This page has been archived and commenting is disabled.

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.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 04/26/2012 - 14:28 | Link to Comment bankonthebust
bankonthebust's picture

Must.. Finish.. Month.. Green

Thu, 04/26/2012 - 14:38 | Link to Comment crzyhun
crzyhun's picture

BTW where did putin his wife??

Thu, 04/26/2012 - 14:43 | Link to Comment SilverTree
SilverTree's picture

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

Thu, 04/26/2012 - 15:07 | Link to Comment derek_vineyard
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?)

Thu, 04/26/2012 - 14:55 | Link to Comment Randall Cabot
Randall Cabot's picture

I suspect that the breaking news from Joe Biden has something to do with the meltup:

http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/biden-president-has-big-stick/504561

Thu, 04/26/2012 - 16:35 | Link to Comment lemonobrien
lemonobrien's picture

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

Thu, 04/26/2012 - 16:44 | Link to Comment midtowng
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.

Thu, 04/26/2012 - 14:30 | Link to Comment catladdy
catladdy's picture

Equity short evisceration, orchiectomy

Thu, 04/26/2012 - 14:39 | Link to Comment Spider
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)

Thu, 04/26/2012 - 14:30 | Link to Comment Everybodys All ...
Everybodys All American's picture

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

Thu, 04/26/2012 - 14:31 | Link to Comment Everybodys All ...
Everybodys All American's picture

CNBC playing games. What else is there to do?

Thu, 04/26/2012 - 14:52 | Link to Comment derek_vineyard
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?????

Thu, 04/26/2012 - 14:53 | Link to Comment Everybodys All ...
Everybodys All American's picture

Sellout.

Thu, 04/26/2012 - 14:55 | Link to Comment derek_vineyard
derek_vineyard's picture

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

Thu, 04/26/2012 - 16:39 | Link to Comment lemonobrien
lemonobrien's picture

everyone has their price.

Fri, 04/27/2012 - 11:13 | Link to Comment Hugh_Jorgan
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...

Thu, 04/26/2012 - 14:45 | Link to Comment Piranhanoia
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.

Thu, 04/26/2012 - 15:43 | Link to Comment LongSoupLine
LongSoupLine's picture

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

Thu, 04/26/2012 - 14:31 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Buck Fernankie!

Thu, 04/26/2012 - 14:36 | Link to Comment optimator
optimator's picture

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

Thu, 04/26/2012 - 14:33 | Link to Comment SheepDog-One
SheepDog-One's picture

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

Thu, 04/26/2012 - 14:38 | Link to Comment Everybodys All ...
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.

Thu, 04/26/2012 - 14:46 | Link to Comment CrashisOptimistic
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.

Thu, 04/26/2012 - 14:54 | Link to Comment youngman
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"

Thu, 04/26/2012 - 15:14 | Link to Comment derek_vineyard
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

Thu, 04/26/2012 - 15:20 | Link to Comment Everybodys All ...
Everybodys All American's picture

mutual funds had inflows? Which two?

Thu, 04/26/2012 - 16:19 | Link to Comment CrashisOptimistic
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.

Thu, 04/26/2012 - 16:32 | Link to Comment HedgeOn
HedgeOn's picture

at least someone gets it

 

Thu, 04/26/2012 - 16:46 | Link to Comment Everybodys All ...
Everybodys All American's picture

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

Thu, 04/26/2012 - 14:59 | Link to Comment Everybodys All ...
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.

Thu, 04/26/2012 - 15:45 | Link to Comment LongSoupLine
LongSoupLine's picture

 

 

The next downgrade will be followed minutes later by....an SEC lawsuit.

Thu, 04/26/2012 - 14:52 | Link to Comment Village Smithy
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.

Thu, 04/26/2012 - 14:55 | Link to Comment Dr. Engali
Dr. Engali's picture

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

Thu, 04/26/2012 - 15:00 | Link to Comment Everybodys All ...
Everybodys All American's picture

We'll see.

Thu, 04/26/2012 - 14:34 | Link to Comment optimator
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.

Thu, 04/26/2012 - 14:40 | Link to Comment Dr. Engali
Dr. Engali's picture

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

Thu, 04/26/2012 - 14:36 | Link to Comment TradingJoe
TradingJoe's picture

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

Thu, 04/26/2012 - 14:41 | Link to Comment LongBalls
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,........

Thu, 04/26/2012 - 15:02 | Link to Comment optimator
optimator's picture

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

Thu, 04/26/2012 - 14:40 | Link to Comment catladdy
catladdy's picture

Equities assisted by short troubadors

Thu, 04/26/2012 - 14:41 | Link to Comment Liquid Courage
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?

Thu, 04/26/2012 - 14:41 | Link to Comment crawl
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.

Thu, 04/26/2012 - 14:45 | Link to Comment HarryM
HarryM's picture

growing very very weary

 

Does this train ever stop?

Thu, 04/26/2012 - 15:20 | Link to Comment Tenshin Headache
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.

Thu, 04/26/2012 - 16:05 | Link to Comment Piranhanoia
Piranhanoia's picture

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

Thu, 04/26/2012 - 22:14 | Link to Comment JPM Hater001
JPM Hater001's picture

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

Thu, 04/26/2012 - 14:41 | Link to Comment Aductor
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.

Thu, 04/26/2012 - 14:41 | Link to Comment e92335i08
e92335i08's picture

TYLER POST CAPITAL CONTEXTS MODEL LOOK AT THE SPREAD!!!! ITS HUGE!

Thu, 04/26/2012 - 14:42 | Link to Comment Dr. Engali
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.

Thu, 04/26/2012 - 14:43 | Link to Comment vigged6
vigged6's picture

Tyler – The FED is continually managing the stock market. It has become it’s only saving grace with inflation at running at two percent. All you have to do is look at the recent data on the clevland Fed’s website entitled Credit easing tools – http://www.clevelandfed.org/research/Data/Credit_Easing/index.cfm. At the recent turning points of the market the Fed announced (or did not in the case of MBS) and then increased its balance sheet and the monetary base through it’s mechanisms.

In november they announced the currency swaps (turning point in stock market) and then the swaps blasted off (going from 1 to 110 billion in a heartbeat) while simultaneously juicing MBS holdings 20 billion in early January – both juiced the market near lows.

Most recently the Fed injected a quick 24 billion of MBS expansion last week at the turning point of the recent decline.

I can find absolutely no correlation in the schedule of purchases – http://www.newyorkfed.org/markets/ambs/ to when the balance sheet increases and decreases. The FED is using this tool to inject high powered money into the system when the market suffers a downdraft.

Additionally the fed’s “other assets” (whatever that is) balance sheet is almost a mirror image of the stock market rise from 2009 – http://www.clevelandfed.org/research/Data/Credit_Easing/index.cfm (click on other assets)

When the FED is increasing the balance sheet and thus the monetary base they are directly trying to manage the stock market. The correlation market lows is too high for it not to be the case.

Thu, 04/26/2012 - 14:53 | Link to Comment SheepDog-One
SheepDog-One's picture

Theyre TRYING to manage the stock market? LOL the FED is the only one IN the stock market.

Thu, 04/26/2012 - 14:43 | Link to Comment TradingJoe
TradingJoe's picture

One "fine" day, this "market" will get a colonoscopy, not even the PrintOid can't escape from! heheheh

Thu, 04/26/2012 - 14:51 | Link to Comment HarryM
HarryM's picture

I just hope I live long enough to see it

Thu, 04/26/2012 - 14:44 | Link to Comment CryingBear
CryingBear's picture

why is AAPL not green?

Thu, 04/26/2012 - 15:01 | Link to Comment HarryM
HarryM's picture

Had that discussion with 2 fund managers I know - After the recent drop , they got a taste of what can happen real quick.

They are a little more cautious and cut back exposure.

Thu, 04/26/2012 - 14:44 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

Reggie on CNBC right now!!  Hilarious.

Thu, 04/26/2012 - 14:52 | Link to Comment barliman
barliman's picture

 

Patience

The Zen path is to wait and go with the flow of the river ... not to fight against it.

We had almost ten trading days when SHORTING AAPL should have made you a BUNDLE of money ...

The next set of opportunities are likely to be broader and longer lasting.  AAPL straddle trade mentioned by Liquid Courage should target May - June for my money.

barliman

Thu, 04/26/2012 - 14:56 | Link to Comment LouisDega
LouisDega's picture

Are those solar flares on the bottom of the second chart? Very pretty. Love that hot red.

Thu, 04/26/2012 - 15:13 | Link to Comment Bastiat009
Bastiat009's picture

"Gold has been relatively outperforming today ..."

Gold is not outperforming anything ... stocks, euro and US$ is what you need. What else?

ok, ok, I am kidding but it's still a fact.

Thu, 04/26/2012 - 15:40 | Link to Comment poor fella
poor fella's picture

According to Bloomberg, it's market Resilience (yes, again)

*sure* - as volume abolutely collapses. The ramp job is so transparent, if it was due to human 'error' they should be embarrased. It used to cost money to push markets around.

Thu, 04/26/2012 - 15:22 | Link to Comment catladdy
catladdy's picture

Today's equity action smells like some funds got caught overleveraged on the short side vs someone w unlimited funds

Thu, 04/26/2012 - 15:29 | Link to Comment Everybodys All ...
Everybodys All American's picture

nah ... not near enough volume for that conclusion.

Thu, 04/26/2012 - 15:33 | Link to Comment poor fella
poor fella's picture

Possibly a GDP # leak? Maybe it's been managed to a 4-handle?

Thu, 04/26/2012 - 15:42 | Link to Comment Village Smithy
Village Smithy's picture

Possibly the PD's robbing short positions in preparation for GDP miss.

Thu, 04/26/2012 - 15:31 | Link to Comment Silversem
Silversem's picture

Goldstocks must be close to the bottom right now. Junior goldmining shares and shares of explorationcompanies are going sky high when sentiment turns in theire favour.

It would also be profitable to play a rising gold- and silverprice with cfd's (contract for difference). I love this instrument becouse it is so easy to use.

Thu, 04/26/2012 - 15:43 | Link to Comment CryingBear
CryingBear's picture

gold and silver are in secular bear markets

Thu, 04/26/2012 - 15:49 | Link to Comment q99x2
q99x2's picture

Help an algo just crawled out of my computer.

Thu, 04/26/2012 - 16:06 | Link to Comment Piranhanoia
Piranhanoia's picture

feed it a Krugmanerrand.

Thu, 04/26/2012 - 15:53 | Link to Comment MarsInScorpio
MarsInScorpio's picture

Before I had the audacity to post something on ZH, I read it daily - almost hourly, for the past year. It is without a doubt one of the most brilliant sites on the internet. It is a privilege beyond description to be among you.

 

But something puzzles me: Why is it that so many know the market is rigged (it is), that the top .1% and the insider banking establishments including the FED (by virtue of printing it without limits) have all the money, that algos, with their genetic perversion HFT, rule the ups and downs without meaningful human interaction or supervision (who can supervise nanosecond transactions?), and yet, knowing all this, so many expect the world of finance to adhere to any form of fundamentals concerning liquidity, debt, profitability, payrolls, disposable income - and all the other things that prior to this time in history once mattered in determining the course of financial events?

 

It seems that there comes a point that so many need to ask themselves if what they think determines the financial future, really does anymore?

 

Tell me, who exactly is going to foreclose on the White House if the debt ratio to GDP reaches 1-zillion percent? Ultimately, who is the collection agency when any country won't pay its debts? And from today's run-up of the stock market, do algos really care about reality if headlines and the printing presses can keep the good news coming, and the self-reinforcing buy, buy, buy, pushes stocks up without any relationship to anything other than the actions of other algos?

 

Before you tell me how wrong I am, ask yourself these questions: Are we now in a totally different financial world where nothing that mattered before matters any more? Have the computers taken over and left the concerns of humans behind? Has wealth become (or is becoming) so concentrated in so few hands that what the other 99% does (employment, savings, disposible income, investments, and so on) isn't enough to really influence what matters to that top .1% and the insider financial firms, and therefore it doesn't predict the future?

 

I'm looking to see what you have to say - and hoping that there will be some thought put into the answers I read. When nothing goes the way it is supposed to go - economic collapse put off endlessly in this case - maybe the world doesn't exist the way the predictions premise it exists . . . and maybe that's why the world isn't doing what it is supposed to do.

-30-

Thu, 04/26/2012 - 16:16 | Link to Comment Piranhanoia
Piranhanoia's picture

The facts of what those that spend the tax money do are intolerable, those in charge know it is ending, and they will disappear with their profits.   We are on our own.

Fri, 04/27/2012 - 00:04 | Link to Comment brettd
brettd's picture

Here are some reflections for you from a relatively new "interested-amature" ZH fan:

 

I come to ZH for comfort, not stock picks.  There is comfort in companionship:  However flawed her companions, Dorothy didn't make the journey to OZ alone.

Forclosing on the White house is a fun image.  The reality is that 9 out of 10 states in America run reasonably well---balanced budgets providing basic services to their citizens.  Washington may be screwed up, but America as a whole, isn't. 

 

In your second-to-last-paragraph, you talk about the 99% not having any influence.  Do they want influence?  There are 10,000 people tonight on ZH.  There are 30 million people watching Dancing with the Stars.  I'm here with you and I don't want influence.  i don't want the stress and burden of people looking to me to make their lives better.  I'm just here trying to ski ahead of the avalanche I see coming.

Out of the millions of Jews/Gypsies/Homosexuals in Europe who watched Hitlers slow, deadly rise to power, how many got out? Perhaps one in a thousand.

Remember not to conflate "the market" with "the (USA) economy."  There are about 5 million businesses in the USA. Only one-in-one thousand of those businesses are listed on the exchanges.

In your final paragraph you say "...the world isn't doing what it's supposed to do."  Alas, "the world" or "society" is made up human beans, who all make up their own rule book.  That's why governing well is so very difficult...and why this ZH reader believes the best government is the one which governs least. Most of us go through hell organizing a family outing...what makes us think we can manage the lives of millions of people that we don't know?

And finally, ZH provides a bullhorn of alarm for people like you and me.  I hear in your tone a fear and confusion about "the markets" which is shared by many of us.  So get out!  There's lots of people out there going to PM, real estate, antiques, art, cash or whatever....If you feel like the game is rigged, cash in your chips and leave the table. If your spirit is screaming "get out" and you still sit at the table, you are not respecting your own risk tolerance and are flirting with disaster.

I hope you thrive in these difficult times.

 

Fri, 04/27/2012 - 14:57 | Link to Comment MarsInScorpio
MarsInScorpio's picture

Thank you for your thoughtful, and courteous comments!!

-30-

Thu, 04/26/2012 - 19:34 | Link to Comment mademesmile
mademesmile's picture

Maybe the Looney Toons World was a preview. Wile E. Coyote, "Super Genius" ran off a few cliffs before gravity took over. Paper will become paper once people start looking down.

Tue, 05/01/2012 - 00:13 | Link to Comment Bizaro World
Bizaro World's picture

Tyler, I had to search a while to find this post where you borrowed my tag line while i waited the 4 day registration period, but I accept it as entrance fee.....thanks for the financial awakening and being one of the few sources of financial truth....keep up the good work.

Bizaro World
(eyes open)

Fri, 06/29/2012 - 01:46 | Link to Comment Cristy
Cristy's picture

 It's time you stick to the events underway in the market, such as saying this post and Albury Motel

Do NOT follow this link or you will be banned from the site!