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Gold Up, Stocks Up, Bonds Up, VIX Up; That Is All
The market was not exactly ecstatic at the FOMC minutes but certainly squeezed up off its pre-minutes lows to end very fractionally green (S&P small up, Dow down, NASDAQ up - thanks to AAPL's 2% gain - it's 7th in 3 month). Post-FOMC the QE-on trade was very clear - Treasury yields tumbled, stocks popped, USD weakened, and Gold soared. These were quite significant moves relative to recent ranges: Gold broke above its 200DMA - back to early May highs; Treasury yields dropped 10bps - biggest plunge in rates since start of June (as it bounces off its 200DMA). On the week, the NASDAQ is the only major US index in the green (+0.1%) while the Dow is down 0.78%. VIX ended above 15% - very fractionally green - as credit (spreads) underperformed - not participating in the last 45 minute ramp in stocks. In general, equity's strength was not accompanied by risk-assets following suit today - but the QE-on correlation regime is likely dominating that divergence (though we do note that TSY 2s10s30s and FX carry were not playing along at all in the equity strength) and while volume was better than last week, it was concentrated around the FOMC minutes and also into the close (with blocks coming through into the close) - another narrow range (10 S&P points) day.
Gold broke above its 200DMA and trades back to May 2nd levels...
as it disconnected in a QE-on manner after the FOMC minutes...
with Treasury yields plunging their most in over 2 months...
with today's AAPL action leaving NASDAQ the only green index on the week...
as credit was not impressed with the late day action...
and with volatility up, credit underperforming, treasury yields down, and FX carry unmoved (even though USD weakened), it is no surprise that our arb and CONTEXT (risk asset) models were not playing along with this equity hope...
Charts: Bloomberg and Capital Context
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Indeed.. Japan is at it again? The market will trade with data.. Fed still Dove's.
we have no idea - http://hedge.ly/OvyB2I
10 Year fully converged today.
http://blog.quantsig.net/2012/08/22/meanwhile-the-10-year/
QQ more. Welcome to the world of Fed manipulation, where low interest rates can be used to force bonds higher and threats of QE can force the market higher.
Reguardless, if you are algo trading expecting normal correlations to hold true... this is a fair warning: fed manipulation means you need to understand what the fed is doing and how that will affect the market. Discretionary trading is the new new. (vix is only up on increased volume. People forgetting to add vix positions at 13-14 and panicking at 14-15). Since 2008, we have not seen low vixes like this last for very long. So load up on the lows, buy bonds, and btf pm dips
Look how many HFs and MMs are losing money versus the 500's performance! This new, evolving market, is going to require human intelligence to manuver through, and if you are tradnig algorhymically, or with stop limits, you are going to get burned. Everyone was so quick to turn to machines to do your trading you forgot that machines are STUPID. Discretionary trading (as in, human brains with trillions of micro processors, slow as the may be) are still king, especially in a heavily manipulated market.
bond prices are at their highest...you're saying buy? maybe i missed the /sarc tag?
30 bonds just fell from 153 to 145... we are kinda far from the highs... & no, always btfd stfp. bonds could settle down again in a bit, but will likely resume their retarded move upward. I know, bond bubble going higher = retard moment. But the market is 1 giant fucking retard running around with its head cut off... don't expect shit to make sense. Just be ready to GTFO of the way if 30 bonds drop below 143-44. Alternatively. I would recommend buying at just about this level, should we miraculously see 145 again.
When it comes to the indices though, this ability of the fed to get machine traders to buy anything with a q and an e in it, means the market may continue its idiotic move upward. Historically however, markets don't do particularly well without direct fed intervention, following fomc releases.
You're simply wrong.
There are no humans involved anymore, other than those who write the headlines in the manner that the algorithm guys informed management that THEY shoujld inform the media to phrase.
Headlines move computer algorithms. Period. There are no humans.
There is also no market.
Stop trading. Take your money out and buy farmland. Have something of value, which only farmland and oil are. The value of everything else is imaginary. It exists only in your head, when in the world fast approaching only value in your stomach counts.
dude you have no f'ing clue what you are talking about. I'm a human trader, does that mean I don't exist? I just bought 30 bond at 145.10
Does that mean I practice magic? Yes. Clearly magic, as that is the ONLY way any HUMAN could EVER make money in the market. I'm guess you bought Faceberg and now its panic time?
If you think a human brain isn't smarter than an algo, you are clearly mistaken. There are literally thousands of trading strategies that will make money, including things like arbitrage. The only people that lose money are idiots- people who are overly bearish or overly bullish. Which is why most ppl from ZH don't trade... b/c they would just declare the markets dead and short them, and be in margin call by the end of the week. Smart traders don't care about bull and bear. Short and buy whereever you see fit, diversify across brokerages, pull money at the end of successful quarters, and practice your strategies to perfection. It's really kinda easy if you do the work, which is ironically a lot.
You're trading with what? $6,000? You don't exist.
started with 30k and bought BVSN NIA P&D. Other mentionables, Long bonds, then short, now long. Gold and silver when they were ni the pinch. Long platinum and palladium still. and lets not forget that epic crash in oil and it's subsequent rise, which if you read ZH regularly, they would have explained that production costs are about 70-120 dollars, and 80 dollars was a great place to buy... and who could forget corn and soybeans? I think I have a sweet spot for gmos now :D Now... 350,000. Of which, I keep 150 in cash, PM bullion, food, and guns.
Take your alleged 350 and buy farmland. Bullion and guns won't feed you. Farmland, and telling the crowd of 5000 who arrive at the door that you are a farmer and they are not and can farm for them. . . will keep you alive when they loot the place. Your guns would be useless when you are asleep and they outnumber you.
Farmland and oil. Nothing else has value outside your head.
or you could leave for south america when shtf, or move to a remote area. Hell I live in Western mass. Up here its like the great recession hasn't even hit yet.
All I'm saying is. Trading is not off limits to humans b/c an algo can trade faster than you. Reason why ppl suck at trading is b/c they trade with NO PLAN. they just say I think XYZ, here market take my money. & when it moves against them, they panic. Don't panic when you see an algo fuckup, it's really simple just btfd and make the bots pay. & if its a huge fuckup, short that trading firms stock and see 60% profits over-Knight (oHHH get it?).... :|. Lastly, you'll know when there's a chance for a catastophic algo crash. And I'm guessing it won't involve a Vix of 15. LOL
The algo is your brain. "and that's the point" according to the programmer who made his sales pitch. "I can build a thousand different models of that guy's mind and I guarantee the algo will win everytime." the buyer of the program pondered for a moment. "how much?" he asked. The programmer not knowing the insidious genius he had responded "175,000" thinking there was no way the buyer would agree to such an exorbitant price." "I'll take 50,000" was the reply...
From my fixed income analysis, you bought a 30 year bond at 145.x...so when rates rise...yea, i know...stop laughing...the value of that bond will be less that its value today. Why not buy a index fund like BOND? As much as I like fixed income securities, the inverse relationship between price and yield is keeping me out of the markets.
well according to federalies, the interest rate stays until 2014, and op twist stays until after election. So it's kinda like free money... for the next few months. However, I would suspect that if they were to change interest rates, they would do it through fomc minutes or a chairman speech. So if you were worried about rates changing and an algo sell off, you could just close your positions before major news events. As for Bond funds and shit like that, I generally stay away from anything called a fund. Even something about the wording, "fund", seems misleading.
I prefer to make the decisions myself. Which means yea, I spend all night making charts and optimizing indicators... but I'm kinda paranoid, & I trust no one. So I would never trust a fund with my money. I like to take responsability for my own fate, not hand it over to someone else. Even still, I take what ZH says with a grain of salt and do research myself on top of it. So seeing as I'm kinda paranoid and don't trust other people, I prefer to invest by myself. So when it comes to things like etps, I like to know that I can do the math to calculate how that etp works! & I got news for you, 3X leveraged and 2X leveraged don't mean what you think they do! But they do serve a purpose... For instance, today when FOMC minutes came out, and QE was stated as going to come at some indefinite point, you could have bought that pslv or slv or gld, mining stocks, oil etfs, or bought into a stock that responds well to QE like a financial stock. & then simply sold into the hft algo frendzy that results.
Point is, I have a crazy theory that HFT generates money out of thin air, and this is where a big chunk of inflation comes from. If HFTs can launch the value of something up, place a sell order, and then just cancel the buy orders: the sell order just generated a few cents free of charge. Now true hfts go stop hunting, but soon that will be a dead division of hft as ppl stop using stop limits. So this is the only thing that can explain how HFTs kill it in the market and there is still liquidity and low vix. If that's the case, then trading is really necessary b/c HFTs, while they SERIOUSLY do provide liquidity and market giration, they create inflation, which means money sitting on the sides simply loses.
"Honey, I'm going long today. Tomorrow I'm aiming short, and it's all going in the middle." Spoken like a true whore I must admit.
I prefer opportunist.
hats off to you brother. i spend all day looking at this stuff, and i am less confident. this year i am just over three and half percent above the market return, and well, at least im not down....
You know what might help? Look for smaller stocks that have made large moves recently. Ones that show great potential, and have only recently begun moving up. Forget buying shit everyone already knows. Trading Radioshack isn't gonna earn you monies. Maybe shorting FB will though :D. Just look for the unknown unknowns with fantastic fundamentals. Trading stocks without fundamental analysis of quarterly reports, earnings, industry comparisons, clients, industry outlook, upcoming projects, outside opinions, articles from trusted blogs, news reports relative to the stock... is hopeless. Truth is you gotta go digging for days on end, stock after stock after stock, until you find that diamond in the rough that yields like 200% in half a year. & the same can be done for stocks you want to short. just invert everything, like ur looking for an overvalued stock, other than something everyone knows like aapl. Then just wait. Doesn't really matter where the market goes. The good stock drops less in downturns and the shit stock gets dumped hard, and vice versa. Diversify ur money across a few of your favorite stocks and you should do very well. But believe, it can take weeks to find that perfect stock, and it's like one you will have never heard of b4. To give you an example of ones I bought in early feb- bdsi, tsla, tri, lqdt, yoku, bvsn, optt, crm... stocks you never heard of, and all had some fantastic returns. I didn't really do the arb of shorting stocks back then, but I think it would work today. But stocks I have shorted? znga, fb, kcg, stan, and aapl. Trust me, you just gotta block out all the noise and get down to the fundamentals.
check out DEXO
the company is priced for bankruptcy, and a quick glance at the numbers confirms this view, but if you do some more research, it's clear the company will not go bankrupt. if (when) this company survives, it's 4000%+ return on investment.
not quite what I was thinking. I didn't look at it so I don't even know what they sell, but that move was only b/c of a merger... Not exactly what I meant. For instance, BDSI spiked from 1-2.25 when the FDA approved their pain killer opiat drug and they recieved a time line goal oriented contract for 180 million. That's a cash money bet.
& generally, mergers don't result in an increased capital flow which will reverse losses staggering enough to lead to bankruptcy. In other words, just b/c Penson merged with Peak6 doesn't mean I'm buying Penson's shitty stock... You gotta really go digging. you should be going through like, 40 stocks a day for at least a week and boil your favorites down to 2 or 3 or 4.
I agree entirely.
The stillness before the storm? The Blind leading the Blind?
'CNBC Just Krugmanned Me' - War of words breaks out with Becky Quick after Barofsky's appearance on CNBC this morning...
That was disgusting and exactly why I stopped watching CNBS long ago.
Thanks for the clip; i've seen kinder muggings in a philly subway. i read 'bailout' also - it's truly sad how apathetic the US taxpayer is to being raped on a daily basis. The problem now is that the majority of the country depends on local, state, federal monies; teachers, cops, retirees, defense contractors, gov employees, welfare. you name it and half the country collects it. we're properly fucked and obamney only accelerates the flow from the middle to the upper and lower 1%s.
Retest of 1426 before Sept. 12th and then crash and burn. Simple as that. Take that to Art Cashin.
it will all correlate at 100000, or 0.
Maybe both. S&P at 100000 pts in US$ or near 0 in oz of gold.
FYB
What's that you say? Fill Your Boat?
OK, I just hope I don't lose all my shiny coins and ammo in an unfortunate accident.
"Something, something, BERNANKE" was my guess. Thus +1.
T-bonds up, what?
Rhinoceros? Impossiros! [/cowardly lion]
The swap rates added 10-20bps on the 5Y+ , dont worry they will be up when investors dump gold and fly to SAFETY & QUALITY!
to quote miltonfriedmansnightmare:
Once you enter, you never leave (the merry old land of ZIRP).
http://www.youtube.com/watch?v=8nlD_BQnAFw&feature=related
True
The Bros always win.
Falling from cloud 8.99 still feels good
EUR/YEN down... stock market USUALLY trades with that... s&p 500 spiked up at the close, while YEN spiked down... HMMMMM!
Spanish & Italian yields in the short end were rising again, IBEX down - solely EUR/USD still holding up thanks to the Draghi effect
For todays comedy i wish to advise German speakers to read the comments in todays Spiegel Forum to Samaras "personal guarantee" - simply classic
http://forum.spiegel.de/f22/griechenland-hilfen-samaras-gibt-deutschen-g...
Of course, Mr. Samaras, if i were entering the realm of neo-feudalism i should pay closer attention to the mode of legal obligations
http://www.rzuser.uni-heidelberg.de/~cd2/drw/e/ei/nlag/einlager.htm
This guy sounds like he reads ZH (or "fonzanoon" or "sudden debt" or "end the fed"). He just forgot the /sarc:
Ich persönlich garantiere fuer alle Schulden der Welt bis zu Hundert Millionen Billionen Fantastillarden. Also noch viel Spass beim Schulden machen und Geld verprassen, wohl bekommts.
Ist doch eh alles Monopoly Geld, bei Bedarf druckt die EZB was eben gerade gebraucht wird, na und? Am besten mit jedem Laser Printer eine Bankenlizenz vergeben, dann braucht niemand mehr zu arbeiten und jeder kann sich sein Geld selbst drucken. Dann ist auch endlich Schluss mit dieser nervigen Bettelei von den stolzen Suedlaendern.
This guy is one ANGRY GERMAN (this is one good reader forum on Der Spiegel, just go there and use google translate to get what they are saying, they are f*cking pissed off):
der größte Mafioso of all time, oder er meint es evtl. ehrlich. Meine Prognose: Mit dieser Ansage will er "Die Deutschen" weichkochen, will sie gefügig machen für weiteren Zeitaufschub und mehr Hilfszahlungen. Aussteigen kann er immer noch, zu jeder Zeit, also abgreifen was geht mit Versprechungen wie sie die Welt noch nicht gesehen hat. Oder er meint es wirklich ernst. Ich persönlich glaube ihm nicht, aber das ist meine ganz persönliche Meinung. Warum? weil die bisherigen Kürzungen nur und ausschließlich zu Lasten der einfachen Bürger gegangen sind. Nichts wurde bei "den Reichen" eingezogen, gekappt, sozialisiert! Ich glaube diesem Mann nicht. Und wenn Jahre später die Kritiker ihre Bestätigung in der real existierenden Finanzwelt finden, will heißen, Herr Samaras hat NICHT zurückgezahlt, dann ist der Mann und sein Kabinett läääääängst Geschichte! NEIN NEIN NEIN, glaubt diesem Mann NICHT! Und übrigens, woher soll das Geld denn kommen, aus Olivenöl?:
There were only two pro-Samaras comments in there.
If only the clowns in the Bundestag would have the guts and tenacity to respect the desperate, outraged opinions expressed on that forum. For Germans, Schuld (debt) is basically Suende (sin or even crime), punishable by "house arrest" or worse. Greece shoudl be pilloried for its excesses.
Are you arguing Greece hasn't been pilloried already? I feel like Bones in Star Trek discovering the implications of Genesis. "Dear, God man. What if this weapon is deployed on a planet where people are already living?!!"
They should have put their obolus where their mouth is and pulled an Iceland.
Maybe we should all resign ourselves to the fact that the NASDAQ and DOW will never ever fall again - not ever.
Years from now we will be telling grandchildren of days when the markets went down as well as up... and they will listen on our every word with wonderment that such a thing could even be possible.
Another day another BTFD on nothing. So yeah algos pushed up to green because of what again? Expectations of more QE? What a minute didn't ben already disappoint last time? So when he disappoints again. I guess Dow 15000 here we come. Re-fuckign-diculous.
I stick with a simple index fund. It's not the market that terrifies me but the issues with "human cyborg relations" that still haven't been ironed out yet. Needless to say "God has appeared as well"...go ahead...disrespect Him. See what happens...
Oh what a perfect world we live in.
bETTER Start printingggg nowww, bernny BERNIKE, and make announcement at JACKYKYY HOLE MEETING... AS USUAL !!!!! MONEY MONEY MONEY MONEY....MORE MONEY, WE NEED MORE MONEY FOR DOPING THE ECONOMY...UPS, THE BANKS, ISN'T IT? DON'T WORRY ABOUT PEOPLE, BUT VERRRRRY WORRYYYYY ABOUT BANKERS, OHH, FOR SURE. POOR BANKERS, NOTHING IS GOING GOOD FOR THEM SINCE LEHMAN... MORE MONEY FOR BANKERS PLEASE, THEY LOOK SO SAD....MONEY MONEY MONEY ONLY FOR BANKERS, THEY NEED MONEY TO LIVE, NOT AIR, JUSTE MONEY....START PRINTING NOW GREEN PAPER, LOT OF GREEN PAPER, AND BANKER WILL SMILE AGAIN...UNTIL....NEXT JACKYKY HOLE MEETING..WHJERE THEY WILL ASK FOR MORE OXYGENE, UPS... MONEY MONEY MONEY, SO SAD STORY...
One way to unstick that broken Caps Lock key is to pull out the keys from the board and soak them in warm soapy water for a bit. Using an old toothbrush to scrub away the buildup helps too. Let them dry, then re-install.
Yeah, but... porn site visitation "buildup" on the keyboard turns to cement over time. There's no hope for removal. At least that's what they tell me. I'm only passing on anecdotal information.
FTW!
Ha! While the Bernank wasn't looking the immediate rise in gold poked him right in the ASS! HAHAHA!!!
hahahahahhahaha
Benny-boy controls the price of gold. One of his minions, Dick Fisher (Dallas Fed), owns more than $1 million in GLD. If gold goes up, it's because Benny-boy allows it.
In retort, the HFT computers respond:
11100011001001011100011. 11000001101. 00110110. 0111000111. 111100110000111100. 01010110100.
That is all.
Theta is down:)
Had I not been aware of its fraudulent machinations, this market would had truly astonish me.
It is as if it has a mind of its own, evidently one that bids up its long positions to oblivion.
EUR up, JPY up, PMs up.
So I decided to start accumulating some UUP this avo.
I wonder if I'm stupid or something.
Don't forget to stock up on UNG and ERX.
Sell it Tues.
Issac is a comin'. (Followed by TD 10)
Long Live Benny~
Yeah, after God, we have berny, and after lehman, we have also berny, and after obama in november, we will have berny again and again... if bankers are happy, berny is happy, not all the bankers, but ... MOST of them. like 2009, solution is to print money and give it to bankers, well, money is easy to print, so i will become banker very soon, i hope berny is forever, so being a banker is useful, nothing more, but a banker...wowww!!
Treasury yields plunging their most in over 2 months... yeah, but they´re still 4% shy of a 200-year low. Stocks are at a 4-year high but still down 10% from the 2000 high and adjusted from inflation they´re probably down 50% or more. They have already crashed by 50% twice during this current bear market. It´s clearly a deflationary period. You have a massive and rising wave of technology and productivity increases in the face of a hopeless debt bubble. The economy demands increasing consumption as demand for labor decreases. Seems pretty hopeless if you´re into exponential functions.
The technological wave is so huge that soon you´ll be able to print your own stuff. That´s pretty serious if you count on inflation ahead in your investments.
who cares about inflation!! the important issue is to see SP higher at 1,600.... and after Bernny can go for Jacckyy hole meeting with nothing in the pocket... for sure! more money please, banks need more money to survive. who cares about anything? money for bankers is largely enough, all that we need is more doping from Fed, it solves anything hahahahaha...
Todays Econ Degree for Chad and Trixie.. Fed Speak and Printing 101
Algo Functions 202
Done. Masters Degree in Econ.
It´s a reactive system. You can see that it´s always reacting to a series of escalating crises. When you´re stuck in this position it means that you´ve failed to be proactive and therefore were unqualified to lead in the first place. But still you lead.
The new normal:
Stock should always end green. If not, the Fraud reserve will talk about easing.
Both the underlying reality and the illusion are true. Disregard either at your peril. Don't put all your eggs in one basket.
You see the dip at 2 O'cock on the 21st regarding the AAPL stock...FUCKING TOLD YOU SO! YUM YUM!
There is not a day that goes by over the past few weeks and months that says to me "this is it...the Government will now close Zero Hedge for viewing" under the little know addendum to Securities Law 12f paragraph C substet D section 4: "we are the Government...and that means we drink YOUR milkshake." Absolutely TOP shelf here folks. I'm missing the contributions from our Fellow Commentarians from Japan already!
Good day today although it could have been better.
Gold RSI was @ 64 this morning, Silver @ 69 :
http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2012/08/22/Crude_Oil_Sold_on_Japan_Export_Drop_Gold_Supported_Before_Fed_Minutes.html
Do you think they can maintain the momentum without ACTUAL QE announced?
Total mess and total disconnect trade.
It's all HFTs baby. Something the dumb ass Fed should ponder before the jawboning their bullsh*t. Point. Well, the market needs a trillion plus for a bull market. But with China/Asia/India all at the critical stages of stagflation destruction. Asia will resume it's USD buying once again.
Got some bad vibes building...
Whilst Europe and America are in sleepy la la inflation print mode:
from FX wires: AUD/USD dips below 1.0500 as players reload shorts ahead of China PMI
Resource and Energy Ministers comment - "Resources Boom is Over"
FTW as the China beatdown looms
How can treasury yields go down if QE3 is coming? Yeah the FED is gonna buy bonds but the FED buying bond is a sign of bankruptcy, not good economic health.
Because it's a closed loop system. Base Money gets created by the Fed only by buying something that already exists.
If QE3 money is used to buy USTs, than it removes USTs from the market. Less USTs it means higher price, hence lower yield.