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Exuberance Exits As Spain's IBEX Hits 200DMA

Tyler Durden's picture





 

In a normal market, whatever that is, we would not feel the need to note every tick in the Spanish equity market; but today's 2% decline - its worst in 3 weeks - is the first down-day in 10 days. IBEX, the Spanish equity market index, rallied over 29% from it's lows on 7/23 (following a decent leg down after the EU-Summit disappointment) only to perfectly reach its Maginot Line at the 200DMA on Friday and this morning. The volatility regime is very reminiscent of last year with the binary (chaos or serenity) scenarios the only ones left for most market participants and with a short-selling ban doing nothing but exaggerating the whipsaws, we wonder if the IBEX is due to revert back further - more in line with its sovereign credit moves on Draghi's 'believe-me!' speech. Perhaps the realization that another rumor (rate-caps) has come and gone has broken the cycle of faith...

 

IBEX performance has been dramatic...

 

and notably more so than in Spain's sovereign bonds - which implicitly is the fulcrum security that should be driving the performance...

 

Charts: Bloomberg

 


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Mon, 08/20/2012 - 11:25 | Link to Comment apberusdisvet
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OT:  Silver is having a woodie with no immediate  JPM counter.

Mon, 08/20/2012 - 13:29 | Link to Comment malikai
malikai's picture

.

Mon, 08/20/2012 - 14:11 | Link to Comment JPM Hater001
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Or perhaps the opportunity to counter has past...

Fall Rome...fall like you mean it.

Mon, 08/20/2012 - 11:26 | Link to Comment Jim in MN
Jim in MN's picture

Pretty cool bit by Ambrose Evans Pritchard on Finland's potential first mover exit (Fixit), as complicated by meanie Vladimir.  More depth than most of the rumor-goggling going on...

 

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/948591...

 

Mon, 08/20/2012 - 11:31 | Link to Comment Irelevant
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Fins are scared shitles of Russia, they will stay in Euro.

Mon, 08/20/2012 - 11:47 | Link to Comment magpie
magpie's picture

The willful obfuscation of the separate European monetary union aka Euro, the European Union as is and the NATO military alliance is always astounding.

Mon, 08/20/2012 - 11:37 | Link to Comment Ghordius
Ghordius's picture

+1 "Fixit"!  but in typical AEP fashion he implies in the title that "the russian bear" forces the Finns in staying in the eurozone - and this is pure hogwash. What he writes in the article is that the Finns want to stay in the EUR so that also from a monetary point of view they keep some distance from Russia.

And why does AEP speak about a taboo if all political parties involved are so clearly engaged in discussion? Come on, when it comes to the EUR he is just obsessed. (yes, another reason for me sporting that avatar)

Mon, 08/20/2012 - 11:33 | Link to Comment LawsofPhysics
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Russia has been here before, non-event.  This is nothing to most who grew up in the shadow of that collapse, Americans get to experience this for the first time, let's see how that goes.  Hedge accordingly.

Mon, 08/20/2012 - 13:42 | Link to Comment AldousHuxley
AldousHuxley's picture

this is like saying russia is preparing for a cold winter.

 

russia survived financial meltdown due to proliferation of shadow banking and markets arising from lack of trust in institutions.

 

Mon, 08/20/2012 - 11:30 | Link to Comment DavidC
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I'd love it if someone could explain the exuberance in Apple, it certainly hasn't exited there!

DavidC

Mon, 08/20/2012 - 11:33 | Link to Comment Meesohaawnee
Meesohaawnee's picture

wow. a decline and correction. shocker. I cant explain crapply other than complete stupidity of sheep being led to slaughter. Really 600b market cap you tell me where its worth the risk/upside. Just goes to show ya theres always enough suckers.

Mon, 08/20/2012 - 11:38 | Link to Comment fonzannoon
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i wonder what aapl is going for inthe dark pools

Mon, 08/20/2012 - 12:16 | Link to Comment Hype Alert
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You mean to tell me this market has two sets of books.  Say it ain't so!

Mon, 08/20/2012 - 11:42 | Link to Comment Dr. Engali
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I'd say a minor short covering rally if you were allowed to go short in Spain.

Mon, 08/20/2012 - 11:48 | Link to Comment Meesohaawnee
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were not allowed to go short either here Dr.. its just one gov at least has enough balls to announce the short ban one doesnt.

Mon, 08/20/2012 - 11:59 | Link to Comment Dr. Engali
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True,very true.

Mon, 08/20/2012 - 11:45 | Link to Comment NEOSERF
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All I'd say this means is to expect a bunch more pump comments from the EU to get this up again...they really have found the secret sauce...why do anything when all you have to do is say you will do something.

Mon, 08/20/2012 - 12:03 | Link to Comment Shelby Moore III
Shelby Moore III's picture

Spanish stock market "says kiss my a$$ goodbye" repelled by the 200 dma again.

Mon, 08/20/2012 - 14:54 | Link to Comment uncle_vito
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Spain is due for a Bill auction on Tuesday, Aug 21, I believe.

Should be interesting.  Yields will not remain low and will push 7% again.

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