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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 | 2720576 apberusdisvet
apberusdisvet's picture

OT:  Silver is having a woodie with no immediate  JPM counter.

Mon, 08/20/2012 - 13:29 | 2720774 malikai
malikai's picture


Mon, 08/20/2012 - 14:11 | 2721134 JPM Hater001
JPM Hater001's picture

Or perhaps the opportunity to counter has past...

Fall Rome...fall like you mean it.

Mon, 08/20/2012 - 11:26 | 2720577 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...




Mon, 08/20/2012 - 11:31 | 2720593 Irelevant
Irelevant's picture

Fins are scared shitles of Russia, they will stay in Euro.

Mon, 08/20/2012 - 11:47 | 2720648 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 | 2720611 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 | 2720601 LawsofPhysics
LawsofPhysics's picture

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 | 2721018 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 | 2720591 DavidC
DavidC's picture

I'd love it if someone could explain the exuberance in Apple, it certainly hasn't exited there!


Mon, 08/20/2012 - 11:33 | 2720602 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 | 2720623 fonzannoon
fonzannoon's picture

i wonder what aapl is going for inthe dark pools

Mon, 08/20/2012 - 12:16 | 2720728 Hype Alert
Hype Alert's picture

You mean to tell me this market has two sets of books.  Say it ain't so!

Mon, 08/20/2012 - 11:42 | 2720631 Dr. Engali
Dr. Engali's picture

I'd say a minor short covering rally if you were allowed to go short in Spain.

Mon, 08/20/2012 - 11:48 | 2720653 Meesohaawnee
Meesohaawnee's picture

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 | 2720681 Dr. Engali
Dr. Engali's picture

True,very true.

Mon, 08/20/2012 - 11:45 | 2720639 NEOSERF
NEOSERF's picture

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 | 2720686 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 | 2721272 uncle_vito
uncle_vito's picture

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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