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Intraday Trading Observations

Tyler Durden's picture




 

From Peter Tchir of TF Capital Markets

It finally feels safe to get long some stocks and high yield.  The move into noon was scary.  The move since then has been equally scary.  S&P moving around 30 points in half an hour seems wrong, but it does feel that weak longs got culled with these moves, once, if not twice.  IG seemed to get used as a hedge because people couldn't believe how far HY had dropped and didn't want to pay up, so for the first time, investors seem to have gotten themselves hedged and wedged.  That should help on any move upward.  I have to believe that some Eurpean investors shorted S&P into their close as the move so big and fast.  They are stuck now hedged and wedged and are likely to want to close out rather than keep.

The market has been showing up as heavily oversold, and finally feels like its oversold.  The NFP number wasn't bad today.  I was definitely surprised.  I am dubious about the accuracy of the number, but nonetheless, given how oversold we are, it should add some support.  I don't think the governments of the world, nor the central banks can do much to stem the crisis, other than print money in whatever form they prefer, but it seems like we will face a barage of these announcements.  The ECB and Italy seem to be firing the first salvo, but I would be shocked if we don't also get a good QE3 rumour later today.

I'm not sure how long I will want to stay long.  Nothing will have been solved, and I think Europe in particular cannot be solved because it will take the political will and money of a couple countries to solve the economic problems of other countries, but enough sweet things will be said, it will be easy for the market to rally.  And European credit actually traded fairly well today for the most part.  Some ugly moments for sure, and huge bid/offer, but it wasn't a disaster.  I don't think we can get a particularly big rally, because after these moves, investors have to run smaller positions.  I think SPX moved up 10 points and gave back 10 points in the time I wrote this

 

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Fri, 08/05/2011 - 14:00 | 1527664 -Michelle-
-Michelle-'s picture

I am dubious about the accuracy of the number, but nonetheless, given how oversold we are, it should add some support.

How did he write that without his head exploding?

Fri, 08/05/2011 - 14:00 | 1527665 Josh Randall
Josh Randall's picture

VIX = It's whats for Dinner

Fri, 08/05/2011 - 14:02 | 1527673 ZimbabweTrillionaire
ZimbabweTrillionaire's picture

institutions still betting on vol spike

Fri, 08/05/2011 - 14:04 | 1527681 ZimbabweTrillionaire
ZimbabweTrillionaire's picture

over 1 million vix futures contracts traded today- huge

Fri, 08/05/2011 - 14:50 | 1527838 chartcruzer
chartcruzer's picture

take a look at the slow stochastics on the VIX.   Looks like a bounce of some kind is at hand however, I would'nt bank on much of a bounce unless QE3 announced.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s163761243]&disp=P

also this was a parabolic move which nearly allways ends in a snap back.  

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s162497802]&disp=P

Tyler seems on the ball today.

here's risk bonds.   Looks like another decent trade.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s232907077]&disp=P

 

Fri, 08/05/2011 - 14:00 | 1527666 ZimbabweTrillionaire
ZimbabweTrillionaire's picture

a positive artcle from ZH?  this site has been hacked!

 

Fri, 08/05/2011 - 15:11 | 1527906 Gene Parmesan
Gene Parmesan's picture

Whether or not there's a preponderence of positive or negative expressed sentiment is a direct result of the reality of the situation at hand. Complaining about ZH running a lot of negative articles is like complaining that ESPN is running too many stories about baseball here in August.

Fri, 08/05/2011 - 14:02 | 1527674 Jeff Lebowski
Jeff Lebowski's picture

Summary:  Shit is fucked, but go with the flow.

Sad.

Fri, 08/05/2011 - 14:06 | 1527680 Gene Parmesan
Gene Parmesan's picture

How can anybody say that they were surprised by the NFP numbers this morning? Given the immediate economic climate, and considering the entity responsible for producing the numbers, I would say that we were all but guaranteed a nice healthy bump up. You can't keep up the illusion of recovery without a little sleight of hand at this point.

Fri, 08/05/2011 - 14:05 | 1527689 Worker Bee
Worker Bee's picture

I wonder what the real number was before some bean counter was called from high up and told to re-revise the numbers.

Fri, 08/05/2011 - 14:07 | 1527691 alien-IQ
alien-IQ's picture

and how about the timing of that oh so rare "upward revision" to last months numbers?

Who woulda thunk it? LOL!!!

The wole thing is such an obvious farce that it's impossible to take any government issued numbers seriously.

Fri, 08/05/2011 - 14:04 | 1527683 alien-IQ
alien-IQ's picture

I'm not sure "safe" is a word I would use to describe any position in this market right now...be it short or long.

And I would NOT want to be holding either over the weekend.

But it's great if you're just scalping.

I expect a big move in the final hour. could be down or could be up...but it will be big and volatile...that's a "safe" assumption.

Fri, 08/05/2011 - 14:07 | 1527692 Gene Parmesan
Gene Parmesan's picture

I'll be waiting for the after hours news - all the good stuff seems to happen late on a Friday for some mysterious reason.

Fri, 08/05/2011 - 14:08 | 1527703 alien-IQ
alien-IQ's picture

I think if the /Es breaks below 1195 again...we gonna do some serious spelunking.

Fri, 08/05/2011 - 14:11 | 1527712 caerus
caerus's picture

im watching the NQ testing the neckline...catch up (or down i guess) with the ES...imho

Fri, 08/05/2011 - 14:09 | 1527695 kito
kito's picture

 

It finally feels safe to get long some stocks.....of bottled water, canned food, ammo, gold, silver

 

is this guy for real? oversold? just how can a bankrupt planet be oversold?

Fri, 08/05/2011 - 14:10 | 1527705 caerus
caerus's picture

no shit...articles like this make me feel better about shorting

Fri, 08/05/2011 - 14:18 | 1527711 Doyle Hargraves
Doyle Hargraves's picture

+1861!

 This article was written by someone who banged 7 grams of hopium into his pipe and smoked it all at once!

Fri, 08/05/2011 - 14:14 | 1527715 Clorox Cowboy
Clorox Cowboy's picture

Thaaaaaank you!

Fri, 08/05/2011 - 14:16 | 1527723 KevinH
KevinH's picture

How about we post something constructive. shaving off 100+ handles on the snp in a week is at least a 3 std deviation move, with the market being short term oversold. All this author is saying that we could see a relief rally up so he feels more comfortable to go long, should he choose to do so. 

Fri, 08/05/2011 - 14:28 | 1527775 kito
kito's picture

post something constructive? kev--your formulas mean absolutely nothing. a 3 std deviation move? i laugh at your broken market prognostications based on irrelevant charts. the market is behaving like a child reacting to a centrally planned animal circus. applause for trichet the tiger as he jumps through the hoop of fire!!!!!  do us a favor and go surf on an elliot wave.... 

Fri, 08/05/2011 - 14:46 | 1527832 Cursive
Cursive's picture

@kito

Damn. I didn't know you had it in you. Well said.

Fri, 08/05/2011 - 14:53 | 1527853 kito
kito's picture

let me at 'em. let me 'at em......

Fri, 08/05/2011 - 14:34 | 1527798 fuu
fuu's picture

Paraphrasing Cdad from a few days ago, "Oversold? These markets have been overbought for 2 years."

Fri, 08/05/2011 - 14:55 | 1527857 Variance Doc
Variance Doc's picture

And what is your reference distribution for this 3 sigma move?  You're a dumbshit if it is Gaussian (aka Normal).  A 3 sigma movement on a power law distribution, which these markets follow, is not a big deal.  Thus, markets are NOT oversold.

Lookin' for positive news Pollyanna?  Try CNBC.  You will find comfort there with the rest of the clairvoyant followers.

Fri, 08/05/2011 - 14:11 | 1527706 DebtSlaveZombie
DebtSlaveZombie's picture

Trading this isn't fun.  This market is gonna bounce then nose dive into 10,000.  But going short anything right now may rip you face off before you have a chance to make that money.  BAC is going to zero, but may hit 15 before it gets there.....  man, this is intense.  But, this is why we do it right?  Right?

Fri, 08/05/2011 - 14:12 | 1527708 MichaelG
MichaelG's picture

Off topic, but whatever happened to Nic Lenoir of ICAP?

Fri, 08/05/2011 - 15:23 | 1527941 jdrose1985
jdrose1985's picture

Idk but I really enjoyed reading his updates. Couldn't hang with the momo crowd I guess..

Fri, 08/05/2011 - 14:16 | 1527722 bproct55
bproct55's picture

Speaking of rumors... What happened to the rumor going around of a U.S. downgrade coming this afternoon?  Is that still happening?

Fri, 08/05/2011 - 14:18 | 1527737 Aductor
Aductor's picture

No. Neither Oblahama nor Boner would allow it.

Fri, 08/05/2011 - 14:16 | 1527729 Aductor
Aductor's picture

Remember: Jobs is a lagging indicator and (on down days) "volume is not real, 'cuz it's only machines trading". I am sure this is a buying opportunity. It must be. Right?

Fri, 08/05/2011 - 14:17 | 1527730 Aductor
Aductor's picture

Double post.

Fri, 08/05/2011 - 14:18 | 1527740 alexwest
alexwest's picture

another clueless idiot..
#
he NFP number wasn't bad today. I was definitely surprised. I am dubious about the accuracy of the number, but nonetheless, given how oversold we are, it should add some support
##

what fucking difference does it make?
50 or 100 or 200 ths..

its fucking rounding error.. even BLS says that.. +-100,000 is margin of error.. RTFM

here's true ahrd facts
there're 100+ mln private jobs in USa, and 46+ mln ADULTS are on food stamps.. its bascailly % 30+ underemployment..

and this moron is saying 'wasn't bad today.'..
its been 'not bad' for last 2 years..

what an idiot
alx

Fri, 08/05/2011 - 14:30 | 1527785 B-rock
B-rock's picture

It doesn't matter what the real numbers are -- all that matters to a trader is what moves the market.  

He's saying "not bad" from a trader's perspective. That's different.

Fri, 08/05/2011 - 14:21 | 1527759 alexwest
alexwest's picture

forgot to mention..

hey idiot, read latest cbo monthly preview..

corp taxes are flat y/y.. if companies are profitable why they dont pay more taxes..?

#2 SS taxes are down 5% y/y

how is it possible? if more people are working (1-2% more ) + nominal wages are rising (2/3 % more),
so SS taxes must be higher y/y , dont they?

and dont tell me crap about SS taxes are lower because of reduction in payroll taxes.. bullshit..

ss taxes were also lower in 2010 , whole year, before reduction..

alx

Fri, 08/05/2011 - 14:27 | 1527770 Whatta
Whatta's picture

investors seem to have gotten themselves hedged and wedged.

I got hedged with SPY puts...and wedgied pretty good on some MLP's I am long. Does that count?

Fri, 08/05/2011 - 14:31 | 1527788 adr
adr's picture

Oh yeah we are sooo oversold. Chipotloe and Netflix are down ten bucks after rallying 300% on vapors. I wonder what the birth death number was to give us this magic +100k job BS. I guess momma getting a second job or uncle charlie finally getting a $8 job at Home Depot after his 99 weeks of unemployment really helped.

You can't have a good economy with somewhere around 30% of working age Americans dependent on government income. But oh yes stocks are cheap and are very oversold.

Going by forecasts we are to believe that Priceline is going to be a $850 stock. Chipotle will be $650. Lulu will get to $400. Sales will not increase by the same percentages but that doesn't matter, the Ponzimatic Express can't be stopped. As the last bastion of wealth creation only the trading of worthless paper can make a person rich.

End the market and force the privatization of every publicly traded company in the world. Return capitalism to a system that succeeds or fails based on the actions of real business instead of the false support of free money from the government and the heavy hand of a creative accountant whose only job is turning loss to profit.

Fri, 08/05/2011 - 14:43 | 1527825 caerus
caerus's picture

but burritos and yoga pants are sooooo hot right now...

Fri, 08/05/2011 - 14:31 | 1527790 alien-IQ
alien-IQ's picture

I'm calling bullshit on this EUR/USD ramp job.

Just shorted the bitch at 1.4284. Looking to cover at 1.4207 or stop out at 1.4315.

Sometimes you just gotta say "what the fuck".

Fri, 08/05/2011 - 15:37 | 1527997 DebtSlaveZombie
DebtSlaveZombie's picture

Amen.  Just short everything.  Massive liquidations coming.

Fri, 08/05/2011 - 14:32 | 1527791 slaughterer
slaughterer's picture

"I would be shocked if we don't also get a good QE3 rumour later today."

We already got our "good QE3 rumour" from Jan Hatzius, our most renowned analyst on Zero Hedge, um, I mean, at Goldman Sachs. 

QE3 bounce next week: shorts have to cover before FOMC announcement on Tuesday. 

Fri, 08/05/2011 - 14:32 | 1527792 Bobby Lee
Bobby Lee's picture

The only longs you want now are dead cat bounces on horrible news, a highflying biotech that recently lost 66% overnight being a case in point. This is beginning to remind me an awful lot of the spring of 2000. Good money to be made until the cats quit bouncing.

Fri, 08/05/2011 - 14:33 | 1527795 Bam_Man
Bam_Man's picture

"investors seem to have gotten themselves hedged and wedged"

"investors" don't move the S&P 50 points in a half hour on a bullshit headline out of Europe.

There are no "investors" left.

This is a hyper-leveraged derivatives casino.

A "market" it most certainly is not.

Fri, 08/05/2011 - 14:33 | 1527796 youngman
youngman's picture

Why are we even talking about stocks and the market now???  The EU is broke...the USA is broke..Japan too...looks like the Latin miracle is shutting down....I mean do we need to talk about Apples new toy all day long...this is the wierdest time I have ever lived in....no one is telling the truth...they are all protecting their own little fiefdoms...the bankers are controlling this world right now....and they are ruining this world...

Fri, 08/05/2011 - 14:35 | 1527804 B-rock
B-rock's picture

...Because it's where a lot of us make our living. That's why.  :)

Fri, 08/05/2011 - 14:37 | 1527806 Mec-sick-o
Mec-sick-o's picture

It is the system we have accepted, enslave all to debt.

Fri, 08/05/2011 - 14:40 | 1527815 alien-IQ
alien-IQ's picture

there's always going to be someone or something trying to fuck you up. You can't let it/them succeed.

fight one battle at a time. the first one should be the one for your own survival. because if you do not survive, you will not be able to help anyone else.

we're talking about stocks, Fx, options or whatever because this is what we do to put food on the table and keep a roof over our heads.

"they" can only ruin the world if the world gives them the power to.

I chose not to grant them power over me.

Fri, 08/05/2011 - 14:42 | 1527820 Variance Doc
Variance Doc's picture

What is an "investor" these days, food for the Ponzi?  The only investment stratagy  that works in these broken/manipulated markets is long PMs, a little short on indexes.  Also, chips and beer to watch the show (a.k.a. Greater Depression) play out while cleaning the MR556 after 6" groups at 450m.

LOL, "investors".

 

Fri, 08/05/2011 - 14:44 | 1527828 slaughterer
slaughterer's picture

No state is broke which owns a printing press. 

Fri, 08/05/2011 - 14:48 | 1527836 Gene Parmesan
Gene Parmesan's picture

Not until people decide that the printed currency is worthless at least.

Fri, 08/05/2011 - 14:51 | 1527842 caerus
caerus's picture

uh-oh...bs rally fading...fading...

Fri, 08/05/2011 - 14:52 | 1527844 LetThemEatCake
LetThemEatCake's picture

For what it's worth, declining issues outnumber advancing issues almost 2:1 at 3 PM ET. Seems to me it's just a breather on the elevator downwards for equities, unless the FED announces QE3 definitely on Tuesday, which I find unlikely at this point since the ECB announced they will do some QE on their part.

Fri, 08/05/2011 - 14:57 | 1527864 Stares straight...
Stares straight ahead's picture

Anyone losing fingers catchin' knives??

Fri, 08/05/2011 - 15:03 | 1527878 Johnny Yuma
Johnny Yuma's picture

Watch out! ES just hit it's RTH opening price level and got denied. We could roll over again here.

 

Fri, 08/05/2011 - 15:06 | 1527887 LetThemEatCake
LetThemEatCake's picture

Consumer credit surged in June, so what consumption there was, it was on credit.

Fri, 08/05/2011 - 15:25 | 1527945 Mesquite
Mesquite's picture

Like I've said before..Shit and Fans don't mix well..

But I do like the charts..TNA/TZA

Shows me how 'they' feed their insider buddies..

Then stories are conjured up to explain the action..

Now if I can just overcome my emotions and go along for the ride..

Yup, the ONLY game in town..

As an aside, reminds me of Wiley Coyote being over the cliff,

holding an umbrella and furiously trying to blow lots of air upwards towards said umbrella,

while the ground awaits far below...

Be safe/well all...

 

Fri, 08/05/2011 - 15:31 | 1527969 ZippyDooDah
ZippyDooDah's picture

Zerohedge has a constituency divided between short-term market relativists (traders) and long-term market absolutists.  Safe to say, the absolutists don't understand the language or activity of the traders.  Witness the flaming on "oversold."

 

Fri, 08/05/2011 - 15:56 | 1528064 Variance Doc
Variance Doc's picture

This is not logical.  False dilemma. Safe to say you have been smoking an ass-load of crack.

Following your "logic":

ZH has a population that is NOT divided between relativists and absolutists.  Safe to say the absolutists DO understand the language/activity of the relativists.  Its just we don't believe the market is oversold, based on our ability to reason and reason well.

Fri, 08/05/2011 - 15:52 | 1528051 B-rock
B-rock's picture

... and the RANsquawk guy had hiccups. 

Sat, 08/06/2011 - 09:04 | 1530109 bproct55
bproct55's picture

huh...so they waited until after the market close...

Wed, 09/14/2011 - 04:51 | 1667420 chinawholesaler
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