned down in cold blood: One-eyed suspect held after two policewomen aged 32 and 23 lured to estate by false burglary report and shot dead

Read more:

Tue, 09/18/2012 - 16:25 | 2808370 ACP
ACP's picture

That's why it's taking the US govt so long to do exactly that in the US...that pesky 2nd amendment.

Instead of just takin' shit, we gotta spend decades brainwashing people, passing ridiculous laws, demonizing everyone who disagrees with left wing dogma, and THEN, after all that, we can take shit. Edit: Imagine Samuel L Jackson saying that last sentence, it'll sound better.

Tue, 09/18/2012 - 16:18 | 2808355 bigdumbnugly
bigdumbnugly's picture



Tue, 09/18/2012 - 16:52 | 2808464 GernB
GernB's picture

You're joking, of course, but I've heard commentators shocked when long time bears announce are now coming over to the bull side post-FMOC. Some of them were very staunch bears much like Tyler. To me that's as much a sign of the top as the huge volume on the FMOC announcement. When ever last bull has bought, then whose left to run the price up?

Tue, 09/18/2012 - 15:38 | 2808245 gjp
gjp's picture

The market is utterly asleep and adrift.  Commodities, bonds, FX, still normal-sized moves, but equities volume and even price movement are gone.  QQQ has a range of less than 0.5% today and yesterday.  The stench of death is overpowering.  But I guess that doesn't have to mean it will ever go down.

Tue, 09/18/2012 - 15:41 | 2808257 PontifexMaximus
PontifexMaximus's picture

God's work is done!

Tue, 09/18/2012 - 15:38 | 2808248 PontifexMaximus
PontifexMaximus's picture

Don't dare to figure out AAPL making a split.....

Tue, 09/18/2012 - 15:59 | 2808305 DormRoom
DormRoom's picture

In the 1920s RCA was the AAPL of its day.  It too was @ lofty evaluations right before the Great Crash when its stock price collapsed.

Tue, 09/18/2012 - 16:30 | 2808381 dwdollar
dwdollar's picture

How dare you bring up history in front of all these hedge fund managers who are prIvy League graduates and undoubtedly know more than you do. I'm sure they understand all the risks and have a contingency plan to either cry for more QE from the Fed, or to ask Uncle Scam for a new bailout wad, should the price inevitably sink with everyone still on board.

Tue, 09/18/2012 - 16:45 | 2808448 geewhiz190
geewhiz190's picture

there have been a number of large consumer electronic company bubbles in the past. how big is too big can't be known. but when you start to hear wall street sell side analysts talking about the "smartphone supercycle" you have to wonder.  could Apple be the SOMA of Huxley's novel that so deadened the sensibilites of the masses that they were   completely detached from the world they lived in?  has Jobs brought us into the "Brave New World" ? or am I missing the boat on a tech revolution so big it will change the world?  what say you ZH ?

Tue, 09/18/2012 - 16:57 | 2808468 dwdollar
dwdollar's picture

The smartphone can do little more than the PC, which was the center of the tech bubble. The only major difference is that smartphones bundle everything in a neat little package and dumb the software down so any fucking moron can use it. Very similar to Motorola's dominance in the portable and car radio market back in the day.

Tue, 09/18/2012 - 15:42 | 2808258 Cognitive Dissonance
Cognitive Dissonance's picture

"....we suspect (at least for now) that all the good news is out."

Bazooka Ben - "There's plenty more where that came from fool."

<Ben - "Ummm....can I get a change of Depends please?">

Tue, 09/18/2012 - 15:44 | 2808264 walküre
walküre's picture

Banks getting $40 billion "gifts" each month so they may share the "wealth" with the Fed and own pieces of the world.

Why are people still working? For what or for whom? Stop working, stop paying bills and take what you can carry with two hands. There is NO law and there is NO order. Ben gave UP last Thursday and declared a "free for all".

Tue, 09/18/2012 - 16:03 | 2808324 ghostzapper
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BINGO!  I can't understand why anyone would pay their mortgage if it is ultimately connected either directly or indirectly to one of the larger banks.  Ha they get freebies from Fed and then expect you to pay your mortgage.  Fuck it just stop paying it.  Shalom has got your back at least that's what he said.

Tue, 09/18/2012 - 16:54 | 2808476 GernB
GernB's picture

Can I buy a bank please. Preferally one with lots of junk debt.

Tue, 09/18/2012 - 15:45 | 2808268 e-man
e-man's picture

Ever since Bernanke traded in his Fiat for an Infiniti, as far as I'm concerned it's just all crap.

Tue, 09/18/2012 - 15:50 | 2808270 LULZBank
LULZBank's picture


we suspect (at least for now) that all the good news is out.

You are underestimating, my friend, and forgetting that bad news is also good news.

Tue, 09/18/2012 - 15:52 | 2808297 Vincent Vega
Vincent Vega's picture

Bad news was good news when merely talking or suggesting the next round of QE. Now that Fuck You Bernanke has gone all in and pledged QE 4eva, bad news may actually be bad news.

Tue, 09/18/2012 - 16:09 | 2808335 LULZBank
LULZBank's picture

So are well fully loaded with shorts, leveraged to the max then? :)

Just wait for the next White Swan... and how the "rational" investors will squeal! lol

Tue, 09/18/2012 - 16:18 | 2808354 Vincent Vega
Vincent Vega's picture

Loaded...yes (if ya know what I mean). Short and/or fuckin way. Just enjoying the show. The grand finale will be spectacular.

Tue, 09/18/2012 - 16:33 | 2808406 Winston Churchill
Winston Churchill's picture

But good news is gooderer.

Tue, 09/18/2012 - 15:51 | 2808288 Dr. Engali
Dr. Engali's picture

40 billion a month in flow should help keep a floor under this pig until the elections then th selling will begin as people realize nothing has or will change

Tue, 09/18/2012 - 15:59 | 2808313 lasvegaspersona
lasvegaspersona's picture

unless people (and HFT alike)  realize that 'that's all folks'

Tue, 09/18/2012 - 15:58 | 2808311 kornholio
kornholio's picture


Tue, 09/18/2012 - 16:05 | 2808326 dobermangang
dobermangang's picture

Ipads,  Iphones and guns are selling well.  Lovely charts.

Now if Apple could make a phone or tablet that shoots bullets it could easily go to $1000.00.

Tue, 09/18/2012 - 16:04 | 2808328 Zero Govt
Zero Govt's picture

"...four charts indicating regime shifts in average trade size, index dispersion, high-beta sector convergence, and high-beta financials convergence."

Alas my student days of researching what this gobbledigook means are long gone.. boiling the kettle for another cup of tea has a stronger pull

"Whether these are bullish consolidations, short-coverings, or total capitulations - who knows? "

Well I don't understand the charts and you haven't a clue how to read them, so join me in the corner of the class with a pointy 'D' hat on

"..we suspect (at least for now) that all the good news is out."

Oh good, happy days, back to my cuppa

Tue, 09/18/2012 - 16:04 | 2808329 Temporalist
Temporalist's picture
Jim Rogers Conditions Will Worsen In 2013 & 14

Tue, 09/18/2012 - 16:14 | 2808344 common_sense
common_sense's picture

Really APPLE PHANATICS !!!! Even with stocks!!

Tue, 09/18/2012 - 16:19 | 2808361 Remington IV
Remington IV's picture

buy Swiss Francs !!!

Tue, 09/18/2012 - 17:06 | 2808507 Ratscam
Ratscam's picture

remember what the SNB did 9/6/11?

Tue, 09/18/2012 - 16:20 | 2808365 FubarNation
FubarNation's picture

Defying iGravity

Tue, 09/18/2012 - 16:20 | 2808367 Thought criminal
Thought criminal's picture

Expecting another ramp up after Spain admits it is insolvent and asks for help. Then we will finally be out of all the "good" news for quite some time.

Tue, 09/18/2012 - 16:23 | 2808373 Remington IV
Remington IV's picture

Buy everything

Tue, 09/18/2012 - 16:34 | 2808411 lolmao500
lolmao500's picture

Stock market preparing itself for WW3 :

Pakistan :

- Was Pakistan Behind the Camp Bastion Attack?

Iran :

- U.S. will go to war with Iran in 2013, says ex-U.S. ambassador to Israel

- Former State Dept. Veteran Drops Bombshell: WWIII Starts Sept. 25

- Iran deploys Russian-made submarine in Gulf

Russia :

- Preparing for Another Cuban Missile Crisis

China-Japan :

- Top Chinese general in unusual move tells troops to ready for combat with Japan

India-China :

- In a first, Indian tank brigades to defend China border

Portugal :

- Portugal military warning : stop austerity or else

South Korea-Japan :

- Japan renews provocation over Dokdo


- Department of Homeland Security using drones that look like civil aviation.

NKorea :

- S. Korea develops guided missile targeting N. Korea's underground artillery bases

- N. Korean Leader Signs Operational Attack Plan

- NK Opened Gunport when Fishing Boats Crossed NLL

And they have a nuke ready to test anytime...

Egypt :

- Egypt mulls restarting nuclear program,7340,L-4274721,00.html

Syria :

- Report: Syria tested chemical weapons delivery systems in August

All very bullish. Also...

Elections in Georgia, October 1.

Elections in Ukraine, October 28.

Elections in South Korea, December 19.

Elections in Japan in the coming weeks.

Transfer of power in China in March.

Elections in Israel in the coming months.

Elections in the US on November 6.

And of course Ben printing, the ECB printing, the Japanese central bank printing... the world economy on the verge of collapse, angry people everywhere, DHS buying a shitload of ammo and who knows what else... yeah everything is peachy!

Tue, 09/18/2012 - 16:40 | 2808431 Anglo Hondo
Anglo Hondo's picture

WWIII Starts Sept. 25

Nobody, ever, starts a war on a Tuesday.  Are they nuts?

Tue, 09/18/2012 - 17:22 | 2808554 GernB
GernB's picture

"And of course Ben printing, the ECB printing, the Japanese central bank printing... the world economy on the verge of collapse, angry people everywhere, DHS buying a shitload of ammo and who knows what else... yeah everything is peachy!"

Sure, but we all we agree that the future is totally bullish, right.

Tue, 09/18/2012 - 19:16 | 2808867 Lost Wages
Lost Wages's picture

The Zombie Hologram Market is not amused.

Tue, 09/18/2012 - 19:55 | 2808990 RobinHood73
RobinHood73's picture


I would say objectively, that 60% of the coverage coming out of CNBC is directly about APPLE. It is all too much. It is much like a broken record at this point, all the more painful to hear some pimple-faced dealer clown  talk incessantly about raising their target from 600 to 700 on the deeply intellectual rational that pre-orders totalling a net EBITDA of perhaps 400 Milliom ,or 40 cents per share



Tue, 09/18/2012 - 20:04 | 2809033 adr
adr's picture

For a phone that is supposed to sell 50 million units, I don't see much in the way of retail making way for it. Best Buy hasn't marked down the massive inventory of obsolete accesories yet. Neither has Walmart or Target.

Perhaps they are thinking the iPhone4 will sell more units than the 5 will after the massive price drop.

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