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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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Fri, 11/11/2011 - 15:55 | 1870705 centerline
centerline's picture

Is this a rhetorical question?  I am confused.

Fri, 11/11/2011 - 16:30 | 1870802 Ahmeexnal
Ahmeexnal's picture

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

http://www.prisonplanet.com/united-nations-agency-downplays-increased-ra...

 

 

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!

Sat, 11/12/2011 - 07:05 | 1871885 mick_richfield
mick_richfield's picture

Is this a rhetorical question?

Are rhetorical questions really so bad?

Fri, 11/11/2011 - 15:55 | 1870706 justanothernerd
justanothernerd's picture

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

Fri, 11/11/2011 - 21:27 | 1871389 dbells32
dbells32's picture

Spot on

 

Fri, 11/11/2011 - 23:46 | 1871584 Delmar
Delmar's picture

http://www.cfo.com/article.cfm/14604291?f=cfoinside

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

Fri, 11/11/2011 - 16:09 | 1870707 DormRoom
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. .

 

#occupywallstreet.

Fri, 11/11/2011 - 15:57 | 1870712 YesWeKahn
YesWeKahn's picture

"who is actually trading?"

 

US robotics of federal reserve.

Fri, 11/11/2011 - 16:18 | 1870765 The Limerick King
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!!!!!

Sat, 11/12/2011 - 00:01 | 1871604 geekgrrl
geekgrrl's picture

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

Sat, 11/12/2011 - 02:58 | 1871774 rocker
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!!!

Fri, 11/11/2011 - 18:28 | 1871115 common_sense
common_sense's picture

So: BEN, TIM AND SUPER-MARIO... TWO PLAYERS AND ONE VIDEO-GAME... VERY SOON GAME OVER...

 

INSERT COIN

INSERT COIN

INSERT COIN

...

Fri, 11/11/2011 - 23:02 | 1871523 StychoKiller
StychoKiller's picture

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

Fri, 11/11/2011 - 15:58 | 1870716 rambler6421
rambler6421's picture

Plunge Protection Team.

Fri, 11/11/2011 - 16:36 | 1870820 ArkansasAngie
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.

Fri, 11/11/2011 - 16:01 | 1870724 count_de_monee
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.

http://real-economik.blogspot.com/2011/11/have-markets-topped.html

Fri, 11/11/2011 - 17:33 | 1870985 The Count
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?

 

 

Fri, 11/11/2011 - 21:09 | 1871367 Chip
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. 

Sat, 11/12/2011 - 03:03 | 1871779 rocker
rocker's picture

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

Sat, 11/12/2011 - 17:08 | 1872457 TrafficNotHere
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.

Fri, 11/11/2011 - 16:03 | 1870728 CvlDobd
CvlDobd's picture

My mom

Fri, 11/11/2011 - 16:06 | 1870731 101 years and c...
101 years and counting's picture

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

Fri, 11/11/2011 - 16:13 | 1870766 centerline
centerline's picture

"ultimate volume provider"

 

Fixed it.  LOL.

Fri, 11/11/2011 - 16:08 | 1870742 slaughterer
slaughterer's picture

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

Fri, 11/11/2011 - 16:09 | 1870744 midgetrannyporn
midgetrannyporn's picture

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

Fri, 11/11/2011 - 16:09 | 1870746 Belarus
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. 

Fri, 11/11/2011 - 16:14 | 1870768 jdelano
jdelano's picture

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

Fri, 11/11/2011 - 16:19 | 1870780 Belarus
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. 

Fri, 11/11/2011 - 16:35 | 1870816 fizz
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.

Fri, 11/11/2011 - 17:46 | 1871018 espirit
espirit's picture

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

what a dog!

Fri, 11/11/2011 - 19:12 | 1871207 mhoughgr
mhoughgr's picture

never go full retard ...

Fri, 11/11/2011 - 17:10 | 1870919 Mary Wilbur
Mary Wilbur's picture

@jdelano  Buffet is an ass.

Fri, 11/11/2011 - 16:16 | 1870772 homersimpson
homersimpson's picture

Huh?

"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.

Fri, 11/11/2011 - 16:24 | 1870792 Belarus
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. 

Fri, 11/11/2011 - 16:32 | 1870799 SheepDog-One
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.

Fri, 11/11/2011 - 16:37 | 1870819 CvlDobd
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

Fri, 11/11/2011 - 16:49 | 1870855 SheepDog-One
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?

Fri, 11/11/2011 - 16:57 | 1870885 CvlDobd
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.

Fri, 11/11/2011 - 17:01 | 1870893 SheepDog-One
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.

Fri, 11/11/2011 - 17:02 | 1870895 SheepDog-One
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.

Fri, 11/11/2011 - 17:09 | 1870917 Belarus
Belarus's picture

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

Fri, 11/11/2011 - 18:51 | 1871172 Hannibal
Hannibal's picture

Or a Vz.58 for $700 

Fri, 11/11/2011 - 16:48 | 1870842 DormRoom
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

 

#occupywallstreet

Fri, 11/11/2011 - 16:10 | 1870749 kito
kito's picture

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

Fri, 11/11/2011 - 16:10 | 1870751 homersimpson
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.

Fri, 11/11/2011 - 16:27 | 1870798 kito
kito's picture

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

Fri, 11/11/2011 - 16:11 | 1870752 SheepDog-One
SheepDog-One's picture

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

Fri, 11/11/2011 - 16:11 | 1870756 The trend is yo...
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

Fri, 11/11/2011 - 16:11 | 1870758 marcusfenix
marcusfenix's picture

skynet is making trades with the matrix...

Fri, 11/11/2011 - 16:13 | 1870764 trampstamp
trampstamp's picture

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

Fri, 11/11/2011 - 16:13 | 1870767 bernorange
bernorange's picture

JPM statement translation: "Momma mia!  That's ah spicy ah meatball ah."

Fri, 11/11/2011 - 16:15 | 1870773 catch edge ghost
catch edge ghost's picture

Artificially Intelligent Pussies.

Back in my day, you had to chisel market orders into stone tablets. Then float them down stream on rafts where scribes and carrier pigeons would relay the message to men on horseback. Up hill in the snow.

And NO it wasn't BOTH ways. There was only one way, they were brave men who accepted their fates and made their mark(ets).

Please. Get off my lawn.

Sat, 11/12/2011 - 07:16 | 1871887 mick_richfield
mick_richfield's picture

African pigeons, or European pigeons?

Fri, 11/11/2011 - 16:19 | 1870781 e2thex
e2thex's picture

The guys who collect my garbage twice a week are long and my lawnman is short. 

Fri, 11/11/2011 - 16:19 | 1870783 Cdad
Cdad's picture

who is actually trading?

Answer:  Chinese vacuum tubes.

Fri, 11/11/2011 - 16:25 | 1870788 SheepDog-One
SheepDog-One's picture

Microchips talking to each other all day. +200 DOW woodies every morning. Oil $100. And the USD makes moves daily that would have sent markets into sheer panic just a few years ago.

'World reserve currency' -.80 just today....oh but its all good though, 1,800 P/E markets are up.

Fri, 11/11/2011 - 16:29 | 1870805 Cdad
Cdad's picture

So true, Dog.  The criminal syndicate killed the market in 2008...and it is no less dead today.

Fri, 11/11/2011 - 16:34 | 1870813 SheepDog-One
SheepDog-One's picture

Its really pointless to even pay any attention to it today, like watching a corpse with electrodes hooked up to it, zap it once in a while and it flops about... big deal.

Fri, 11/11/2011 - 16:21 | 1870785 vegas
vegas's picture

who is trading?

uh, me

The vacuum tubes in my head need repair though.

 

http://vegasxau.blogspot.com

Fri, 11/11/2011 - 16:23 | 1870790 unionbroker
unionbroker's picture

IF YOU BUY A BOARD  LOT OF ANYTHING YOU GET A THANK YOUI NOTE AND AN AUTOGRAPHED PICTURE OF oBAMA

Fri, 11/11/2011 - 16:24 | 1870791 devo
devo's picture

Translation: "We've spent the last four months building short positions. We're now short."

 

Fri, 11/11/2011 - 16:24 | 1870793 BeatTheMarket
BeatTheMarket's picture

who is actually trading?

These people?

Fri, 11/11/2011 - 16:24 | 1870794 catacl1sm
catacl1sm's picture

The guys selling Italian Bonds are buying US equities. That's my theory. What else is there?

Fri, 11/11/2011 - 16:29 | 1870804 Whoa Dammit
Whoa Dammit's picture

Trades need to be made on Ebay to keep everyone honest and to cut out the middle men. (Snark or not?)

Fri, 11/11/2011 - 16:32 | 1870809 unionbroker
unionbroker's picture

IN THE REAL WORLD IT IS CALLED WASH TRADING IN THIS FANTASY WORLD IT IS CALLED VOLUME

Fri, 11/11/2011 - 16:48 | 1870821 slewie the pi-rat
slewie the pi-rat's picture

 

frightening volatility!

  1. wtf? 
  2. what does jpmorgue mean by "no cash positions"1?

note1: see appendices 347 thru 2856

Fri, 11/11/2011 - 16:40 | 1870832 AldoHux_IV
AldoHux_IV's picture

Hard to believe that JPM (along with all the other systemically 'important' FI's) aren't influencing the market in some way-- whether it be using their favorite puppet: central banks.

Fri, 11/11/2011 - 16:42 | 1870840 onarga74
onarga74's picture

JPM is at new low of the day w/ 20 min to close.  This was just another pump for the smart money to leave. 

Fri, 11/11/2011 - 16:42 | 1870843 fuu
fuu's picture

Pussies.

Fri, 11/11/2011 - 16:59 | 1870888 walküre
walküre's picture

It's fixed.

Get used to it.

It's all fixed - in every sense of the word.

Fri, 11/11/2011 - 17:07 | 1870909 Mary Wilbur
Mary Wilbur's picture

I'm out. Two or three weeks I sold all my positions and bought GLD and am keeping a little cash on the side. I have no idea what's going on with the markets and have come to the conclusion that the fix is in.

Fri, 11/11/2011 - 17:36 | 1870988 The Count
The Count's picture

Its musical chairs my friends. Even though the PPT hast managed to alsways prop the S&P back above 1200 in order to have a cushon when the next wave of bad news comes I would not bet the house on this going on ad infinitum. Eventually the music will stop and there wont be a single chair to set your ass down on. 

Fri, 11/11/2011 - 17:40 | 1871001 NaiLib
NaiLib's picture

Who actually trade? :) I did a check in one of the markets in Europe where I can see who does what....

There were 3 institutions representing approx 50% of trades. However net flows from them were LESS than 3%.......

 

Want the names? Credit Suisse Morgan Stanley Societeé Generale. So The three largest made half of the trades, but did not

shift more than 3% one way....

My take is that any market, globally is absoluteley dead, Stone dead. Retail investors are gone, for a very long time. Confidence is lost.

We will see further bloodbath in the financial sector. There will be massive layoffs even from here. There simply is no money to earn. This will go on for years, and if you

want to make maney you have to figure out how the guy who wrote the computer programs can be so stupid that they maka all markets go the same way in Europe and US when the Euro goes one or the other way.

Any sound analyst know that a strong Euro is an absolute catastrophy for Euroepean stocks.   

Fri, 11/11/2011 - 17:49 | 1871025 slewie the pi-rat
slewie the pi-rat's picture

Yay!  confidence is lost!

now we'll see whose horse is best;  c'mon down to the glue factory!

stag- like molasses in november

-flation like turbo hy-speed multi-myth-0-matic vapor speed moneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneymoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneymoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneymoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneymoneyprintmoneyprintmoneyprintmoneyprintmoneyprintmoneyprint

Fri, 11/11/2011 - 17:40 | 1871003 NaiLib
NaiLib's picture

Who actually trade? :) I did a check in one of the markets in Europe where I can see who does what....

There were 3 institutions representing approx 50% of trades. However net flows from them were LESS than 3%.......

 

Want the names? Credit Suisse Morgan Stanley Societeé Generale. So The three largest made half of the trades, but did not

shift more than 3% one way....

My take is that any market, globally is absoluteley dead, Stone dead. Retail investors are gone, for a very long time. Confidence is lost.

We will see further bloodbath in the financial sector. There will be massive layoffs even from here. There simply is no money to earn. This will go on for years, and if you

want to make maney you have to figure out how the guy who wrote the computer programs can be so stupid that they maka all markets go the same way in Europe and US when the Euro goes one or the other way.

Any sound analyst know that a strong Euro is an absolute catastrophy for Euroepean stocks.   

Fri, 11/11/2011 - 18:10 | 1871074 slewie the pi-rat
slewie the pi-rat's picture

i liked your 4th post

but your fifth post is just as good!

Fri, 11/11/2011 - 17:42 | 1871007 DTCC 1999
DTCC 1999's picture

No love of technical analysis on inter-day contracts huh ZHers?

Bollinger bands, trendlines, triangles, support/resistance, tight channels, 50% fib retracements, short skirts and point and figure I can wrap my dumb assed head around.

The options not so much. I hate the Greeks more than Germany.

Fri, 11/11/2011 - 18:34 | 1871135 Hannibal
Hannibal's picture

Been out of the market and staying out. I am in cash only (not in the bank) and buying the dips in physical gold and silver and taken delivery. Meanwhile I am enjoying practizing my Vz.58.

 

Fri, 11/11/2011 - 18:59 | 1871189 reload
reload's picture

I think the problem with intra day techs is that the moves are so damned quick! Sometimes the 1 min bars make more sense than anything longer. So getting in to bounces or sell offs early requires patience, discipline and speed.

Fri, 11/11/2011 - 21:15 | 1871370 lolmaster
lolmaster's picture

The delusional rantings of a third rate sales broker at JPM. How does JP stay out when they ARE the market? TD one should stop posting such embarrassing rubbish

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