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ES Bounces Off 200DMA And Total Chaotic Disconnect Ensues
As headline-makers from every mainstream media outlet attempt to fit today's spectacle to their cognitive biases, we note the massive surge in volume at the close in ES (the e-mini S&P futures contract). Financials closed at the highs of the day and stocks managed to retrace almost all of yesterday's drop (with seemingly everyone waiting for the ETF-moment at the end to transact?). We noted the disconnect earlier (and potential QE chatter) and while the break between TSYs and the synced USD-down-ES-up was incredible, the 5.5% rally in Silver off its earlier lows was none too shabby as Gold also managed to get back to $1550. Investment Grade credit outperformed high yield and stocks today (not exactly a bullish risk-hungry indication) managing to close tighter than Tuesday's close even as HYG (our trusty high yield bond ETF) shrugged off a little more of its NAV premium and underperformed all afternoon as the equity ebullience struck.
The disconnect continued all afternoon. 10Y TSY yield ended under 1.90% as the dollar sold off (with EURUSD getting back into the green) and stocks at their best levels of the day.
After touching the 200DMA from above yesterday, ES leaked higher overnight - notably back in perfect sync with CONTEXT (our broad risk asset proxy - dark blue in chart). This proxy has seen ES pull higher and then retrace to it over the last two weeks or so but today was different. CONTEXT pushed gently higher all morning until Europe closed and then ES managed to pull up to CONTEXT and traded in sync with risk assets in general all afternoon. This despite the obvious disconnect with TSYs (levels and curves).
HYG was the standout disconnect in the credit space with IG outperforming modestly.
In corporate bonds, we saw short-dated 1-3Y net buying dominating the action as TSY curves flattened significantly (30Y now -16bps from Christmas Eve).
Silver managed a wondrous 5.5% rally off the lows of the day, Oil seems pinned at unch on the week and Gold managed to regain $1550 before closing marginally below it. The rally back in Silver was notable as it reverted the Goild/Silver ratio back to its 'stable' 55x ish level of the last two weeks.
The scale of the moves in DXY are not so clear when judged against the massiv beta of commodities but the bounce-back in FX major vs the USD this afternoon was impressive (though admittedly on low flow). It is notable though that JPY is still the only major to be higher against the USD from the Christmas Eve close. Interesting also that cable (GBPUSD) is the worst performer - disconnecting from EURUSD after the European close today.
Charts: Bloomberg and Capital Context
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no reason to do QE when you can float rumors of QE in a thin holiday market
It has been fun http://www.twitter.com/sellputs .. - can find me here -http://hedge.ly/u4aTU4 . have a good rest of 2011 ZH .
Not only are there no adults remaining in the room, there aren't any HUMANS left in the room.
Just computers doin' their HFT thang!
I bow to our mechanized overlords.
I bought some TBT and gold today
Well, it will bounce even more tonight, through the wee hours, and throughout tomorrow. Why? Why wouldn't they?
silver has potential hammer bottom
buying PSLV and SLW on the open was rewarding
It seems the negative numbers today had no effect on the market. I loved how CNBCialis put the positive spin on unemployment and just fawned over the awesome homes under contract number. I guess in all the excitement they forgot that the NAR basically faked numbers and having a house pending does not mean it will sell in the end. I wonder how much longer propaganda and cheap money can keep the system going?
LOL after listening to 5 mins of chatter i envisioned every supply store and HD and LOW to be cleaned out this weekend and lines at all the new home tracts - get drywall while u can
It's worked since March 2009, nearly three entire years already. So there's that.
I imagine, however, that when propaganda and cheap money no longer keeps the system going, you'll know it.
And it won't be because the S&P dropped 20 handles.
The best scene ever out of Hollywood.
The lies and propaganda will continue until the entire economy collapses.
The funny thing about the recently reported news on home sales being up wasn't as good of news as it normally would have been because home prices were down broadly.
There's a difference between buying a home and buying a home on fire. Many who bought homes last year are already underwater.
Now you take into account that the Japanese are in big trouble with debt being @ 200% of GDP. Their most liquid assets (USTs) aren't yielding shit and when you factor inflation in the energy sector their investment are yielding 0% and in some cases -%s. So let's assume the Japanese sell USTs even if marginally (they are the third largest behind the FED and China) Who is going to be the buyer? Probably the FED but they're gona' have to expand their balance sheet massively which will by extension cause more inflation in the energy sector. So let's assume the FED loses it's carte blanche control over the Treasury curve and rates start going up. Every crisis needs a catalyst and I am of the persuasion that potential selling of USTs by the Japs will cause a bond market conflagration.
I started taking small positions in TBT and Gold today. I'm not calling a bottom by any means but I feel good phasing into this trade. Any material vol in the T market will materialize noticably in April in my opinion. I have done a far more extensive analysis on this, I'm just too lazy to write it all up right now.
"I wonder how much longer propaganda and cheap money can keep the system going?"
Apparantly for quite some time. I first heard that the banksters were going to crash everything NOW in 2003.
How long will it keep going? Hard to say...but the salient point is...it does not matter because the market is dead. Just check the previous ZH post on eveyone and his cousin dumping obviously manipulated equities.
Without capital formation, it has no choice to to collapse...either from deflation or hyper inflation. No two bones about it.
Bro these guys are a total spin machine, Don't you wish they would at least let sombody get some real fair air time on there, like William Black. Mr Stockman. Nasam Taleb. And if these guys are on there they should at least let them have some real time,, I know those guys read the Hedge, but will never ever give the Hedge the credit for talking about all these things days before it happens.
I would like them to at least have a phone interview with Tyler, Everybody knows who Tyler is it would make there ratings go up for sure on that day anyway Or my total dream is to have Tyler on the Larry Kudlow show.. tell me that would not be epic... Young and Old go to the Hedge for real info, Its a shame that CNBC and Fox news are so Bias just to keep the status Quo going and going,, For myself I have the Hedge and The Oil drum on my desk top, I can't Imagine what my life would be like without them for real Info,
100%Sk8Boarderforlife
Happened by CBS Evening News last night by mistake as that little Obama toad Harry Smith told me the stock market went up on Thursday because of the"improvement in unemployment". Speechlessness overcame me!!
alas, as usual I wanted to purchase a bit of invesre fund again at the close. if the pattern fits, the gap up with the rramp until the close is an excuse for europe to see into strength again. I always know to close to sell some short at the close of a long down day like yesterday. we almost never have two down days any more. instead it got closed out with my emerging markets short. No so bad I got some profit there, and did sell some of what I bought at the close yesterday. we shall see. I think there is a good chance of a big gap down tomm, although friday they don't like to do that. we shall see.
the 5.5% rally in Silver off its earlier lows was none too shabby
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There must have been a trade that went through.. The spread on minisilver has been 4 to 5 % every time I looked this week.
Comex is dead. Why is this not a headline story?
Because the Comex isn't dead.
The cheapest way to buy any commodity, to include gold and silver, is to buy the future contract (paper) and accept delivery from a comex warehouse. By buying this way you essentially are buying @ spot instead of going to a dealer who is going to charge you 3-6% premium over spot.
There are a lot of "expert" PM traders posting around ZH who haven't figured this out.
Yes, but if you buy through the comex, the Fed is up your ass 6 ways from Sunday - Buy from a discrete dealer & there's no trail...& 3% don't mean shit in this market...esp. if you consider the down side of the Fed knowing all of your PM holdings.
I couldn't give two shits if the FED is up my ass 7 ways from Monday.
What are they gona' do? I gave it away to homeless people as a form of charity. I'm very charitable.
Now now, Bob...the FED up your ass 7 ways should cause you at least some concern...if not outright discomfort.
The FED has been balls deep in all of our asses for sometime now. Our shit holes are like rubber bands at this point.
"I gave it away to homeless people"
I went on a boating trip with Trav7777 and a gang of fucking Somali pirates hijacked our vessel and stoled our goaled.
Is there an IRS form for that?
sure! just go w/ the 1040 and the SE
make up anything ya want; just like da big boyz...
...trust me
"What are they gona' do?"
You can tell them whatever story you like when they show up at your door with a legally armed and warranted crew to TAKE your gold. Do you think they will compensate you for smashing your home apart, terrorizing your family & making you a pariah in the neighborhood?
My point is, in a market that swings 5-10% monthly (or weekly) WFT is the point of trying to save 3% and give the Fed a documented excuse?
L0L!!!
not as many as there are ignorant trolls who still don't differentiate between PM traders & PM owners
even the ignorant may soon start to notice the already-published trend away from the crimex banksters toward producers and non-"exchange" brokers since the crimex failed to do its job properly in october
Ummm...also...silver did not even come close to yesterday's opening prices. So while it is a nice bounce...I'm not sure I understand what news flash you would be looking for here.
This way you can never win. Forget technicals and economic law. It's simply manipulation. Get over it. Big money is in control of everyting. Become a servant of Big Money and they will let you make some Dollars.
Yep, but dollars ain't gonna get that taste out of your mouth!
pods
prelude to 2012 volatility. This market is going no where fast. Spreads are to tight for equities...who knows what Friday brings. But I bet a bull trap.
HFTs are playing end year and any momos that threw some volume in...no Vaseline.
Oh and then there is Asia, sets a bear trend before EZ/US markets open.
payback
SALES RISE: The number of Americans who signed contracts to buy homes in November rose more than 7 percent to the highest level in a year and a half, the National Association of Realtors said Thursday.
HEALTHY LEVEL: A reading of 100 is considered healthy. November's 100.1 index was the first time it hit that threshold since a federal home-buying tax credit expired in April 2010.
QuantFuker Housing prediction 2012: bullish.
...................NRA is lobbying business. You're either from NRA or totally uninformed.
NRA Yes I am! You should be too.
L_OL_MFA0!
It was a HFT inspired meltup, no one is around! Market is confused and broken, nothing to do with QE3 rumors. The Fed is printing like made anyway
refer from wires:
"The Italian situation is untenable," said Mark Grant at Southwest Securities, in a note to clients Thursday. With bond yields lodged near 7%, Thursday's auction "is one more indication that Italy will soon be paying a visit to the IMF and asking for help."
to this:
"The 1.0%-plus rise on Wall Street suggests that investors will remain in short-covering mode for year-end and there was talk on Wall Street there will be another round of short-covering in the beaten down US banking sector when the market opens the last trading day of 2011"
= confused.
Asia sells next few hrs.
I think, as with Lehman, there's a plan to crush one or two guys (check all "preparation" plans UK and Germany are having), but they've been postponing it since they haven't felt they're ready. No wonder they call each european meeting as the last one. I think it's coming in the next 6-8 weeks. At least one big guy goes by plan.
I'm not sure it's going to be that long. There are rumors wirling around in southern Greece that banks are taking delivery of new currency (Drachs). People who were at the bank (withdrawing everything) today swear up and down that they've seen new currency. Personally, I don't buy it but it would be ineresting if plans are to start the new year fresh.
cause Asia sells on China's hardlanding, bless them:
Deadcat bounce in gold and silver - back up the truck for high-quality stocks or the E/S and you will be smilin'...
hahahahaha EUR bulls trying to hit 1.30
f*cking US home sales...WTF! Please half of China is buying up US property. Hedge fund bets are on this. Cept, China is about to crumble.
and then there is Greece invertible encounter with a boot in it's a-hole outta of the EU
"A 50% haircut may no longer be enough" to bring Greece's debt to sustainable levels given the new IMF economic forecasts, said one of the officials."
All your haircuts are belong to us.
ALL HAIL ZOG, THE HFT OVERLORD.
200 DMA for a contract that expires every 3 months? Someone will have to explain that one to me.