Market Meltup Meets Non-Farm-Payroll Resistance

Tyler Durden's picture

Just as we predicted this morning, as soon as Europe FX/Credit markets closed, US equities proceeded to meltup celebrating the claims data 'improvement week-over-week' in this bizarro world we live in. ES (the S&P 500 e-mini future) has broken up and out of its 3-week range to run the stops above the pre-Non-Farm-Payroll close levels from 4/5. Gold has been relatively outperforming today and on a beta-adjusted basis, the S&P has just melted up to meet Gold's enthusiasm. Ahead of tomorrow's GDP data, it seems the worst-case scenario (from a market meltup momentum perspective) is a small miss - not quite cool enough to kick Bernanke into QE action and not quite warm enough to juice the self-sustaining recovery bulls into action (especially as the earnings picture is starting to fade a little here). 1400 next? 1404 for April green? ES volume is considerably lighter than average once again - as it has been for the last 3 days of exuberance.

Stocks (blue) caught up to Gold's enthusiasm for money-printing hope immediatley after Europe closed - just as we predited this morning...

The day-sessions of the S&P 500 e-mini futures have been range-bouond for the three weeks since the dismal NFP print. Today's extension of hope for more QE has run up to that close, run the stops and pushed to the pre-close high volume dump level that we saw on 4/5 close.

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bankonthebust's picture

Must.. Finish.. Month.. Green

crzyhun's picture

BTW where did putin his wife??

SilverTree's picture

O-Blama is holding her hostage but will be allowed more flexibility after the elections.

derek_vineyard's picture

with equity market continuing its ascent, one would assume that bond yields would rise

1.96 ten year into a market near a new multi year high---too much fkn liquidity and nuttin to buy

the economy is soooooooo great and inflation so contained that stocks, bonds, commodities........... everything is UP  (why the fuck didn't apple invest its 110 billion into this stairway to financial heaven?)

lemonobrien's picture

Obama's got a big dick, so this is good for America, ans why we're number one.

midtowng's picture

Most likely the Fed leaked the GDP data to Wall Street insiders and told them it would be pretty strong. So the bankers bought today in anticipation of tomorrow's surge.

catladdy's picture

Equity short evisceration, orchiectomy

Spider's picture

Sorry guys this is in preparation for Japanese Central Bank Stimulus tonight/Friday morning.  Hopium that they do something massive... (which they might)

Everybodys All American's picture

No one working and no volume market. Same ole same.

Everybodys All American's picture

CNBC playing games. What else is there to do?

derek_vineyard's picture

reggie middleton posts here----he cant go LONG---sold out for the TV exposure (i guess i would too)

then he talked like a perma bull-----breaking the rules of fight club and his membership is revoked (he should have put a bear zinger into his commentary------like i'll go long and lose the the least)----but NO, he talked like a full on kool aid drinker

next stop an appearance with kramer

reggie's defection to the bull camp a sign of a top nearing?????

derek_vineyard's picture

once they get phoenix capital on the bull side the top will be confirmed

Hugh_Jorgan's picture

How is that? Where did you see Reggie changing to a perma-bull. Tell me it was more than one interview on CNBC...

Piranhanoia's picture

I had to watch it recently.  They forgot to cover 2 major stories that day.  They weren't good stories for hopey thingy.

LongSoupLine's picture

trust me...they didn't "forget".

optimator's picture

Or in other words, "Miss on you pister, go in your own jack yard and back off".

SheepDog-One's picture

Hope for more QE crack now drives the entire crackhead what a sad joke it all is.

Everybodys All American's picture

The sad reality is that any QE is another tax funded bailout. More bonds that we have to then pass on as debt obligations. Seriously, what the hell is Bernanke thinking? There is no way that S&P will not downgrade again if he goes there with more QE.

CrashisOptimistic's picture

There's a deeper issue.

The 10 year was 2.58% the day the S&P cut the US from AAA.

It's not 1.96%.

The credit ratings are ignored.  Therefore, they are no deterrence, and don't think this won't be prominent in the discussion of the 1 January tax issues.  They will not reduce the deficit.  Period.  And the lost credit rating will be ignored.

It's all disintegrating, but governments will intervene to be sure it doesn't matter.

youngman's picture

If you think "investors" are buying the bonds and care what the ratings are you are wrong....its all in house..or all under the table...there is no BOND "market"

derek_vineyard's picture

its liquidity.............way too much liquidity

mutual funds are required to buy bonds and they have had inflows......

your choice -----lose 2% a year to inflation holding a bond or go into the equity casino hoping you can bail before collapse

Everybodys All American's picture

mutual funds had inflows? Which two?

CrashisOptimistic's picture

But see, this is what ZH is missing.

You're not losing 2% a year.  

Bond yields declined by 23% from that date.  That means their value increased.  It's a 23% capital gain!  And there's a lot more to come.  Yields will fall as growth does.

Everybodys All American's picture

Interest Rates have to go negative for that kind of capital gain on yields to occur from here.

Everybodys All American's picture

The next downgrade will not be ignored as easily. Also, one rating agency (S&P) followed by many more. The games that are played by the bond market to keep these auctions in line are legendary. But it will not survive interest rate increases on a further cut. The market will correct this imo.

LongSoupLine's picture



The next downgrade will be followed minutes later SEC lawsuit.

Village Smithy's picture

I think that these ramps are less about QE and more about the relationship between ZIRP and HFT's. These algos can ramp the market up enough in a day, or at most 2, to pay all of the annual interest they owe on the money they borrowed for the ramp. What scares me is that the higher the market goes the more, on a percentage basis, it is made up of this digital money. That is going to lead to severe volatility. For now Bernanke doesn't care because it's all good for the wealth effect. To me this makes 1996's "irrational exhuberance" look conservative.

Dr. Engali's picture

Are you kidding? After what happened to Egan Jones? The Ratings agencies have been effectively neutered.

optimator's picture

I wonder what the maket would do if there was ever any GOOD NEWS?  It's been so long since we heard any I forget.

Dr. Engali's picture

Why it would go up of course. It's a one way ticket.

TradingJoe's picture

SPY(RoachMotel) a paltry 83M shares "traded" :))) mui locco!

LongBalls's picture

Nothing but QE let loose on the stock market. This is the Fed's version of trickle down that the investment banks can scalp. Unfortunatley, corporations are hording the cash and not hiring at a meaningful wage or way. And retail investors are not taking chances. How long can the Fed keep this liquidity from moving to input costs? T minus 5,4,3,........

optimator's picture

Those Corps, like Generous Electric, aren't Whoreding it all, they are using a portion to build plants overseas.

catladdy's picture

Equities assisted by short troubadors

Liquid Courage's picture

Haven't been doing much trading lately. Is it just me or does anyone else think AAPL might be a good candidate for an option straddle 'bout now? Say, 700 UP and 450 DOWN, June or July?

crawl's picture

A test of the recent ES high of 1420ish is a possibility tomorrow.

Being short in a manipulated market is deadly.

Bad news is good news, good news is good news too. And with the CB, there is no worries of a crash formerly known as a 0.5% decline.

HarryM's picture

growing very very weary


Does this train ever stop?

Tenshin Headache's picture

Sure! When it takes a turn just a little too fast, sails off the tracks and plummets into the ravine far below.

Piranhanoia's picture

There are no rails at the end of the line.  The stop will be unorganized.

JPM Hater001's picture

"Does this train ever stop?"
Yes. Auschuwitz.

Aductor's picture

This has been tradeable for some time now. US is obviously overflowing with hopium. No matter how much Europe is down, when US awakens, the rally continues. I salute those brave ones taking cues from the Great Chair. May you never face the real world.

e92335i08's picture


Dr. Engali's picture

I just got a breaking news message from CNBC on my phone...The message was :

The S&P hits 1400 for the first time since April 5th.

Now there is some important life altering news for you.