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One Explanation For Today's Irrational Exuberance
Since the EU-Summit, US and European equity markets have (in general) outperformed. From being in sync before the Summit, US equities went into the weekend with a sell-off, which then spurred a short-squeeze push as the S&P 500 was over-exuberant (relative to European equities) on the way up at the start of last week. That cracked back to reality at the end of last week - squeezing the over-levered longs to a significant underperformance relative to European equities. It would appear that in the last 24 hours, US equities are now rallying back to that European 'surreality'. Surreal because European stocks remain dramatically exuberant relative to European (peripheral spreads unch and AAA massively bid) and US (Treasuries bid) bonds and European corporate and financial credit. As we stand, the S&P 500 has retraced back to Europe's 'fair' perspective.
Europe's BE 500 (S&P 500 Equivalent) versus the S&P 500 since the EU Summit...
and Europe's equity market remain in a world of its own relative to credit markets...
VIX has overshot this equity strength but is leaking back higher now (inverted below)...
Certainly seems like it's easy to use the infinitely sellable vol market to ramp equities to where 'they' need them - as the S&P managed to scramble back close to unch for the month (and week).
Charts: Bloomberg
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Another explanation: Manipulated markets day after day after day after day. Tiresome and eventually, catastrophic.
Another explanation...It's all Bullshit!!
+ 1, yes it is...
I write about our National Debt (about to clock over $130,000 per taxpayer), Gold and six fun facts about my new home town at my blog!
http://tinyurl.com/7ujbbro
Are you going to jump in front of me all day?
;)
too many eyes watching and waiting for crisis.....a watched pot never boils
There is very secret EU summit tomorrow and the Skynet knows it! (Skynet = everyone except you!)
I was watching the real estate bubble and it boiled
Why is it irrational exuberence when the dxy goes down, but then it makes sense when the euro goes down? Because UST yields are at lows when stocks are pushed higher?
The Fiat Ponzi knows no bounds when the President's Working Group on Financial Markets has the ammo of the UST and Fed behind it. All while POMO auctions continue. Here is your QE!
Official President's Working Group on Financial Markets Executive Order:
http://www.archives.gov/federal-register/codification/executive-order/12631.html
Both the dollar and euro are shit stained fiat currencies that are manipulated by Central Banks who more than anything are trying to squeeze the middle class into the lower class by raising asset prices, lowering wages (due to the purchasing power of fiat) while unemployment rages on thanks to treaties such as NAFTA that sent jobs overseas where people are treated like slaves.
Be my BITCH! Bernanke you see you don't need to ACTUALLY print.
"Fed's Lockhart says Fed may need to 'respond more aggressively'
Lennon right on regarding trade agreements that boost machinery exoorts from US first year or two only to have it used to manufacture consumer goods for imports to the US in much greater volumes in subsequent years because market access is part of the agreements . So who promotes Congress to pass these agreements?? Answer--Multinationals with no national loyalties to workers or any obligation to pay taxes, such as GE Wierd system of economics which has finally caused inevitable outcome combined with Keynesian Voodoo and banking shadow manipulation.
It is total bullshit!!!!!, good that he was arrested but why were the others not arrested? this moron is obviously not connected.
I should add that his close family members and his VP's should go to jail maybe on lesser charges.....like aiding and abbeting fraud, etc.
Anyone who thinks this irrational exuberance will end today is not paying attention to the MM max pain pins on large-cap tech (GOOG, AMZN, PCLN, AMZN, etc.) weekly options. QQQ will explode out of the gate on Monday: if GOOG 2Q EPS on Thursday confirms, then we will be reaching that "terminal high" before the 30-day expiration period.
Anyone trading on macro news and fundamentals should just be committed at this point.
I would just figure its Friday and they want the stock market to end on "a good note" so that the bankers feel good on theirs yachts (we paid for) before the "Market" get back to reality on Monday.
JPM is up $1.32......makes absolutely 100% no sense.
This post facto explanation is fine, but: what is the next compression trade Batman?
Yep, thats more like it. Because the economy of the world is screeching to a halt and they have to keep the game going at least until after the election. I don't think it will happen, I think something will burst and Obama will have to deal with it along with the rest of the govt..
My guess is that as long as we continue to get reports of massive fraud on Wall Street the market will never need QE3.
looks like a technical trade on low volume. nothing more, nothing less.
Yep. 9 months and running
Only 9 months you say?
Try 40 and counting, since March 2009.
Or...
Fed May Need to Begin New Asset Purchases, Lockhart Says
We are all in the rocking boat. Don't look over and don't fucking stand up. I'm with you Fed Bitches, ALL IN!
Look at EZ bank equities today (esp DB) by comparison to US global banks for further confirmation of the above ES/EZ arbitration/compression explanation for exuberance.
It all depends on your time frame. Over the past 2-3 years, ES have dramatically outperformed EZ, both banks and the general market. Broader indexes have outperformed by 30% or more in constant currency terms. If ES are going to catch up to EZ it should be in the downward direction, notwithstanding short-term fluctuations.
But the whole thing is bullshit now anyway, it's just pokemon cards, pay as much or as little funny money as you like.
Comrad Conner--Could be as you say if on low volume, debunking idea that overseas buyers are seeking curruncy refuge through equities. However low volume has been constant meaning institutional investors on sidelines as well as retail trade absent from market. When does the macro picture get priced in , or is it ? Dow now close to all time high of 14,000, before sudden 2008 crash and credit freeze. We are worse off now with hope fading on global scale. Something Wrong
"One Explanation For Today's Irrational Exuberance:"
~~~
STUPIDITY
This rally was expected after so many down days. Look to fade this rally. Outlook for the economy is quite poor despite all the QE3 hope floating around. Trade QE3 when QE3 is announced.
Ya those were some brutal down days no?
Seriously. Most of those days were flat, nothing more than 1.5%, total downdraft what, less than 3%? Wow, bear market or what? Oversold! Back up the truck!
Just look at the dollar: dollar up, market down and vice versa. Just the way those HFT's are programmed.
WOPR and Skynet in a brutal game of PacMan?
Whoever is responsible for creating your charts should be fired immediately.
Just feeding the birds.
Black swans.
AFLOCKALIPSIS = [Mutiple BLACKSWANS EPIC EVENT = 28th July]
But, but...
Why is DAX up 2%?
Because people are realizing that they are earning soverign rates on junk bonds and they want out.
It's part of the BANK RUN
Money isn't safe. At least with equities in major German firms the capital is represented. Forget valuations. This is the new flight to safety. Shares may lose value but unless the firms go BK, the equity is ok.
Sovereigns will all get haircuts rather sooner than later.
It is a panic melt-up.
Well done by JPM if you have 4Billion loss when people expect 2B, then just leak to the press 9B number and then on earnings announce 4B and everyone is happy. Well done.
In behavioural finance this is called "Anchoring"
SP500 hourly chart currently shows upside with brutally low volume. At the end of the corrective wave, the volume tends to dry up.
http://bullandbearmash.com/index/sp-500/hourly/
Following this is usually a motive wave in the opposite direction.
It's 2p EDT - could see a big sell off going into the weekend.
People junked me right when i commented last night to BTFD dummy after italy was downgraded. There's always a rally after eu sovereign gets downgraded. Don't know why. Just the facts.
Do you want a cookie?
Nah i'll strok my electronically held fiat instead. Happy 13th all, peace out !
To me it's the same simple story, too much ZIRP money chasing too little quality assets. Sure Euro equities suck but they start to look good compared to bonds that should be paying 2 to 3 times what they are if their true risk was considered. We could be looking at a post Jackson Hole redux here where the trillions that have been printed and parked in the past 4 years starts flowing into equities, commodities and PMs. God help the middle class.
Looks like a trap to me. Pump equities and release bad news on Friday the 13th. Big boys selling into this rally and hoping to leave some retail investors (if they even exist) with the bag.
Expect terrible earnings and equity weakness next week would be my best guess. But fuck if I know.
Don't try to rationalize the irrational.
Well, these are computers and therefore extremely technical. They milk the market rather efficiently both ways. It went down to the 50-day MA in six losing sessions, now it´s bouncing off that. Business as usual.
Another explanation for todays irrational exuberance is the markets are completely manipulated and thus, detached from reality.
Look at the financial headlines today. Not a single piece of news that would suggest anything in the world is going to hget better. In fact, it looks like the world economy is in a recession.
Today's market move should scare every one to death for someone is trying to mask the devastation that is surely to follow.
Where else do you park money when bonds and sovereigns get junked or worse yet, need a haircut?
This is a PANIC DRIVEN MELT UP from super wealthy investors freaking out they are holding all this synthetic digital wealth. What should they do with billions of Euros or Dollars? Convert to physical? They will do that but they cannot possibly accumulate enough and they know that as well. So they buy equities in their last ditch attempt to securing their positions.
For us peons it is a different story. Buy physical and stay out of equities. The rough ride is ahead. When the heavy lifting comes and the tough negotiations start, the big boyz can call the shots. We can't. They hold majority stakes and they will always get preferential treatment.
You are so right!
The little guy has a chance of gaining in wealth and the big guys are fighting to see who can maintain their wealth. There will be few who do and most will become chum.
Madoff
Bank failures
http://www.fdic.gov/bank/individual/failed/banklist.html
MF Global
PFGBest
JPM ?
The crash of the titans, that's how I see it too.
No this is pure and simple manipulation. The game is totally rigged if you still had any doubts.
Here is the deal , the manipulators want QEIII, Bernanke speaks next week and while he is doing it, they will tank the market badly to try an influence him, he knows it and hence the ramp so the down damage next week will be "contained" using fed speak.... that probably means 100+ points give or take.....
The short ban is still in effect. Why do some still use "technicals"? Techs exist when the market is "free" normal price discovery. this is the farthest from it. A complete total fraud. thanks Ben. For those that still luv techs. Check out the www.etfdigest.com "Daves Daily" Awesome stuff !
Yet we are close to very important technical levels. The 50-day MA is at 1335 and the 200-day one at 1310-20. The spread between the two has been steadily narrowing since May. Soon the twain shall meet. Severe turbulance is to be expected.
If you really want to check something out, go look at the volume in gasoline futures over the past two months. Perhaps that is why the pump price never went down. Massive speculation driving gasoline far higher than the per barrel price of oil would suggest. $2.81 is back to early may levels when oil was $10 a barrel higher.
Hang the speculators or we all die.
Its just Roulette with a magnet.
REAL news just goes unreported now or is pushed below the cheerleading headlines:...
The sales decline hit 16.1pc in June, year-on-year, in Ford's traditional 19 western European markets.
French, Italian and Spanish car sales have all tumbled in the first half, while those in Germany remained flat, rounding off a gloomy period for Europe's auto industry as it battles government austerity and economic downturn.
"The economic environment remains very difficult," Roelant de Waard, Ford of Europe's sales chief, said in a statement. The company said first-half sales by all automakers hit their lowest level in Europe since 1994.
He said the launch of new products could give the group sales momentum in the second half of the year.
The eurozone debt crisis and sagging consumer demand are weighing on earnings at mid-market automakers that had already struggled, or failed, to stay profitable in Europe last year.
Last month, Ford blamed Europe for overseas losses expected to have tripled in the second quarter from the $190m recorded in the first.more and more of the defensive big caps are going increasingly parabolic, CL, KMB, WMT. up volume is getting more and more concentrated in interest sensitive groups-utilities, closed end bond funds. i suppose the yeild on the 10 year could go to 1%, driving even more desperate buyers into the current hot area-"dividend paying stocks", but the whole thing just gets longer and longer in the tooth. things take longer to happen then you thought they would, then they happen faster than you thought they could. this could drag on before any real inflection points are reached-or it could all be over monday. trying to figure the whys and wherefores is pretty pointless as we're probably only truly cognizant of a tiny percentage of what drives prices. manipulation seems pretty easy to do on such light overall activity. i knew guys in the 80's who told me how they would goose the dow at 3:59, it was pretty easy actually.
there is a lot of work holding the market here today. None of "them" want a repeat of Thursday's close.
its to divert the attention away from jamie.. planned weeks ago.
My summation of why the SPX is up 20 handles on nothing was much more simple.
It's fraud.
warm up for Bernanke next week
http://www.zerohedge.com/news/bank-japan-goes-full-tilt-buys-record-amou...
The market is almost without fail at a high just before some really bad shift hits the fan so I think Citi´s
"The Market Will Form A 'Terminal' High"piece which the Tylers covered yesterday makes sense. By Oct. severe govt. spending cuts will hit and then higher capital gains tax in the new year. A market that anticipates a fall ahead will of course rally to better make room for and facilitate distribution when it will be needed.
With you there. The free money will flow in and drive equities to extreme valuations, then pop.
Well, it was standard market behavior long before trading programs. But I wonder if this model is being increasingly overextended in recent time. For example the DOW five years ago was exactly where it is now. Two years, it was at 6600, it has taken three years to somehow claw back. Maybe a year to the next bottom with increasing rate of crashes in the coming years? Only time will tell.
I was always under the assumtion that the market was 'forward looking' by about 6 months. Today's ramp implies the economy is vastly improving 6 months from now (January 2013). I'm sorry. I don't see things in January being any better than now. Someone please explain the reasoning/tenet that the market looks 'forward'. Looks to me like it is looking in a 9 month backwards mirror.... I understand your premise ("A market that anticipates a fall ahead will of course rally to better make room for and facilitate distribution when it will be needed"), but it negates the 'forward looking' tenet because the distribution you speak of would be happening now and not six months from now.
there is no QE3 coming anytime soon... just more rumors and articles that state "now the odds for QE3 are up." I like the idea that this is a pump before the dump... we will see soon enough I guess. Time to recycle my options.
I also think there's some flatening of positions due to Sir Pump-a-lot speaking to Congress next week.
The reason for the melt up is that the "market" is being manipulated. It is the same crap that has been going on for a long time. There is no need to reference any charts.
hard to guess, but based on prior patterns the europeans and asains sell off tonight, but good buy tomm (monday) a bit lower.
no idea but I think the fact we didn't breech last weeks low is bullish for the time being. I expected one more day of lower lows before going upsdide
There is always tons of propaganda in the market as elsewhere but I don´t think we should permanently fall in love it. It´s an extremely fast moving world. You have to be very nimble indeed. Bear in mind that in this environment ideas and concepts can easily become overbought and -sold.
Regrettably, when you study long-term history the consistent thread is deception. It has been the cornerstone of military doctrine for thousands of years and certainly plays a major role in the marketplace. Well, there´s a fine line between deception and fraud and at some point success due to fraud has to reverse, become overbought if you will. Then you have these crashes. The bear market that started in 2001 already seems especially harsh in this regard as it has already crashed twice by 50%. Nobody knows how long this bear will last but I think we can expect increasing frequency in its crashes in the coming years.
Anything with the name Peregrine is crooked....
There was a company 11 or 12 years ago Peregrine Systems who cooked their books for years and the assholes never got charged, in the end they sold to BMC Software after defrauding all their investors......of which I was one.......and now this guy...
I don't know what 's with the Peregrine name but stay away from anything that has that name associated with their company!!!
maybe Peregrine in olde french meant a crooked stick with a wicked kick. I know that the "sourciers", the ones that look for underground water, carry a crooked stick to find the trace of underground water and the stick inclines to the pull of a magnetic impulse when water is not too far under, like it had an inbuilt lodestone. And hey presto you can drill your well right there.
Sounds very Peregrine to me this story of hidden wealth. Maybe your crooked sticked Peregrine dikk hood-winked you out of your water well.
Good one T - My explanation is the Fibo turn-date low I've been scouting since June 29-
Equity bulls double-down: NASDAQ on the verge / Bears stop-out fading Fridays S&P rocket launch
http://www.elliottwavetechnology.com/2012/07/equity-bulls-double-down-nasdaq-on.html
Real Power from Fake Money?
http://shutupnsing.wordpress.com/2012/07/14/the-centralization-of-real-power-using-fake-wealth-self-interest/
Equity rally can resume as overbought USDX daily & weekly chart commences overdue retracement while EURUSD selling ceases for now. This results in SPX / DOW choppy weekly charts reverting to neutral.
This remains a constant and will not change:
* USDX monthly indicators [ie big picture] continue to warn of significant long term USD upside. (thus EURUSD & AUDUSD etc bearish)
* SPX monthly indicators [ie big picture] continue to warn of significant long term downside for equities which will be worse than 2008.
http://www.zerohedge.com/news/2012-12-24/market-analysis