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Here Comes The Herd: "Highly Volatile Trading Conditions Expected Ahead"

Tyler Durden's picture


Last night we presented a very disturbing warning from one FX broker, Oanda, on what Sunday's election could mean for FX trading on Sunday (nothing good). And, as often happens in such instances, the idea has now been "incepted" - look for every FX brokerage to follow suit, likely followed by the plain vanilla exchanges to issue comparable warnings ahead of Monday.

From FXDD:


And for a suddenly very appropriate primer on herd dynamics we recommend the following article from Spiegel.


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Thu, 06/14/2012 - 14:21 | 2526499 Cognitive Dissonance
Cognitive Dissonance's picture

Snagglepuss - "Exit stage right."

(In fact it doesn't matter where you go as long as you get away from ground zero.)

Thu, 06/14/2012 - 14:22 | 2526507 WALLST8MY8BALL
WALLST8MY8BALL's picture

Heavens to Murgatroyd!

Thu, 06/14/2012 - 14:24 | 2526518 Pladizow
Pladizow's picture

If a Gov was thinking about it, this weekend would be a good time to officially devalue.

Thu, 06/14/2012 - 14:26 | 2526534 SilverTree
SilverTree's picture

Just sitck your finger in a dike.

Thu, 06/14/2012 - 14:47 | 2526647 knukles
knukles's picture

Add funds to your account....
What could go wrong?

Thu, 06/14/2012 - 14:50 | 2526664 Cognitive Dissonance
Cognitive Dissonance's picture

E V E R Y T H I N G!


Thu, 06/14/2012 - 14:53 | 2526672 JohnG
JohnG's picture's gone.

Thu, 06/14/2012 - 15:12 | 2526759 Troll Magnet
Troll Magnet's picture

seriously, what the fuck is up with greece? the rothchilds couldn't force them to use diebold or what?

Thu, 06/14/2012 - 16:36 | 2527156 Sudden Debt
Sudden Debt's picture

Adding funds....

Being closed out from your account...

Get a penny per grand in compensations....

Thu, 06/14/2012 - 14:48 | 2526650 BLACK_DOG
BLACK_DOG's picture

I did, she slapped me!

Thu, 06/14/2012 - 15:04 | 2526712 noses
noses's picture

Idiot. These weren't your fingers, it was your nose.

Thu, 06/14/2012 - 16:01 | 2527037 macholatte
Thu, 06/14/2012 - 14:27 | 2526543 Ahmeexnal
Ahmeexnal's picture

Ahhh....another rig operating out of templar owned Malta.
What could they possibly know that the sheeple watching euro2012 soccer tourney don't (and in most likelyhood will never care to know)?

Thu, 06/14/2012 - 14:50 | 2526661 knukles
knukles's picture

Wasn't that where Gene Saladin had that hole in one?

Thu, 06/14/2012 - 21:08 | 2527847 WmMcK
WmMcK's picture

Gene Sarazen - double eagle - 1935 Augusta?
Or is that one too many slippages?

Thu, 06/14/2012 - 14:26 | 2526524 Vincent Vega
Vincent Vega's picture

CD & WS8M8B, You guys are showing your age (and mine). Thanks for the laugh.

Thu, 06/14/2012 - 14:34 | 2526577 Cognitive Dissonance
Cognitive Dissonance's picture

Glad to be of service. We old pharts need to stick together.

Can't wait to move into my kid's basement after they cut my SS stipend. :)

Thu, 06/14/2012 - 14:35 | 2526584 Divided States ...
Divided States of America's picture

If these arent huge flashing warning signals beaming right in front of you, then you deserve to lose all your money.

Thu, 06/14/2012 - 14:38 | 2526599 Cognitive Dissonance
Cognitive Dissonance's picture

Hence my advice (above) to "Exit stage right".

Thu, 06/14/2012 - 16:34 | 2527147 Carl Spackler
Carl Spackler's picture

"after they cut my SS stipend"

CG, at least you're getting something - anything - from SS.

When I was in college in the 1980's, the economic textbooks proclaimed that I would pay 7 units in to receive one unit back in benefits from the Social Security fund, while the "Baby Boomers"(i.e., the greediest generation) got 7 units back for each unit they paid in.

Looks more like I should expect to receive $0.00 with SS on a path to going bust.




Thu, 06/14/2012 - 14:40 | 2526613 financial apoca...
financial apocalyptic contagion's picture

The markets are so fucked up

Trading limitations are imposed but we can still "share" this amazing announcement on fuckberg and shitter

Thu, 06/14/2012 - 14:44 | 2526637 UP Forester
UP Forester's picture

You must mean financial markets.

The Farmers Markets in the area are going gangbusters.

Will let you know when the biggest one IPOs, 'cuz they actually serve a useful purpose....

Thu, 06/14/2012 - 16:51 | 2526691 financial apoca...
financial apocalyptic contagion's picture


Thu, 06/14/2012 - 14:29 | 2526512 AlaricBalth
AlaricBalth's picture

Oh never mind.

Thu, 06/14/2012 - 14:26 | 2526533 Dr. Engali
Dr. Engali's picture

Your age is showing CD.

Thu, 06/14/2012 - 14:31 | 2526562 Cognitive Dissonance
Cognitive Dissonance's picture

Old phart and proud of it.

That is also why I try to include reference links. So the young em's can keep up. :)

Thu, 06/14/2012 - 14:40 | 2526604 Dr. Richard Head
Dr. Richard Head's picture

Back in my day we didn't have cartoons.  We used to dress up our cats and pull their tales for entertainment. 

Hell, back in my day we had silver money.  I remember when I was a young man I could buy a hooker for a silver dime.  Those were the days.

Thu, 06/14/2012 - 14:59 | 2526694 El Oregonian
El Oregonian's picture

Yea, and you probably had to spend a $20.00 Gold Walking Liberty coin for medicines to clean it up the diseases... 10 cent hookers?

Thu, 06/14/2012 - 15:51 | 2526983 Pairadimes
Pairadimes's picture

Give it a few short years, and that silver dime will once again be all you need.

Thu, 06/14/2012 - 14:40 | 2526610 Dr. Engali
Dr. Engali's picture

They don't know what they are missing with some of those old politically incorrect cartoons.  Ahh good times ;->

Thu, 06/14/2012 - 14:44 | 2526636 BLACK_DOG
BLACK_DOG's picture

roast is rear !

(old phart too)

Thu, 06/14/2012 - 14:49 | 2526660 Michael
Michael's picture

Sometimes with age goes extended knowledge and wisdom.

Magoo's Surprise Party

Thu, 06/14/2012 - 21:29 | 2527904 Meatballs
Meatballs's picture

El Kabong!

Thu, 06/14/2012 - 21:48 | 2527961 Buck Johnson
Buck Johnson's picture

The market should be bloody tomorrow, if not the PPT is working overtime to keep it up.

Thu, 06/14/2012 - 14:23 | 2526504 Spitzer
Spitzer's picture

CNBS "How to Euro proof your portfolio"

Euro low is in.

Time for the dollar to eat dirt

Thu, 06/14/2012 - 14:25 | 2526521 Dr. Engali
Dr. Engali's picture

I tend to agree with you. There are way too many shorts on the Euro now......unless they cover going into the weekend. Then it should be interesting.

Thu, 06/14/2012 - 16:11 | 2527071 xtop23
xtop23's picture

Agreed. I went short USD a tad early. Hanging onto my position though.

Thu, 06/14/2012 - 14:23 | 2526510 HoofHearted
HoofHearted's picture

So, are they saying..."You're all dumb money and are going to get this all wrong. Get out while we can still use your cash as margin for us to lever up on some prop bets."

Thu, 06/14/2012 - 14:36 | 2526589 Matt
Matt's picture

Or they don't want to take losses for other people's bad bets. If someone is at 100:1 leverage and there is a 2 percent move when markets reopen, wouldn't the FX trading service lose the difference between the clients' assets and the money owed? Even if the client has some cash reserves in case of margin calls, if it is not enough, the rest of the loss would be taken by the service, right?

Thu, 06/14/2012 - 14:26 | 2526515 Yen Cross
Yen Cross's picture

 I'm going to "Wally World" , after I get my haircut tomorrow morning. The auto pilot is set.

Thu, 06/14/2012 - 14:26 | 2526530 lolmao500
lolmao500's picture

Volatility : money.

Thu, 06/14/2012 - 14:26 | 2526531 rumblefish
rumblefish's picture

so if the greece leaves the euro --> euro stornger? --> Dollar falls? -- > Dow +350?

Thu, 06/14/2012 - 14:27 | 2526545 lolmao500
lolmao500's picture

The markets are so insane, this is probably what's gonna happen... anyway, the longer Greece stays in the euro, the worst it will be. Them leaving quickly will be the ``best`` scenario...

Thu, 06/14/2012 - 14:30 | 2526553 geewhiz190
geewhiz190's picture

what if the election has no winner ? do they vote again? and again?  this is the most widely advertised potentaily volatile event since y2k.

Thu, 06/14/2012 - 14:46 | 2526645 Matt
Matt's picture

If the election has no winner or somehow New Democracy forms a coalition, EUR could surge and the massive losses could be to the shorts. It could go either way, so best to get out of the pool. 

Someone will probably have to govern with a minority or coalition, you can't just keep having election do-overs in perpetuity.

Thu, 06/14/2012 - 14:54 | 2526674 MarsInScorpio
MarsInScorpio's picture

Yes you can.


This isn't NFL football where you go to a different system if the game is still tied after two attempts to score.


Thu, 06/14/2012 - 15:06 | 2526718 ThirdWorldDude
ThirdWorldDude's picture

In Europe we have (penalty) shoot-outs if the game's a draw after extra-time...

Thu, 06/14/2012 - 15:21 | 2526832 walküre
walküre's picture

Now that would be cool. Have the candidates draw duelling pistols in the wee hours of the morning after.

Thu, 06/14/2012 - 16:50 | 2527190 Carl Spackler
Carl Spackler's picture

3rd World Dude...yours is a true statement, and it reminds me of an old Monty Python's Flying Circus episode in which the Greek philosophers (i.e., Socrates, Plato, Archimedes, among others, in their togas) were playing againt the Germans (Marx, Nietzsche, et al.) in a football match.

The comedy was genius...Socrates just stood at mid-field walking around aimlessly and pondering!  I seem to recall that the match ended in a draw.  Found the link...

Something tells me such is a microcosm of what the world should expect out of the European Union this weekend ! 

Thu, 06/14/2012 - 14:59 | 2526696 sunaJ
sunaJ's picture

Oh reeeeeeeeally?



Thu, 06/14/2012 - 15:21 | 2526836 AustriAnnie
AustriAnnie's picture

They can keep having election do overs while capital flees the country, businesses move out of the country, and all the citizens have withdrawn everything from the ATM (or can't due to bank closures).  When businesses fail to get food on the shelf and people can't access money or go broke, does it matter what coalition gov't is formed?

It's possible that instead of the votes counting, what will matter is which party's followers gets the loudest and most violent on the streets. 

Thu, 06/14/2012 - 15:59 | 2527027 Matt
Matt's picture

either way, at some point, they will stop calling new elections. Do you really think they could go to 20 or 30 attempts at forming a government? I doubt it. If there is no decisive outcome from this election, I figure they might go for a third attempt, but not many more than that.

Thu, 06/14/2012 - 15:59 | 2527030 Overfed
Overfed's picture

Except this is for real.

Thu, 06/14/2012 - 14:30 | 2526556 sitenine
sitenine's picture

GS says, "bullish"

Thu, 06/14/2012 - 14:31 | 2526563 Darkness
Darkness's picture


Thu, 06/14/2012 - 14:36 | 2526587 walküre
walküre's picture


Thu, 06/14/2012 - 14:31 | 2526568 Ned Zeppelin
Ned Zeppelin's picture

With all these warnings, you just KNOW the markets will be screaming up green on Monday, courtesy of some completely unexpected but fully bought and paid for talk of "cooperation" out of newly elected Greeks.  

Thu, 06/14/2012 - 14:31 | 2526570 New American Re...
New American Revolution's picture

EVERYBODY IS LOOKING AT THE ELECTIONS IN GREECE!!!   And ignoring the elections in Egypt.   Which one do you think will impact the markets more, Greece, or Egypt?    My money is on Egypt, because that's the real wild card, and it's about to go postal.

Thu, 06/14/2012 - 14:38 | 2526596 Yen Cross
Yen Cross's picture

Sad, but Egypt isn't part of the E.U. Mubareks (xau) holding could easily keep Greece afloat for 4-6 months. Est.70b$

 You guys are probably right about the euro short covering. There are 3 scenarios moving into Sunday. All of which will be short lived. Personally, my bet is against the euro S/T. I don't trade eur/usd directly though.

Thu, 06/14/2012 - 15:29 | 2526870 AustriAnnie
AustriAnnie's picture

Also pays to keep an eye on this Syria fiasco.

The administration knows that while everyone is focused on Greece/Europe, they can get away with all kinds of stealth manipulations in the Middle East.  

Syria events combined with Egypt can create some waves.  

Thu, 06/14/2012 - 14:35 | 2526580 walküre
walküre's picture

The herd is in cash. Not betting on anything. Allot of money is parked in cash or cash equivalents.

We will all be the last to know when the oligarchs decide to gutt the banks for a few days, reset the currencies, debt and valuations and by the time our banks open the cash and cash equivalents are worth a fraction of what they were earlier.

That is where the crowd is at this moment.

Thu, 06/14/2012 - 15:11 | 2526750 dogbreath
dogbreath's picture

I posted on the original report last night; which way are the sheep running." Now that the other forex broker have picked this up it stinks even more.    wouldn't the euro strengthen if Greece pulled out.   

I woke up this morning dreaming somthing about CHF.  My dreams are beutifully vauge.  

Thu, 06/14/2012 - 14:37 | 2526590 slaughterer
slaughterer's picture

Either: We will get a massive face-eating gap up on Monday.

Or: the algos will pump futures up to unch at market open on any negative results.

Seems stupid to join the herd and short the EUR over the weekend in an account that will be closed for trading, and prime for looting Sunday.   

But, hey, feel free to "add funds to avoid liquidation."

Thu, 06/14/2012 - 14:43 | 2526625 Yen Cross
Yen Cross's picture

Hedge the trade. If you feel comfortable risk reward wise, going into the W/E, then buy some protection. Lower your leverage and add some margin like slaughterer said.   Played properly it could be a great trade!

Thu, 06/14/2012 - 14:54 | 2526676 junkyardjack
junkyardjack's picture

The easy play is to go long.  When Greece elections are done and no one reacts to it markets are going to jump.  If people are scared about it there is still the Bernake bailout waiting so the market won't drop much.  Shorting here is crazy

Thu, 06/14/2012 - 15:16 | 2526794 walküre
walküre's picture

shorting here is crazy


the Bernake bailout waiting

keep dreamin'

Thu, 06/14/2012 - 14:50 | 2526607 slaughterer
slaughterer's picture

BTW, wonder how many leveraged UNG short accounts were liquidated on that 14% blowtorch job on NG today. 

Thu, 06/14/2012 - 14:52 | 2526666 geewhiz190
geewhiz190's picture

Now if AAPL breaks today Jeff Gundlach is going to be looking pretty good 

Thu, 06/14/2012 - 14:40 | 2526615 slewie the pi-rat
slewie the pi-rat's picture

the greek election is a non-event imo

no reason to form a goobermint for a while, anyhow

they should just stall like everybody else

as long as the checks are in the mail the promises will continue to ponzi the printers with their bedazzling status quo + can kicking finiMini clown car routines

if it ain't broke, why fix it?

Fri, 06/15/2012 - 03:16 | 2528519 dogbreath
dogbreath's picture

ya,  they seem like egypt after trhe fall of muba.  takes a while for trhe army to make their move

Thu, 06/14/2012 - 14:41 | 2526618 Uncle Remus
Uncle Remus's picture

Wait - are they still running the bulls in Spain?

Thu, 06/14/2012 - 14:43 | 2526629 Grand Supercycle
Thu, 06/14/2012 - 14:43 | 2526630 The Count
The Count's picture

OK, I will takes bets that regardless of how the elections pan out the 'crapping in their pants' eurocrats will pony up whatever money is necessary to keep Greece going.

Thu, 06/14/2012 - 14:44 | 2526633 BennyBoy
BennyBoy's picture

I thought the Greek elections were rigged to stay in the euroland.

Jamie told me.

Thu, 06/14/2012 - 14:44 | 2526635 eclectic syncretist
eclectic syncretist's picture

WOW!!  A hand-written note of confession that they intend to wipe out your account for all they can.

This is nothing short of a pre-emptive legal move to try and protect themselves once they ramp futures to one or the other extreme on Sunday night/Monday morning and wipe out overleveraged players.   They're going back to the old "bucket-shop drive" type play this weekend, and letting everyone know beforehand.  Covering their asses so that they can pay back pennies on the dollar when they fleece a bunch of suckers is what it sounds like.  And they're emphasizing telling investors to add money beforehand when they should be telling them to reduce exposure???!!!  LOL  Wall Street planning a sheep-shearing party for the market-makers taking out the stops!

Probably means that the smart move would be to fade any big ramp job over the weekend, as that would put one on the side of the market-makers.

Come to think of it, the paper market ETF's for commodities could be being operated a lot like a bucket shop, which is totally illegal.  Not that that matters much these days.

Thu, 06/14/2012 - 15:08 | 2526722 geewhiz190
geewhiz190's picture

everything's going to be just fine now

Thu, 06/14/2012 - 15:13 | 2526766 Grand Supercycle
Thu, 06/14/2012 - 16:11 | 2527063 deflator
deflator's picture

I'm guessing alot of the FX's are leveraged up to the point where they themselves are casinos. "all bets are off" is protecting the house, not the players. These FX's are like gold bullion storers who eventually figure out that they can write claimchecks against future resources in multiples of "their reserves". Eventually there is a run on the reserves and their Ponzi scheme is exposed.

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