EUR Shorts Flee The Overcrowded Burning Theater In Disorderly, Multiple-File Exodus

Tyler Durden's picture

Three weeks ago we pointed out that the massive rout in the EUR is approaching its end courtesy of a huge aggregation of net short positions, leading us to conclude it was massively oversold, if only on a short-term technical basis. Since then, continued lack of organization, and a reliance on hope, and lies out of Europe, continues to pummel the EUR, and to bring ever more shorts into a trade that is now ridiculously overcrowded. Sure enough, today, with its 300+ pip move higher in the EURUSD, may be the day when the shorting has finally snapped. As can be seen on the chart below, the divergence between net non-commercial bias in the EUR and the USD has reached historic proportions. And as often happens in markets, this kind of rapid disconnect never works out too well. Expect to see even more compression in the net spread between EUR bearishness and USD bullishness, regardless of newsflow, as the vicious cycle of specs piling on other specs has now been snapped, and the short covering rally has taken on a life of its own, at least until the next mega failure in Europe materializes within a few days.

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Debtless's picture

Wasn't the NYSE supposed to hacked today?

LookingWithAmazement's picture

Yes. But of course this "obstacle" has faded. No collapse ...

Debtless's picture

SheepDogOne on another thread says it's tomorrow at 3:15. Oh well.

SheepDog-One's picture

DAMN! I told you FOUR times this morning I ran links a WEEK ago here proving it was fake! Do you EVER read any replies to your posts?? Is this ALL youre going to post about today on every article here? Damn! SHUT UP!

Besides it was for TOMORROW not today brainiac!

Debtless's picture

Who are you talking to FOUR times? I asked twice, two minutes ago. You answered, i posted. WTF?

Tijuana Donkey Show's picture

It was! It's up 2.5% on bullshit, that's the only answer..... hackers hijacked the PPT! They are pre-preventing a plunge, per their mandate.

covert's picture

people with that knowledge are smart enough not to act against their own interests.


fbrothers's picture

I thought it was always "hacked".

SheepDog-One's picture

OK so where will they go, long dollar now so we can expect the DOW to close down -400 then?

dracos_ghost's picture

Or the Euro goes to 2.0 and the last of the lemmings tumble over the equities cliff. At least the SPX will hit 1260 and create a return of 0% for 401(k)s for the year(excluding hidden fees of course). Yippie.

I wonder if these f'ers will cuddle after the violent molestation the average investor took this year.


SheepDog-One's picture

Best case scenario, I dont see it getting over 1195 myself, in particular now that the dollar is about to get repumped. Top of the band is about here now.

Snidley Whipsnae's picture

Helter Skelter... The lemmings rush from one colored fiat to another... rines repeat... The clever lemmings that have been born to, begged, borrowed and/or stolen to reach the pinnacle from which they receive advance info skim from the vast herd of lemmings below that are turning, syncronized like a school of sardines fleeing from predators... which, in effect, they are.

It's like sitting down to a movie only to realize that I have seen it before... not too bad if I don't remember the ending...but I do...lemmings get skimmed.


GeneMarchbanks's picture

Whack-a-Mole now turns attention to the USD. Expect stories about muni defaults, California, deficit problems, BAC.

The news out of Europe will be faded. The media turns its focus on US economic 'imbalances'.

slaughterer's picture

ES can not, will not break above 1194--this is the top of its trading range.   With the short squeeze over in the EUR, the new spec longs in the USD will sabotage this hot air rally. 

GeneMarchbanks's picture

Dude, the hot air rally started in April... 2009.

SheepDog-One's picture

Yea equities caught a nice EZ tailwind this morning with the dollar -1.3%, lets see how long they can keep that aloft for now with everyone piling in long the dollar.

Mr Lennon Hendrix's picture

As long as the dollar sucks ass, which is indefinitely.

SheepDog-One's picture

Well the dollar, along with all the other currencies, suck ass. But here come the dollar bulls. Bye bye equities rally.

Mr Lennon Hendrix's picture

Here come the dollar bulls?  Armed with what, paper swords? LOL

Mr Lennon Hendrix's picture

Let's all get on one side of the boat, just to see what will happen. 

entendance's picture

Financial Giants Put New York City Cops On Their Payroll
...When the infamously mismanaged Wall Street firm, Lehman Brothers, collapsed on September 15, 2008, its bankruptcy filings in 2009 showed it owed money to 21 members of the NYPD’s Paid Detail Unit. (A phone call and email request to the NYPD for information on which Wall Street firms participate in the program were not responded to. The police unions appear to have only scant information about the program.)

Other Wall Street firms that are known to have used the Paid Detail include Goldman Sachs, the World Financial Center complex which houses financial firms, and the New York Stock Exchange...

dasein211's picture

Patience. Nobody is talking about dexias shadow derivatives market. Its what you dont see in the darkness of th water that gets you.

DormRoom's picture

casino capitalism. fuck..

ZeroPoint's picture

How long do you think bailout whiplash can go on before someone powerful gets completely pissed off and lets the fucking thing crash? To the escape helicopters.....




SheepDog-One's picture

Not very long, this is just total acts of desperation now. Too bad we have such a whore media that only cares about money and the whiff of fresh new money sends them into euphoric hysteria...but it wont last long probably not even until close today.

Mr Lennon Hendrix's picture

Not unless Bernanke can get in his helicopter first.

Welcome to Thunderdome, bitchez!

BlueTrin's picture

Where can you find the date which is in the graph (divergence between net non-commercial bias in the EUR and the USD) ?

Mr Lennon Hendrix's picture

King Rahrah!  KIIING RAHRAH!!!!!!


The squueze is on

on the street

They make you think short

As the rug is pulled from under your feet.

Wash, rinse, and repeat.

SheepDog-One's picture

Then this morning they make you think 'I'll go long now' while the dollar longs pile in wiping it all out.

Joe Sixpack's picture

They are all escaping to the ultimate currency (gold).

Pretorian's picture

ECB TRICHET: Our balance sheet  haven not grown even close as  the FED 1 did.

Lady Heather...UNCLE's picture

Just read that Counterpunch link :

(Thank you entendance) guys are SO fucked. The fourth Reich is alive and well in the land of the free.

I am so sad...and so fucking angry!!

And I live in New Zealand (thank God my parents emigrated here in the 60's)

Lady Heather...UNCLE's picture

...oh yeah, nearly forgot


falak pema's picture

watch out the wallabies are hungry...

but the real thrilla will be Wales-France...leeks and garlic!

msmith's picture

The EURUSD rally should begin to run out of steam as the EURUSD enters overbought territory and the USD Index should be well supported just below current levels.

qussl3's picture

Feels like a BS short squeeze, a real move would be led by the PMs.

Dollar rally may still have some legs yet.


Fuh Querada's picture

Go short EURUSD at 1.3822. Target 1.3798. Stop at 1.3893. Use 10000000000 to 1 leverage.

LookingWithAmazement's picture

The nucleair option by buying out Italy and Spain, will SAVE the euro: a massive rally and a PM-dump wil follow. No hyperinflation, no flight into the safety of the PMs. See Dexia: saved + rally. Forget contagion, or: other banks will be saved too. And of course the ECB will go nucleair, politicians see no other choice. So: euro saved, stocks up, PMs down, housing up - go for a new boom(-bust cycle). No Armageddon. Merry Christmas. Boring world we live in.

treemagnet's picture

There will come a day when all the false hope and reassurances provided by any govt only propel the opposite of what these shepherds have come to know and understand.  Prepare - use this time wisely.  But yeah, its pretty damn frustrating for sure.

johnjb32's picture

When all else fails, just overthrow any government that stands in the way. The agenda to tie all of Europe up in a straight jacket of debt is a juggernaut that is so brazen and heavy-handed as to be an order of magnitude greater than anything I've witnessed or documented in a long career. Greece is a rotting corpse in a new business suit in the store window of Europe and yet the financial powers that be, drag countries into the store for their personal "fittings". Somehow, the plan to tie, seemingly the whole world, into a big bundle by mid-November seems to be proceeding on schedule. It does so in defiance of all the good reporting we've brought you here from many sources indicating that it was impossible. What we do know is that the EFSF will fail. What we do know is that growth will never repay the debt that gets piled on deeper and deeper. I never thought it possible for the EU to reach mid-November but now that's less than five weeks away. And that's when all of the U.S. manifold issues (dare I say it?) converge. -- Michael C. Ruppert