Is The 'Counter' Trade On?

Tyler Durden's picture


Regimes are shifting. Can you feel it? While at the surface, indices tumble along in small ranges and AAPL does its thing, asset-class movements and sector-rotations suggest something is afoot. Since the peak in the S&P 500 last week, we have seen a clear rotation from cyclicals to non-cyclicals, a major rotation from stocks into bonds, and a significant regime change in the relationship between Gold, the USD, and Treasury prices. One thing is clear - the heads-I-win, tails-you-lose high-beta strategy (on the ECB/Fed 'has your back' thesis) appears to be weakening a little (though in 100 milliseconds from now - who knows?)


Since last week's S&P 500 highs, Healthcare is outperforming; Industrials and Materials are underperforming...(among others)...


Treasuries have rallied (yields have fallen) and the USD weakened (though not in a QE-anticipatory way given the above sector rotations)...


as perhaps the strength in Gold is evidence of a rotation from Fiat... (as guessing who moves first in the Draghi-Bernanke game of chicken has become too 'risky')



Charts: Bloomberg

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Tue, 08/28/2012 - 14:33 | 2744306 Jlmadyson
Jlmadyson's picture

The I could knock this market over with a stiff breeze trade is on.

Tue, 08/28/2012 - 14:57 | 2744372 Michael
Tue, 08/28/2012 - 15:19 | 2744432 TheSilverJournal
TheSilverJournal's picture

Are we beginning to depart from Bizarro World?

Tue, 08/28/2012 - 16:20 | 2744552 3rdgrader
3rdgrader's picture

Ben will print. With our war machine in full force in over 150 countries overseas, the big boyz will not wait for their paycheck. They get impatient, those target coordinates can be readjusted in microseconds. I don't think Ben wants to be in the crosshairs...

Tue, 08/28/2012 - 17:53 | 2744723 Overflow-admin
Overflow-admin's picture

Lets warm up the High Frequency Printing Press!

Tue, 08/28/2012 - 15:31 | 2744464 God Bless The V...
God Bless The Virtuous's picture

Or a wet fart out of Bubble Blowin' Ben and his QE stun gun!

Tue, 08/28/2012 - 14:37 | 2744315 Hype Alert
Hype Alert's picture

DOW transports still trending down.

Tue, 08/28/2012 - 14:37 | 2744316 Deep79
Deep79's picture




Tue, 08/28/2012 - 14:41 | 2744331 Jlmadyson
Jlmadyson's picture

Hard to break the habit much like heroine.

Everyone is hooked my friend.

Crack-smoking addicted market-Stephen S Roach

Tue, 08/28/2012 - 15:06 | 2744399 gunsmoke011
gunsmoke011's picture

Agree - the fate of the entire planet revolves on whether some unelected, accountable to no one Central Banker is going to say next! Between that and the Robots trading back and forth with each other for fractions of a penny - this market has become a pathetic waste of time.

Tue, 08/28/2012 - 15:09 | 2744409 Xibalba
Xibalba's picture

Ahhh....Breath in the fresh smell of Fascism. 

Tue, 08/28/2012 - 14:41 | 2744329 fonzannoon
fonzannoon's picture

The dollar is week and the euro is strong because supposedly everyone knows Ben is not going to print and Draghi is going to print big time. Makes total anus.

Tue, 08/28/2012 - 14:45 | 2744342 Jlmadyson
Jlmadyson's picture

That is the best part. It's like it all went up on Stopler, but much like anything Stopler it all falls back to reallity shortly.

Tue, 08/28/2012 - 18:08 | 2744753 stocktivity
stocktivity's picture

the dollar is weak this week.

Tue, 08/28/2012 - 14:41 | 2744330 LongSoupLine
LongSoupLine's picture

sure, but what is Gary Goldberg doing?

Tue, 08/28/2012 - 14:50 | 2744352 oklaboy
oklaboy's picture

not to be off topic, but...



Tue, 08/28/2012 - 14:53 | 2744365 kevinearick
kevinearick's picture

what happened in august you say?


a ca jury of peers cut its own throat;

the fed, having already given up on vacant homes gave up on vacant rentals, to maintain credit for Apple;

china is broke;

blah, blah, blah

not much.


ownership merely fosters a false sense of security, which must be subsidized by ever greater exploitation, in a positive feedback loop. if you are going to assume that you cannot make an impact as an individual, that the borg is all powerful, you may as well put a bullet in your head and avoid all the misery seeking corporation.

capital, middle class, and labor all exist for good reason, but if the system is relatively inert like the one before you, the best possible outcome is swapping chairs on a sinking ship, while the explicit democracy grows into inertia, and the implicit democracy is building life boats…which get replicated, modified, blah, blah, blah.


welcome to the machine…new empire same as the old.


the imperial leaders argue over who will supervise the work while all those individuals capable of repairing the hole when it was small, who were denied access by the mob awaiting consensus from above, build lifeboats out of whatever material is available. upon sight of the lifeboats on the horizon, the leaders order cannon fire, and the mob dutifully obeys out of habit, at which point the leaders resume deliberation, out of habit. the hole grows bigger at an accelerating rate and the mob starts throwing itself overboard.


Did I miss something consequential? Housing is following the census in its draft. Don’t get sucked in as a derivative economic activity.

Tue, 08/28/2012 - 14:59 | 2744383 Brazillionaire
Brazillionaire's picture

I bought VXX a few weeks ago and am still holding on. That may be the last time I bet on reality going mainstream. What was I thinking? Hard to get out of trade when you know you're right, but you're wrong because nobody thinks you're right. This fails to not suck.

Tue, 08/28/2012 - 15:37 | 2744477 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"The market can remain irrational longer than you can remain solvent."  Unkkk...



Tue, 08/28/2012 - 16:27 | 2744564 XenOrbitalEnginE
XenOrbitalEnginE's picture

XOE is watching (and these are real!) the VXX, the XIV, the VIIZ, and XXV.    I'm being careful to not bet on all of these at once, I might break some mechanical scheme-plotters out there.   But hey!  the XIV is YTD up 72.81%  (But hey? it's down in "1 year return" by minus 38.49 percent?!)   Well, yeah, but the VXX is half next month's VIX and half the following month (.../eerie sound/  which is NoVembEr..../eerie off).   So the highest volume of the volume-tracker bet is VIX at 25.5 million trades today!  Yet stuff that is the same but at different multiples like -1.0 or -2.0 or positive x2 are traded thinly.  Or basically not at all.   I could corner (or bust) the market on some MARGIN bought piles of fresh, steaming VXXZ.


Or, or, something, what?


When Texas creates a planned riot at the Repub strip-club convention, maybe VXX will blottom out at like 5 and I can later swap it for gold!  Whups, mentioned Ron Paul (gold & texas = R.P.)

Cheerio!   XOE

Tue, 08/28/2012 - 17:34 | 2744687 Panafrican Funk...
Panafrican Funktron Robot's picture

Short VXX

Long VXZ

Pretty hard to fuck it up.  May result in occassional heartburn, but long term is a no brainer.

Tue, 08/28/2012 - 15:20 | 2744434 ebear
ebear's picture

In the short run, we're all dead.

Wed, 08/29/2012 - 02:58 | 2745789 chump666
chump666's picture


Tue, 08/28/2012 - 15:27 | 2744455 orangegeek
orangegeek's picture

Dow hourly broke channel yesterday, but it looks like more sideways action....which could mean another move up late this week or next week.  Insane.

Tue, 08/28/2012 - 15:30 | 2744461 Meesohaawnee
Meesohaawnee's picture

wonder if there will be lowest volume in how long???

Tue, 08/28/2012 - 15:42 | 2744493 Jaman
Jaman's picture

someone big buying SPX 1385 Puts last two days (the quarterly 9/28 exp)...  36,000 to be exact-ish

Tue, 08/28/2012 - 15:49 | 2744518 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The day trader spoke with his last living breath, "King....dorrah...."

Tue, 08/28/2012 - 16:45 | 2744590 Tombstone
Tombstone's picture

The trading computers are having wet dreams about Benny and his QE's.

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