Even JP Morgan Is Staying Out Of This "Frightening, 10 Sigma" Market

Tyler Durden's picture

A note by JP Morgan released today contains the following gem: "The quite frankly frightening volatility in the Italian bond market this week together with the rapid pace of political developments (nascent new governments in Greece and Italy) confirms not only a new, more extreme phase in the European crisis, one in which the very irrevocability of the euro is now up for discussion, but also the disconnect that now exists with the currency markets. Yes EUR/USD dropped but the worst daily decline was a 3-sigma move compared to the 10 sigma surge in BTP yields Wednesday followed by the 6-sigma drop today. European developments are not only dominating all other idiosyncratic fundamentals in the currency markets and leading to an extreme lack of differentiation in currency performance (chart 1), they are  generating volatility without meaningful or tradable direction. We have steered clear of any substantive cash positions in recent weeks and make no excuses for staying sidelined, especially as liquidity is likely to tail-off quicker into this year-end period than is normal in view of the degree of frustration many investors fell with their performance and the market’s volatility." So, aside from all the rearview mirror pros on twitter and various chatboards, if even JPM is staying out of this sad yoyo excuse for a market who is actually trading?

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centerline's picture

Is this a rhetorical question?  I am confused.

Ahmeexnal's picture

German nuclear powerplant meltdown the real reason Merkel "suddenly went 180 degrees" and called for a nuclear free Germany?




The United Nations nuclear agency is reporting higher than normal radiation levels in the Czech Republic and elsewhere in Europe, but states the increase is not a public health risk. The International Atomic Energy Agency says that “very low levels” of iodine-131 have been measured in the atmosphere.

The IAEA does not know the source of the radiation, but says it is not related to Japan’s Fukushima Daiichi nuclear disaster, which spread radiation around the world in March.


Stick a fork on that eurozone, it's nooooked!

mick_richfield's picture

Is this a rhetorical question?

Are rhetorical questions really so bad?

justanothernerd's picture

It's an HFT vs HFT front running fight to the finish. May the best algos win!

Delmar's picture


Didn't take too long for CFO to catch on to what ZH has been reporting the better of two years...

DormRoom's picture

you can not have price stability without investment flow stability. frequetn > 3 Sigma movements in the investment world encourages more savings, less consumption, and investments, as liquidity preferences converge to cash to stay agile.


So the Central Banks in their intervenionist, ad-hoc market moves, are causing investment flow instability, which will will lead to price instability in the medium term.  Which is against their mandate.


Trading short term stability, for medium-long run chaos is not an economical solution. .



YesWeKahn's picture

"who is actually trading?"


US robotics of federal reserve.

The Limerick King's picture



With Klepto survival the stakes

And global finance with the shakes

What length will they go

To maintain status-quo?

Quite frankly - Whatever It Takes!!!!!

geekgrrl's picture

Kudos! That is an amazingly succinct description of what's really going on.

rocker's picture

I disagree. I have put on small positions twice and the HFT's went to work with no hesitation. Like a blood hound

chasing a rabbit. They attacked what was a base in a stock and dropped it.

If it was the FED they would not attack. They would want traders to buy something.

Especially retail. The thirst is for anybody's money. Whoever the sucker would be.

Look at the blow ups. This is not the FED. It is the thieves who control the market.

Like the Banksters, HFTs or Institutions of TPTB who manipulate all.

The good thing is. Their responce verifies that there is much more supply of equities than buyers.

Look out below. The trigger is pulled. Now we just need them to shoot it down. Only they know when!!!

common_sense's picture







StychoKiller's picture

That would be "not me" and "Ida Know!"  :>D

rambler6421's picture

Plunge Protection Team.

ArkansasAngie's picture

It has to be.

The problem is that pension funds and such are still in this market.

My problem all along with Armageddon bets has been when it happens just who is going to have money to pay off their debt to you.

Out this market and glad.

count_de_monee's picture

This seems like a pretty good place to start shorting. I like the risk/reward at these levels and I agree with my friend Peter's post that we've seen the market top. I don't think we can break through the 200 DMA again although we're pretty close.


The Count's picture

do you really think you can make money shorting 'anything' right now? do you also think you can stop a freight train just because it is on the wrong track?



Chip's picture

Agree--it's the directionless nature of the current market that makes it impossible to trade in either direction, not to mention the plethora of ETFs (seems like a couple hundred new ones roll out each week) which have made single stock selection a worthless skill except for insiders. 

rocker's picture

@ count_de_monee   Seems like is not a good idea. Wait for conformation.  The trigger. 

TrafficNotHere's picture

Been thinking of entering FAZ if it goes down just a bit more. This isnt a buy and hold, more of a short term (less then two weeks) trade.

101 years and counting's picture

getco is now the buyer and seller of every trade in the ultimate liquidity provider scam. 

centerline's picture

"ultimate volume provider"


Fixed it.  LOL.

slaughterer's picture

I thought JPM traders had balls.  Guess I stand corrected.  

midgetrannyporn's picture

Italy bonds aren't even that cheap. I'd buy Greece before Italy at today's prices.

Belarus's picture

Ah....the traders are getting mauled: true. But the buy and holders in the vanguard balanced index are having a perfectly good year. So, no one is trading the market, and if they are they are losing money, but the investors have done fine so far this year.....

And the market is discounting the mother of all inflation that will be forthcoming. Once again, like him or hate hime for the pimp that he is, Buffett is kicking ASS as he buys every major market blow out and is killing it this year. 

jdelano's picture

Have you gone full retard rus?  Buffet is kicking ass?     

Belarus's picture

Ummmn....yes full retard. yes. But to answer your question I'm just calling it the way I see it (I'm not advocationg the old bastard for god sakes). Buffett was buying

Mastercard at 280. Dollar General at 30. 7 billion in other equities at the end of Sept., etc. 

So, yes, he is kicking ass. If my observaton makes me "full retard" then, okay. I'd agree. Yes, I've gone full retard. 

fizz's picture

Warren "king of crony capitalism" Buffett? Give me a fucking break. If you and I had a direct connect to .gov and the bernank, we too would be killing it. It's alot easier when you know what TPTB are going to do before it happens. That guy is just an extension of .gov plain & simple.

espirit's picture

Don't forget BAC.  I'm sure Buffoon would probably be paid first, but...

what a dog!

mhoughgr's picture

never go full retard ...

Mary Wilbur's picture

@jdelano  Buffet is an ass.

homersimpson's picture


"But the buy and holders in the vanguard balanced index are having a perfectly good year." - um.. VBINX is only up 2.76% as of yesterday. Not exactly a perfectly good year.

Meanwhile, "Buffett is kicking ASS as he buys every major market blow out and is killing it this year." Huh? Um.. you might want to check the chart for BRK-A for this year. Meanwhile, how's his BAC investment doing? If I'm not mistaken, he's still underwater.

In other words, you have too much man-crush on Buffett.. and are over-exaggerating returns on VBINX.

Belarus's picture

3% is a great return compared to the vast majority of the 2 and 20 crowd this year. That's my only point. I'm long term silver bull though.....

And that's what my money is on  for the long term. it's funny how the ZH crowd hates general observations. I'm a ZH'er folks. Love it here. 

But I do like to test the testy waters here. It's fight club afaterall. And I'm a fighter. 

SheepDog-One's picture

Pretty pathetic to me, considering my CD account a few years ago used to pay 3.5.

I guess if I price other 'investments' Im up way over market average, my AR15's most of those I bought for about $800 years ago, they easily cost double that now.

And damn ammo OMFG 500 round cases I was buying 5 years ago for $120 now go for $350. So theres that.

CvlDobd's picture

What do the CDs pay today?

More people need to call you out as much as you shit talk others. Where is that dirty bomb attack on NYC you were calling for?

Belarus is on the money. Hedges and traders have gotten kicked in the teeth this year. Yes, yes there are some exceptions but the balanced fund he mentions has done ok especially for the price.

Another balanced fund is ABRYX. Most people here probably couldn't beat that return this year. If they are honest anyway

SheepDog-One's picture

LMAO if youre saying 3% gain 'investing' is pretty good compared to a certified deposit interest, then I totaly make my case, again. Move along clown. 

BTW, 'I called for a 'dirty bomb attack on NYC' WTF?

CvlDobd's picture

If it wasn't you then I apologize but I'm pretty sure you were the one lambasting the bulls for going long when Glenn Beck was calling for a dirty bomb attack on the OWS peeps.

When CDs are near zero I do consider 3% good.

Again. If I confused you with someone else I apologize.

SheepDog-One's picture

Now I did say yesterday I did say 'Wouldnt it be great to show up to some Best Buy on Black Friday and machine gun a few hundred of em'! Interesting news coverage anyway and might put a damper on the consumerfest reporting for a year.

SheepDog-One's picture

Well yea, if CD's are near 0%, then 3% is 'kinda good'....point is a few years ago that 3% CD return was considered booooooooring.

Belarus's picture

Dude, I can buy AR15's for under 1,000 today. 

DormRoom's picture

If your'e still in the market, you're a long tail event away from destitution.  And if you think a long tail risk is unlikely in a market where > sigma 3 moves, and central bank intervention, are frequent, you deserve what's coming to you. 


pennies in front of steamroller



kito's picture

isnt this where the contrarian view comes into play? everybody staying out, we should be jumping in? 

homersimpson's picture

Ooh ooh ooh I am! I love FAZ! I love the fact that FAZ capitalizes off of crappy economic policies and gutless politicians.

kito's picture

im getting DOGged by this rising market, but i bought more today. when is this gonna get real???????????????

SheepDog-One's picture

Who is actually trading? Robotarder with his Fantasy Stock League lineup du jour.

The trend is your friend's picture

the last 30 minutes will be a good clue when they have to turn the machines off for the weekend.  If JPM is confused on what to do I'm sure not many trading firms will keep open positions over the weekend

marcusfenix's picture

skynet is making trades with the matrix...

trampstamp's picture

I'm moving the market. There i said it!