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Market Fails To Zucker In Gullible Traders With End Of Day Stop Hunt
Well, they sold in May but did they go away? If today is any guide, they did as the swings across asset classes intraday were very reminiscent of 'death rattles' with trading scenarios becoming more and more binary and more and more extreme. Into the US macro data this morning risk assets in general were behaving in a synchronized manner. As the dismal data hit, it got wild with gold and stocks gapping down and Treasury yields crashing lower (10Y 1.53 handle!) only to be saved around the European close by chatter of IMF aid for Spain (funded by the selling of unicorn tears) at which stocks erupted (and while bonds, the USD, and Gold also reacted - they were far more muted). The afternoon was quiet until stocks had a mind of their own and went on a stop-hunt up to yesterday's late day highs (and that magical 1315 level) - pulling well away from any other asset-class reality - only to fail dismally, ending with an abrupt tumble back to sanity (just slightly in the red for the day) grabbing VWAP into the close.
The signals were everywhere that risk was not 'on' no matter how hard stocks tried with high-yield credit (most notably the ETFs) surging and purging ending with a terrible dive (after popping up to VWAP after our earlier note) on heavy volume. Financials outperformed on the day - though late day gave some back - ending the month down dramatically (MS/JPM -22%).
Among commodities, Gold remains the winner on the week (though down 0.6% - which still beats USD's 0.8% gain effect) as Copper and Silver have recoupled around -2.5% on the week and WTI is just terrible -4.75% at $86.50. FX markets were quiet this afternoon but EURUSD remained near its worst levels and JPY continues to strengthen. Treasuries bounced off record low yields but 10Y and 30Y remained around 17bps lower on the week.
VIX broke above 25 and below 23 to end unch at around 24%. Heading to tomorrow's NFP (and today's month-end) seemed to make many nervous and the swings were extreme in many assets but at the end of the day stocks remain notably rich relative to credit (and TSY's) view of the world and even more so relative to broad-risk assets.
Stocks (blue) tried and failed again to pull away from Gold and USD reality and Treasuries even less sanguine...
As we noted earlier, HYG whipsawed - and stocks tried to pull away from credit but failed again...
and here is HYG vs SPY more clearly...
HYG's destruction did not appear to be an arb trade (here against HY18 - the CDS index)...
The month of May was ugly for financials leaving Citi and JPM unch YTD and MS still -11% (and fo course BofA +32% - makes perfect sense)...
Commodities starting to increase dispersion (though Copper and Silver seem like buddies again) with gold holding in for now...
especially relative to the USD's strength (bold green)...
Broadly speaking, equity markets remain rich relative to capital structure (vol, rates, and credit) and also to risk-assets in general (TSYs, FX, commodities, spreads, and PMs) as is seen in the upper left and right charts respectively. Lower left shows that VIX popped then leaked back to credit/equity fair-value before jumping again into the close and the disconnection between stocks and risk-assets is highlighted by the drop off in correlation (lower right) between the markets - as we assume front-running the front-runners into month-end with NFP tomorrow left a few more nervous than normal...
and for those wondering why Facebook surged today - between the volume - which was huge and the fact that we ripped and stopped perfectly at Tueasday's closing VWAP - we suspect it was algos enabling a broad-based selling into some multi-day VWAP into month-end - coincidence?
Charts: Bloomberg and Capital Context
Bonus Chart: Via Bloomberg's Chart of the Day today - the 200-day correlation between Commodities and MSCI World Stocks is nearing record highs once again and as is clear - the world appears to have become more and more interconnected (hhmm, central banks footprints)...
And Bonus 2: those hoping to sucker in gullible traders may be out of a job: yesterday saw the 14th consecutive week of equity fund outflows as the redemptions accelerate ever more, with the weekly outflow the second highest in 2012 to date. Year to date $53 billion has been pulled from domestic equity mutual funds. For the same period in 2011? $4 billion.
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Oilpeak hoax gets torpedoed:
http://business.financialpost.com/2012/02/27/repsol-sinopec-make-big-oil...
“Using the same ratio between the oil column size and the recoverable recourses, the estimated size of (the find) is in excess of 500 million boe,” Teodor Sveen Nilsen, an analyst at Oslo-based firm Swedbank First Securities, wrote in a note to clients.
Do you even have a clue as to what is Peak Oil? I doubt it.
That's just one of a myriad of new finds.
10 billion bbl oilfield in the Caspian Sea:
http://www.ogj.com/articles/2012/05/iran-giant-caspian-deepwater-oil-fin...
"Iran has claimed to have made a discovery of as much as 10 billion bbl of oil offshore in the Caspian Sea, but few details have been disclosed."
Peak Oil? Bigoil shills want to scare you into getting used to "higher oil prices" because of "biotic oil running out, as there was a finite number of dinosaurs". Oil price certainly went up today, didn't it?
Get back to me when the oil is proven rather than indicated and the type of crude and what the cost of production will be in actual dollars on a per barrel basis.
Nice try.
There are loads of oil available....some in places you have no idea about.
Case in point. The Paris basin. Over 60 BILLION bbl.
http://agmetalminer.com/2009/12/31/france-to-unlock-dirty-oil-under-pari...
"Meanwhile Toreador estimates there is the equivalent of 65 billion barrels of oil lying locked in the rocks of the Paris Basin, almost twice the total level of reserves held by Nigeria, Africa’s largest oil producer, at 36 billion barrels."
Time to liberate France again and turn the Eiffel tower into it's intended use: an oiltower!
Peak Theory is simply that exponential growth cannot continue forever, and that production tends to form a bell curve.
The original Projected Peak may not be accurate, as there are new discoveries; however, there is also lag time for a new oil find to be developed, and production rates are what matters: FLOW not STOCK. The new wells have to produce enough oil to exceed the decline rate of existing wells.
In order for Peak Oil Theory to be disproved, you would have to prove that oil production can continue to grow at 7 percent compounding annually forever. Do you believe that oil production can equal the entire mass of the planet Earth, every single day, by 2430?
The Paris basin??
Craig Mackenzie, chief executive of the Dallas based Toreador Resources is reported as saying the company wants to start drilling three pilot wells early in 2010, at a cost of US$30million, and to be producing oil from them by the end of the year. regarding those
that article was from 12/09. Got anything a bit more recent?
Hell, maybe he can actually, get a job working on the rig and find out directly. What, am I being too optimistic?
"Iran has claimed to have made a discovery of as much as 10 billion bbl of oil offshore in the Caspian Sea"
Bye-bye Caspian caviar.
Yes, it's an engineering model misapplied to worldwide and regional petrolium reserve estimates.
Misapplied and misued by neo-malthusians who are apparently unwilling to acknowledge that technology advances faster than their masterbatorial doom fantasies.
That about the sound of it?
That reminds me, where are those thorium reactors that I ordered? It is an oil economy, period, and oil production has been flat, while demand and population continues to grow, FAIL. Keep smoking that hopium pipe, I am sure everyone's quality of life will only get better. The laws of thermodymics are what they are, deal with it. I am sure there will be plenty of capital and resources to make the necessary investments that are required for the unknown innovations you speak of. I mean, there certainly hasn't been any resource or capital mis-allocation or mal-investment lately, nope, none at all. < sarc off >
Actually, total global demand is falling faster than supply, which is why the price of oil is falling. This is because we are in a real (but not technical) depression.
If demand was flat, oil would be soaring. If Demand was still growing at the rate it had been up into 2007, the prices would be rocketing up up and away until demand fell off due to being unaffordable.
A big part of this recent price rise is USD devaluation from all the money printing, which seems to have abaited for a little while. Also, geopolitically, it looks like war with Iran has been post-poned until at least after the election. On top of all this, due to the wonders of ZIRP, production of oil and gas, particularly in the US of A, is being done at close to or even below the break-even point as companies recklessly borrow to drill more and more wells faster and faster.
EDIT: and I forgot to mention, Europeans are probably using a little less oil this year, particularly in Greece, maybe Ireland and Spain.
Wow, based on the "estimate" that will last the world about a week. good news indeed.
You're in for a world of hurt, boy.
Paris basin oilfied will come online when europe spirals into chaos.
It's the only way they'll be able to survive, as no one will take their money and no one will extend them any credit.
LMFAO!!!! Yeah, I'm hurting. Your trolling was considerably better about a month ago.
Math is hard, give him a break. Maybe he thinks math only to apples and oranges.
Let me help.
Jimmy found 500 million apples in the ground, the entire world eats 80 million apples a day so for how many days can Jimmy sell apples to the world.
Jimmy gets to sell all the apples to the world for 6 and 1/4 days.
So we get to enjoy one more week before Jimmy needs to find more apples.
Math is hard!!!!!!!!!!!!!
Wake me up when someone finds 6.0 billion recoverable spiting up out of the hole and not in a spreadsheet. It will take a century to wind down fossil dependance without bloodshed. Anything less is not, as correctly noted, PeakOil but is actually PeakPeople.
Well said! Do you think he knows that "Excel" is not an Oil Company?
Just for everyone's reference, energy guys talk about OOIP (Original Oil In Place). That's the amount of biotic oil thought to have existed before the start of the Oil Age. That estimate has increased over time, of course, as new finds get made, but the rate of increase in OOIP estimates has slowed dramatically in the last few decades as fewer and fewer Giant and Super-Giant finds get made.
Roughly speaking, primary and secondary production of a normal oilfield will result in about 1/3 of the OOIP of that field being extracted economically. Primary production uses the natural pressure of an oil reservoir, secondary production uses techniques like water sweeping.
Soooo, a little more tough math. OOIP for the whole globe is thought to be 6.6 Trillion barrels. 1/3 of 6.6 Trillion is 2.2 Trillion barrels. In other words, the recoverable portion of OOIP is about 2.2 Trillion barrels. Since we've burned about 1.1 Trillion barrels since the dawn of the Oil Age, we're halfway through recoverable oil. Peak Theory says that the maximum production rate of a resource occurs when half of that resource has been consumed. And we have roughly plateau'ed in daily global oil production, at ~85 Million barrels a day.
So our current oil production and historical consumption numbers tend to support the notion that Peak Oil is occuring now, or will occur in the next 5 years. That doesn't mean that we run out of oil, it means that the production rate has peaked. In fact, even after we burn the remaining 1.1 Trillion barrels of conventionally recoverable oil we'll still have 4.4 Trillion more in the ground. Unfortunately, the 4.4 Trillion barrels will be far more physically difficult and expensive to recover, and will have a much lower Energy Return Ratio.
Our society doesn't just depend on oil, it has embedded in it at every level assumptions about the price of oil. Oil slowly working its way up to 8-10 dollars is a given. How we respond is the big unknown.
"Torpedoed" huh?
You do realize that this "big find" would run the US for MAYBE 25 days (we consume about 20 million barrels a day here in the US alone according to the CIA factbook)
So I guess they they gonna have to find at least 15 more of these this year...just to meet OUR continued demand.
Furhtermore, I don't think "peak oil" means we are running completely out of oil...theres still a shit load of it out there - somewhere. But when you have to drill in 5000 - 15000 feet of water to look for the stuff...that tells me that the easy, cheap oil, low-hanging fruit has already been plucked....or else they would not be taking the risk.
Deepwater wells, tar sands, etc, etc, etc....all have horrible energy returns on energy investments....this aint the 1920's in texas anymore where you can literally drill a hole in the ground and watch as oil shoots 100 feet in the air. And they are not finding any real "BIG" oil fields like the ones they found in the 30's-40's in the middle east. Tust me...the oil companies know where to look too....they are not just driving around the globe poking holes in the ground and hoping to get lucky.
There is still ALOT of oil out there...but there is just not a lot of cheap, east to get at oil. And there lies the problem and the thesis behind "peak oil"
So, don't get it confused - "Peak oil" doesnt' mean we are gonna run out in 10 years....like there won't be any at all. It just means we are on the downslope of production - that is all.
And the problem with running out of CHEAP OIL is that once we run out of the cheap stuff, the harder it is going to be to continue the ponzi. Oil is the ultimate currency...it is the one thing that makes all growth and wealth creation possible (more than anything else anyway)
So, you can keep denying that there is any issue with oil and it's supply....and keep thinking short term....but at some point, we are either gonna have to figure out some way to get away from that shit and find a power source that is sustainable for the long term (1000's of years) or be prepared for a future full of increases strife, wars, and volitle price fluctuations in everything that makes the way of life all of us have grown up knowing nearly impossible.
What was that supposed to be about? Making sense or something?
Forget it pal. Try a Yahoo group. Around here anything scary is a hoax and stays that way.
Yeah I know....
Sorry about that.
I gott remind myself that more often than not, a person'a political or philosophical ideology can get in the way of reason...
PeakOil isn't even a matter of philosophy. If the projections for production fail are even close then most of the people alive today will eventually have to deal with the fallout personally. I'm old enough to have personal memories (as a kid) of the lines extending for 6 blocks outside service stations when the Arabs cut us off. And that was before the whole dual-income suburbia thing had any traction. Now nobody is home to tend to things and people work 50 miles from where they live? Uh yeah that's really going to work out when you can only buy gas 5 gallons at a time and only every other day.
Max pain. Nobody wants to look at it. Much better if the whole thing is a hoax. That's the ticket, yeah.
"PeakOil isn't even a matter of philosophy. If the projections for production fail are even close then most of the people alive today will eventually have to deal with the fallout personally. I'm old enough to have personal memories (as a kid) of the lines extending for 6 blocks outside service stations when the Arabs cut us off. And that was before the whole dual-income suburbia thing had any traction. Now nobody is home to tend to things and people work 50 miles from where they live? Uh yeah that's really going to work out when you can only buy gas 5 gallons at a time and only every other day. Max pain. Nobody wants to look at it. Much better if the whole thing is a hoax. That's the ticket, yeah."
Oil spikes 70s were about US position viz Israel & Yom Kippur War. Shortage was caused by OPEC political embargo.
I said it was the Arabs did it. I implied we may be headed for more of the same, shortly. The OPEC thing is as close as we've been to "no gas for you today".
"Oil spikes 70s were about US position viz Israel & Yom Kippur War. Shortage was caused by OPEC political embargo."
But how did America go from being the provider for most of the oil in the world, to being totally dependant on the Arabs?
American oil production peaked ~1971, that's how. Domestic supply fell while demand continued to grow.
The Careless Whisper "Are You Effin' Kidding Me" News Update & Threadjacking
Manhattan D.A. Files Criminal Indictments Against 19 Alleging Fraud Over Abacus Scheme
http://tinyurl.com/cbuyhye
Cyrus Vance Jr.
Cyrus "In Order to Allege Rape, the Alleged Victim Needs to Be a Nice Person" Vance, Jr.
The markets have become a series of collateral chains that lead to vaporware. All this money printing yet the beveridge curve shows it's not helping to close structural unemployment gap.
Trickle down--tears. Bankers get fat bonuses from Central bank intervention. While others get foodstamp handouts.
OT - but does "Maria" ever listen to the responses to her questions or does she just try to score for her view? Annoying but predictable.
Unicorn tears? Did they run out of farts already?
What next? They cry skittles rather than poop those rainbow colors?
The strung out junkie is getting dangerous. Where are the men with the white coats?
Watching gay midget tranny porn.
they are the agents, bookies, lobbyists, pimps and procurers for the strung out junkies.
Well somebody is sure behaving strangely of late:
http://madscienceunlimited.com/fiction/thisHeartOfGold.html
Yes it's new fiction! Diamond gets some hot action, learns about Fascism, receives some shiny all her own, and tries (and fails) to help her sister manage her boobs. And little Fortran deep-throats Hitler in a Goth club! With a very special guest appeance by everyone's favorites ... Tyler and Marla! There's probably something for everyone in this fast paced, fun packed adventure, including the end of the world as we know it! Brought to you today by the letters "fuck" and "you", and the number "69".
Only at Zerohedge.
Very nice. Something to read after Mrs Cog and I spend some quality time together. :)
Apprently watching golden shower, tranny, midget, fisting porn at the SEC?
Ummmm...a slightly difficult trading session :)
Nice job with the super computers co located in the room next to where Duncan Niederauer takes his afternoon crap! Nice Pachinko machine wasteland these TBTF banks have created...with Ben Bernanke's help.
They had to throw all law, logic, and common sense decency to the winds and just rush in and pump their precious markets so their precious banks and corporations could 'survive' and the spice would keep flowing....ignoring the reality that in doing so theyve completely ruined markets for generations. Nice going egghead brainiacs, you've completely killed the goose that ever laid a golden egg.
Indeed Dog, and they will make it worse tomorrow, with volatility around "bad news is good" on employment report and the promise that Ben Bernanke will rescue them again...and I am beginning to believe he will do just that.
I took a gold position, and I took a pharma postion early this morning, both deep value plays...and I have confidence in neither. Not because I think the tickers are wrong...but because there is simply zero price discovery in this broken market. These algo guys need to be rounded up and dispatched from the market...and this needs to happen now.
You would think the price action in the exchange stocks would have made this clear by now.
Heres a bunch of 'algo guys' here Cdad....or as Church St boxing gym coach Eric Kelly calls them 'Miscreant nerd pieces of shit wusses'
Boxing Coach Eric Kelly Would Call Wall Street Clients ‘Fucking Nerd Piece of Shit Miscreants’ Even If He Wasn’t Getting Paid « Dealbreaker: Wall Street Insider – Financial News, Headlines, Commentary and Analysis – Hedge Funds, Private Equity, Banks
'Yea, they may work and and make money on Wall St, but in their mouths is where all the balls meet'
I feel like a total asshole and second guess everything I'm doing given the lack of price discoverability in the market... if I waited for nobrainer deals to come along, I'd get raped by inflation (still getting raped, but I can dream right?). As it stands, the only thing I care to do is invest locally, with things I know... and to leave the paper game and the markets the hell alone. I will never voluntarily return.
All eCONomies are local and becoming more local by the minute. Sounds like a good plan to me.
I could not understand the parts about the algos triggering selling and causing the index to rise?
No, no, it seems you understand just fine.
Appears to be in, or very close to, the Death Spiral. It's getting harder and harder to control. Have to use super fast computers and rely on algos to wring evaporating profits out of a dried up onion.
Still, they cannot stop themselves. It's a one trick pony trying to do what it always has done.
Can't change course, can't reverse, just sail the Titanic at warp speed into the Iceberg that everyone can see.
MoFo'n bastards! They almost got me, as my SPY weekly puts went down BIG during the BS run-up. I added right to the peak, getting down as much as 5 gees. Then, she turned. Covered for $1200....and then went to change my undies.
Can Nanex figure out who caused a 10% rocket ship to Zuckerland this afternoon?
There must be internal chat of some company being bought out. Maybe tomorrow to cover the not terrible enough NFP print it is announced that Facefuck will buy RIM.
Stocks are an open container of plutonium. Nobody should go near them.
Facejock was trading at 26 and change...then cnbc had Morgan's ceo on and it shot back to the high 28's.....
Yeah, just coincidence....right.....
Buyout hype! Lets try that since the IPO hype fell flat on its face. We WILL Zucker in the retail sheeple, or we'll die trying!
Tyler,
"Gold remains the winner on the week (though down 0.6% - which still beats USD's 0.8% gain effect)"
I'm not sure how you arrived at these numbers, and suspect that if you could explain, myself and a few other people would learn something useful. Thanks.
DXY goes up, everything goes down, gold just wen't down less.
(Now if the DXY and my wife were inverse correlated, all would be well in happypants land...... )
:)
If the market crashes and no-one cares does it make a sound?
Ha trick question.
The market cannot crash ever until someone actually cares. And then, it sounds like someone taking a crap in a blender set to "frappe"
You thought you had me, but I winned you.
No audible sound, though Romney may elect to serve as the market's ventriloquist . . .
HOLD UP! THREE TOP STORIES!
EDWARDS JURY DEADLOCKED!
HOUSE VOTES DOWN SEX SELECTIVE ABORTION BAN!!
COURT FINDS DEFENSE OF MARRIGE ACT UNCONSTITUTIONAL!!!
THIS COUNTRY IS FUCKED UP!!!!
WE ARE ALL FUCKED!!!!!
NONE OF THIS FINANCIAL SHIT MATTERS!!!!!!!!!!!!!
At least the spouses of zombies won't have inheritance problems.
Actually, Edwards found not guilty. Because, you know, politicians are never guilty of anything.
Edwards/Gingrich 2016
You're not going to get that pony this year either.
why not? They both have ugly mistresses. You'd think with all that money they could get laid by a nice looking babe.
"you play this bastard smart and they cant take it away from you."- Cinderella Man
http://youtu.be/eR1ufEGavs0
VIX VapoRub - smear it all over your chest to relieve pain and congestion
The shelf life for rumors ramping up is decreasing. Look for more rumors tomorrow - at least 1 per hour.
I can give you the ones ahead of time.
Job numbers are cloudy - some good and some bad.
Greece will be bailed out no matter who wins.
Spain will be bailed out no matter what by the IMF.
Facebook's drop was caused by a bad computer stroke. It's all fixed now.
ECB will now guarantee all deposits in all countries no matter what the amount.
Zero hedge is under investigation for telling the truth.
The FED is surely going to do QE3 very soon.
So Tyler 'QE3-4-5-NEW' still 100% assured? Sure seems to me theyre shying away from it as hard as they can! I mean, if theyre really on the path to unleash the Big QE beast, then why not let markets fall today 5%? Whats with all the desperation stick saves? If they want to do it, then theres no time like the present right? I'd think if they were on this QEeasing path then they'd want to do it quickly now, rather than wait for a very messy late summer or fall.
We have absolutely no idea what their timetable is. If we do, you can bet it's a set up. Meanwhile they have to keep these pigs flying in an effort to transfer even more of the wealth to their hands.
A set up as big and successful as the FB IPO? Yea these people are obviously real masterminds, sure. They know 1 thing, add fake money to fake stocks to solve nothing, just make things worse. Thats ALL they can possibly do.
Why are computers buying fairly-valued to over-valued stocks into a looming recession (2013)? That is buggy programming at its finest.
Another gullible trader.
http://www.youtube.com/watch?v=zWpzxzDGxr0
Alright, could somebody explain what VWAP stands for?
It's either "Volume Weighted Average Price" or "Veers Where Algos Prefer"
"Gold remains the winner on the week"
I would say the US$ is the winner of the week, not gold. Gold is falling again today ...
Bigfoot can't dance.
Did Morgan Stanley traders purchase FB so that the CEO looks good during the inverveiw with Maria Bartoromo just after the closing bell?
FB has 2.14 billion shares outstanding? Wow... and $29 something a share? 2.14 billion shares... Hedgies ramping FB to wipe out puts? Hmm...
The purchase of about $450 million worth of shares moved the price up.
"Gold remains the winner on the week (though down 0.6%..."
this is like Bloomberg reporting, where up is down and down looks like up to their reporters yes?