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Market Snapshot: Reverse
It has been an extremely volatile start to the US day session as QE3 rumors and Oil geo-political concerns set the markets on fire only for denials and Merkel's straight talk to dash those hopes. EURUSD is 180 pips off its earlier highs having broken through 1.31 to 11 month lows. European credits are rolling over rapidly (especially financials and XOver) as are US credit and equity markets with financials, tech, and consumer discretionary now in the red on the day. HYG is selling off tick for tick with the broad equity and credit markets which is what we were concerned about yesterday with its impact on secondary bonds if we see outflows. Commodities have continued their week of chaos with Oil having retraced about 50% of its spike but Gold and Silver now significantly below the pre-QE3-rumor levels (down over 3% on the week).
Commodities seem to have given up hope of Bernanke dropping more QE3 hints today and are taking their lead from the EUR weakness (USD strength). Oil has only retraced half of its spike - which makes some sense as the threat to close the Strait of Hormuz should put some extra premium into the energy segment (though it has lost $100).
EURUSD is being hit hard on Merkel's comments (and is now2.25% lower on the week) but we note SEK is worst versus the USD -3.5% on the week now. JPY is best among the majors but still -0.32% on the week.
The US equity market is below its opening levels and it is Financials and Consumer Discretionary (Best Buy and Retail Sales disappointment) that are lagging out of the gate. Morgan Stanley, which popped on the MBIA settlement is now -4.4% from its opening level.
The spike in oil has pulled CONTEXT higher (bullishly biased versus ES) but it is pulling back lower as FX carry and commodities leak lower. Interestingly, TSYs are still generally higher in yield (though off their highest levels of the day), which is mildly supportive of a higher CONTEXT (and ES).
UPDATE: European credit closed very ugly with financials notably sold and diverging bearishly from stocks...
The light blue and black lines are sub financials and high yield credit legging wider into the close and even the lower cost investment grade and senior financials were dropping - even as the dark blue line inched higher (stocks).
Charts: Bloomberg
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These quick reversals are crazy. Too many reversals to keep track.
Pretty ease to tell these days.
Gold going up? Gold negative headline coming any minute now.
'Gold and silver down significantly..'
Whoops, spoke too soon. Thats volitility for ya. Will gold follow oil, or the Euro? Tune in this afternoon,
Calling all Goldbugs. Dennis 'Contrarian Indicator' Gartman just said the goldbull market is over, and this indicator was confirmed by fellow contrarian indicator John Nadler. Whew. we're gonna be OK...
Gartmans reasoning was 'China bought lots, it didnt move the price up. Ergo, we're in a bear market'. Gartman neglected to mention COMEX rapid fire margin increases, not-for-profit selling into the Globex afterhours, and the FED, BIS and BoE seen selling gold, but then such reasons dont play well into 30 second CNBC spots.
Smells like algo spirit - http://hedge.ly/s4D9iS
The one to watch is oil. It will shoot the moon eventually. Even without a meltdown in the Middle East, these low prices are completely unsustainable -- and it's only a matter of time before the Middle East melts down...
Guess I'm on a popo kick here but my feeling is that we have already double dipped and that leaves only the government
EUR-USD 1.30 is the financapocalypse line. If it breaks that level Brian Sack & PPT will starting bringing diapers to work every day.
http://twitter.com/#!/search/realtime/dirtyeuros
Media blackout becomes official?
Glimpse of Higgs Boson implies LHC accumulating billions of Higgs Boson, and the resulting effects on the Higgs Field, in our slice of hyperspace, until 2012, culminating in Terence McKenna's timewave zero: Dec 21. 2012
http://www.youtube.com/watch?v=q_36FF6z9cQ&feature=related
outlier frequency of sigma 6+ volatility in 2012 will break all VaR models.
What makes 1.30 a big deal? I heard the same thing about the 1.3425 level.
http://stockcharts.com/h-sc/ui?s=$xeu
click 2 year chart. 1.30 is the next major support.
Yeah, 1.29-30 seems critical.
The Euro is very bearish bt some dead cat bounces are to be expected.
100-110 would be excellent for the German economy and its important export industries.
It's a bit like Bugs Bunny drawing lines in the sand daring Yosemite Sam to cross...
Bernank bs dual mandate: inflation and unemployment. Both are not going to allow QE3. UE at 8.6 but theyll hint at QE? I doubt it.
'Hint at QE3' now simply means 'We got nothin....lets try that silly rumor to excite the robots again and save our sorry hides for 1 more day'.
ZIRP and recent swap window rule changes ARE QE!!!!! To infinity and beyond!!!
There is no need for QE3. The stock market is up, the price of govt. debt is slightly off a 100-year high. Financing govt. deficits is no problem at all. The Bernank will just repeat the usual mantra.
Next year the second half will save the day - the 11th year in a row.
What happened to gold?
At one time Yahoo has shown a december contract price of 1744
Gold Dec 11 (COMEX: GCZ11.CMX )
Day's Range:1,654.70 - 1,744.5
I hate to say it, but I warned people long ago that if youre looking at 5 minute gold chart activity, OR expecting gold and silver to behave counter to other totaly manipulated markets, youll be in the psych ward before long.
What happened to gold?
Nothing, because the only metric I worry about with gold is the height of my stack. :D
DISSOLVE THE EU (for economic growth): Let the nations default and the markets sort it out – Marc Faber
VIDEO on Rockwell: "Appearing on Fox Business, legendary investor Marc Faber discusses the on-going Euro-zone crisis. The problem is that nations do not want to give up their sovereignty and cannot agree to sticking to the 3% budget limits. He believes the best solution is to dissolve the EU, let the nations default, take their medicine and let the markets sort things out. Anything else will not work in the long term. Plus there's the added bonus of getting rid of all the useless bureaucrats in Brussels." (6:52)
http://lewrockwell.com/faber/faber123.html
On Amazon copies of Edwards and McGee also selling off and at all time lows.
So what you're saying is staring at chart patterns to 'predict' moves is now obsolete?
Gold only goes up accoring to ZH, never down
As i posted in post few days ago, I think Gold and Silver topped out
I was bullish the PM's too, but have switched gears, mind you i am not shorting them, but just think they have topped
So what are you long?
Thin cotton/linen rectangles..
Not long anything, just short the indexes and oil, am hurting on oil today, but i shorted oil higher at 102 a few weks ago
Fade the Iran bullshit, oil already has given up over 50% of spike
Anti-Faber it sounds like
'Topped' in what, dollars? What are you talking about?
SD1, in the face of the insanity we call markets today, it amazes me how quickly people forget the fundamentals. Let folks determine the "worth" of their PMs by watching a manipulated price in fiat. The proverbial light will turn back on when it is too late. Normalcy bias is a bitch.
Agree completely.
I always ask people that when they say it's "expensive" or "dropping" or a "bubble" just... normalcy bias much?
Once they start their inevitable run up everyone would swarm back in and be like "See, I'm glad I bought." but they probably didn't.
Have you ever seen what the top of a market looks like? There will be no top until it goes parabolic. If you can't descipher a top from a pull back then you need to just hand your cash over to Corzine right now, because somebody of his kind will end up with it anyway.
go look at a monthly 20 yr chart of Gold and tell me that aint parabolic. If that aint parabolic i dont kow what is.
Listen guys, i know EVERYONE on this site is bullish gold, that alone should make you question your posistion.
You keep thinking that way. I will keep buying on pull backs. I'll be sure to put a donation in the poor box for you in the future,
LOL LOL i aint even short PM's and I will end up in poor house?
One word of advice, when you get married to a posistion, like most people on this site sound like regarding PM's, I know it's time to get out.
We are at a critical juncture on the Dollar now. If the fed does come out with some dollar negative news and doesn't hold the breakout, it's potentially a bearish double top. The alternative is that it's a breakout. very important day.
Got some bigtime euro market intervention going on right now.
Every day now is just all-out emergency market-wide interventions...I say they cant keep this going for long at all.
So markets 'jumped' today on a vague 'QE3 rumor', only to be denied minutes later, and all the while markets COMPLETELY ignored the retail sales data faceplant, nevermind thats the Holy Grail economic number.
Bunch of BS.
got to keep in mind that retail is being supported by increase in sub-prime lending (govt once again destroying our future for short term gain). So even with this support in credit market, retail is still not doing well. this is very bearish....if not for seasonal manipulation it would be a great shorting opportunity.
So it will be 'QE rumors' daily followed by a denial from here on out? That means theyre just pumping to dump to any available sucker out there. When theyre done, look the hell out.
any1 got 3PM rumor ready?
We all should start a game of the next rumor and at what time.
Merkel knows how market would react so i assume it was done deliberatly.
Back it up Mike...Owwww watch the f%*king legs!
btfd
The Global Ponzi is coming to an end. The can has been kicked so many times now all that is left is a mere sliver of tin. Soon it will be nothing more then tin dust and the junkies will be on the ground snorting what's left of the metallic dust. Just ask Madoff how it feels? I'm sure he can tell you first hand how this is going to end. Hopefully we can at least have a peaceful holiday before the shock and awe false flag events start happening. You see, the options will soon turn to that of desperation, it is the only thing they have left.
XOver back to 800 on offer, was only a matter of time!
Do NOT underestimate the political and corrupted power and depth of the "Bonus Pool Trade".
These criminals will pull out all the stops from now until year end in order to ensure it's a festive holiday season at the vacation homes in the Hamptons and in the surrounding D.C. Potomac/Chesapeake waterfront estates. This has NOTHING to do with economics, charts, or otherwise.
Period!
"Bonus Pool Trade"
ROTFL!!! (it's funny 'cuz it's true)
Man...this all sure isnt doing much for the priced-in 'Santa rally'....which now has about 9 days to happen.
I imagine FT has some more juicy rumors of EU bailouts planned for release any day now.
Gold has 0 volatility against itself in real terms, except for the littel quantity produced every year. Now whatabout the dollar volatility against itself, in quantity produced? So instead of measuring Gold in Dollars, it would make more sense to measure the more volatile stuff (the Dollar) in terms of the less volatile stuff (the Gold). People were measuring everything in Gold terms in the old days. So one could actually compute if the Dollar goes up or down in any given day in Gold terms, that would make more sense.
If one would do that, one would realize that Dollar weakness during an undisturbed carry trade period, and that a shock would make the dollar go up temporarily in Gold terms when a shock is hitting the system. The time to acquire DOLLAR against GOLD will be when the dollar becomes cheap in Gold terms.
So which currency is cheap in Gold Terms, one could look at primary surplus, trade situation, Gov Debt to GDP, purchasing power parity, unit of of labor cost for equivalent jobs so on and so forth. There are many currencies which are cheaper than the Dollar in Gold terms using those parameters. Malaysian Ringgitt in cheaper in Gold Terms, Yuan despite Banking and property crisis is cheaper than Dollar in Gold terms.
A technical factor making the Dollar go Up in Gold terms does not make the currency fundamentally cheap. Given that the USD is very undesirable currency at this point.
DOLLAR IS STILL OVERVALUED COMPARED TO OTHER CURRENCIES IN GOLD TERMS.
Now is Gold overvalued against a basket of OECD, US and Japan currencies. Well it is hard to say, homes are probably not overvalued in Gold Terms, DOW is, Tobacco is still not overvalued in Gold Terms. We need the debt level to be seriously reduced to make fiat currencies desirable.
The question is: Is the Dollar a desirable currency. AND THE ANSWER IS A VERY CLEAR NO WAY! SO WHY SELL GOLD?
When treasuries, muni bonds become desirable in absolute term you can challenge teh case for Gold, we are very far away from that. We are only at the beginning of debt destruction.
Strange that the market has held up in the face of a sharp EURUSD decline and oil price jump.
HERE'S ANOTHER REVERSAL:
http://www.ipe.com/news/dnb-must-explain-itself-on-gold-divestment-order...