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Low Volume Meltup As EUR Jumps Most Since MAR09

Tyler Durden's picture




 

In a splendid show of market wonderment, EURUSD managed a 350pip rally off Sunday night lows to pull off its biggest percentage gain since MAR09 at over 3.5 standard deviations. Correlations forced ES higher (breaking above its 50DMA intraday for the first time since late July) as every risk asset rode the FX carry train on 'new hope' that more debt will once again fix everything that is wrong with our debt-laden, risk-loving world. With TSYs closed and volumes 40% below average it seemed evident that the risk assets were beating to the same drum almost tick-for-tick as Oil broke $85, copper almost $340, and Gold $1670. European markets were relatively subdued until the US day session opened and then we were off to the races in equity and credit as Energy and Financials led the way (both up over 4% on the day).

EUR daily change (close to close) is 2.37%, the largest since 3/18/09 (just outpacing the JUL10 move).

European credit and equity markets were treading water until the US opened and then all was well in the world.

But it seems that (rather surprisingly given the huge uncertainty) correlations were driving everything as ES pulled right back up to where CONTEXT (calibrated from Friday) would suggest is fair. Of course the biggest driver of this was EURJPY but the convergence is remarkable given that human beings are supposedly trading?

Charts: Bloomberg

 

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Mon, 10/10/2011 - 12:43 | 1757893 Manthong
Manthong's picture

It's a breakout.. Buy  whille you still can!

Mon, 10/10/2011 - 12:44 | 1757917 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Invest in dollars, because....because...everyone else will eventually!  Come on team, we are all investing in dollars!  All together now!  Kiiiiiing Dollar!

Mon, 10/10/2011 - 12:49 | 1757945 MillionDollarBonus_
MillionDollarBonus_'s picture

I can't understand why libertarians still don't get it. The Euro and equity futures are rallying because we are starting to see a pattern of bank nationalization throughout the EU. This is extremely bullish, as it represents a shift of the control of resources from the market to top economic advisors in governments throught Europe. These economists have spent their lives developing the best mathematical models for resource allocation, enabling them to allocate resources as objectively and efficiently as possible. This means that Europeans can look forward to a proportionate increase in wealth, freedom and liberty.

Mon, 10/10/2011 - 13:16 | 1758057 Schmuck Raker
Schmuck Raker's picture

Naw. Juice.

Mon, 10/10/2011 - 13:27 | 1758105 hambone
hambone's picture

MDB,

sorry but your mask has fallen off and the pain of accepting what is through humor seems a challenge even for you today. 

Mon, 10/10/2011 - 13:30 | 1758111 Jonas Parker
Jonas Parker's picture

MillionDollarBonus -

I can't understand why libertarians still don't get it. The Euro and equity futures are rallying because we are starting to see a pattern of bank nationalization throughout the EU. This is extremely bullshit, as it represents a shift of the control of resources from the market to top economic advisors in governments throught Europe. These economists have spent their lives developing the best mathematical models for resource allocation, enabling them to allocate resources as objectively and efficiently as possible. This means that Europeans can look forward to a proportionate increase in wealth, freedom and liberty.

 

There! Fixed it for you! No thanks are necessary!

Mon, 10/10/2011 - 14:01 | 1758275 Problem Is
Problem Is's picture

+1... It needs more fixing but you pinpointed and excellent starting correction...

Mon, 10/10/2011 - 13:45 | 1758160 Manthong
Manthong's picture

"bullish, as it represents a shift of the control of resources from the market to top economic advisors in governments "

Gotta' love it.. if you have the stones to do industrial stength cognitive reframing, the pain and the insanity can be downright humorous and pleasurable.

Of course, it's no effort at all if you are a born masochist.

Mon, 10/10/2011 - 14:42 | 1758449 Peter_Griffin
Peter_Griffin's picture

They will have to print a lot of Euros to nationalize these banks and keep them sufficiently capitalized.  Did tarp or either QEs provide American's with an increase in wealth, freedom, and liberty?  No, we got high inflation and stagnant wages, the opposite.  Why would it be any different in Europe?  Hint, it won't be.

Mon, 10/10/2011 - 14:51 | 1758490 pelagivore
pelagivore's picture

MDB,

Excellent! What we need desperately are more hyper-Keynesians to help shore up the system (and perhaps some additional high grade statisticians to prevent the odd once-in-a-one-hundred thousand years event); group think is highly under-rated I would say. The Libertarians also don't seem to understand that if they are right (trying not to laugh at that one) then they will be living in a hovel on some mountain, or seaching for scraps of road-kill..... all this so that they can say 'well, i told you so'. Nuts.

Mon, 10/10/2011 - 12:51 | 1757955 LeonardoFibonacci
LeonardoFibonacci's picture

So much for the end of the financial world due to Europe.  It will be centuries before a collapse because Big Ben has alot of play room.

Mon, 10/10/2011 - 12:41 | 1757898 SheepDog-One
SheepDog-One's picture

Total insanity controls it for now, until Slovakia throws a wrench into the turbine fan blades tonite.

Mon, 10/10/2011 - 12:46 | 1757925 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bernanke is about to target UNEMPLOYMENT with monetary policy.  You want to talk about insanity?  Let us stroll through the Keynesian psych ward..........

Mon, 10/10/2011 - 12:48 | 1757936 TradingJoe
TradingJoe's picture

That would be sweet SD1, I can finally test my new popcorn machine(and girlfriend)!!

Mon, 10/10/2011 - 12:42 | 1757907 Quinvarius
Quinvarius's picture

All FOREX is managed by central banks.  They will keep the EUR within whatever range they want.

Mon, 10/10/2011 - 12:43 | 1757910 Cassandra Syndrome
Cassandra Syndrome's picture

But the Dollar Index plummeted today. Bad news for the QE junkies. Can't have your printed cake and eat it dark lords.

Mon, 10/10/2011 - 12:46 | 1757930 baby_BLYTHE
baby_BLYTHE's picture

Bernanke has said on numerous occasions that he cares very little about the exchange value of the dollar versus other currencies. Plus, Obama said he intends to 'double' our exports by the end of his tenure in office no way at all that will happen without more QE and much lower dollar

Mon, 10/10/2011 - 12:43 | 1757911 redpill
redpill's picture

It's official: global markets have gone full retard.

Mon, 10/10/2011 - 13:46 | 1758183 css1971
css1971's picture

Um. ITYM Americans...

 

Mon, 10/10/2011 - 16:01 | 1758838 UBIGDummy
UBIGDummy's picture

and silver barely moves.  SOMETHING FISHY

Mon, 10/10/2011 - 12:45 | 1757918 GeneMarchbanks
GeneMarchbanks's picture

DXY chart of the day. Where the selling came from nobody knows.

Mon, 10/10/2011 - 12:47 | 1757920 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

If the fascist USA didn't open everyday, or exist at all, the world would be a much better place.

Mon, 10/10/2011 - 12:47 | 1757932 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

All governments are now fascist.  If we ended the fascist system, then the world would be a better place.

Mon, 10/10/2011 - 14:09 | 1758306 Problem Is
Problem Is's picture

To end fascism... Corporate owned governance... you would have to eliminate the perpetual corporation...

Every Corporation is a Profit Maximizing Firm
For every corporation will corrupt government to install a monopoly/oligopoly market to  maximize profits...

Thus fascism will always re-emerge in the crony capitalist/ anti free market/ Wall Street puppet government system...

"I will argue that the dissolution of the corporation is the sine qua non of democracy."

Rob Newman

Mon, 10/10/2011 - 12:45 | 1757922 Ronaldo
Ronaldo's picture

Buy until December 2012!  Yeah, buy it all up.  Bull Market Rally!!!!

Mon, 10/10/2011 - 12:46 | 1757926 the not so migh...
the not so mighty maximiza's picture

buying high is where its at (puts on helmet)

Mon, 10/10/2011 - 13:39 | 1758149 junkyardjack
junkyardjack's picture

Can I get a hit of what you're smoking, I'm not high enough yet

Mon, 10/10/2011 - 12:46 | 1757928 French Frog
French Frog's picture

It's been a while since we had one of those storming 'meltup' monday; beware the 'holiday reversal' setup though where we could start heading back down, as soon as the overnight session later on

Mon, 10/10/2011 - 12:49 | 1757943 mt paul
mt paul's picture

long

standard deviations ...

Mon, 10/10/2011 - 12:50 | 1757948 whoisjohngalt11
whoisjohngalt11's picture

Soma ,Baby in a Brave New World all you need is Soma or some more coca leaves lol

Mon, 10/10/2011 - 12:50 | 1757954 Belarus
Belarus's picture

credit and stocks have reached "context." isn't that cute: equities are now fairly valued. 

Mon, 10/10/2011 - 13:01 | 1758002 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

...I love Milliondollarbonus...now that I understand the trim of his sails

Mon, 10/10/2011 - 13:03 | 1758013 Archimedes
Archimedes's picture

I know the Robots are in charge on low volume melt up days because the Dow jumps 250 - 300 pts and then levitates there all day varying less that a few points for hours on end.

Geez. Soon time to turn shorts back on.

Mon, 10/10/2011 - 13:21 | 1758076 RmcAZ
RmcAZ's picture

+1... it's ridiculous to see the Dow trading in such a tight range

Mon, 10/10/2011 - 14:24 | 1758360 Sandy15
Sandy15's picture

This is what the market has done since Fed intervention beginning March 09.......  The Bernack is up to his old tricks but hiding them again so gold and silver do not fly upwards as well.

Mon, 10/10/2011 - 13:24 | 1758085 totem
totem's picture

I think humans are the problem here.

If algos have a buy-bias, then it's our fault we're not at DOW 36000 today.  Two possible solutions are: (1) ban humans from selling/shorting stocks, or (2) eliminate humanity.

Humanity: we just get in the way.

Mon, 10/10/2011 - 13:44 | 1758168 hambone
hambone's picture

Totem,

you may find resistance as humans are likely biased against your proposal to downsize humanity...you may have better luck pitching this to the computers?

Good luck

Mon, 10/10/2011 - 17:16 | 1759103 totem
totem's picture

It's not a matter of resistance.

See, the market has no meaning to computers... to them, it's just software playing with numbers and trying to amass the highest total.

Humanity is necessary to give meaning to the market!  What does it mean to have the highest total if we are not here?

We've turned economics (which buy us food, clothing and shelter) over to computers, who have no concept of what they're actually doing.

This is an indescribably EPIC FAIL!

Mon, 10/10/2011 - 13:45 | 1758175 Minoan
Minoan's picture

Major dilemma.Should i play at a casino or short the eur/inr?

Mon, 10/10/2011 - 13:57 | 1758253 Translational Lift
Translational Lift's picture

Correlations forced ES higher (breaking above its 50DMA intraday for the first time since late July) as every risk asset rode the FX carry train on 'new hope' that more debt will once again fix everything that is wrong with our debt-laden, risk-loving world.

Makes sense to me......More debt to pay off more debt to pay off more debt to pay off more debt to pay off more debt to pay off more debt..................Sick bunch of fkers..........

Wed, 10/12/2011 - 09:41 | 1765264 karmete
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