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Overnight Sentiment: Back To Zombie Mode

Tyler Durden's picture





 

Hopes that today may finally see an increase in trading volatility and volume following yesterday's reversal session will likely be dashed as the event wasteland on the horizon continues for the third day in a row. As DB explains, the FOMC meeting minutes and Juncker’s visit to Athens are likely the two main sources for key headlines today. While backward looking and certainly predating Lockhart's hawkish comments from yesterday, the FOMC minutes today are expected to shed further light on the kind of policy currently under consideration and the economic conditions required before easing is warranted. One thing that will not be discussed is the circularity of launching more QE even as gas prices have never been higher on this day in history, soy and corn are back at all time highs, and the market trading at multi-year highs. As repeatedly explained before, the option for the FOMC include pushing out the targeted exit date for fed funds, providing “exit guidance” on balance sheet measures (i.e. asset sales), various mixes of additional balance sheet expansion (including the possibility of an open-ended QE program) and  cutting interest on reserves. It is virtually certain that none of these will be enacted at the Jackson Hole meeting in one week, 2 months ahead of the presidential election, but hope springs eternal.

Beyond today’s meeting the Beige Book (29 Aug) is a key update before the oft anticipated Jackson Hole event on the 31 August, DB continues. Jackson Hole clearly could be a forum for Chairman Bernanke to outline his policy strategy but it remains unclear to Deutsche Bank how strong a case could be built around a large-scale QE with equities currently flirting around a post-crisis high. The S&P 500 has not moved more than +/-1% for 12 consecutive session, the longest streak since 11 May 2011. Market eased gains after Fed’s Dennis Lockhart said that he remains undecided on further easing. Lockhart, who’s a voting FOMC member and holds a mild-dovish stance, said that monetary policy can exert a powerful influence on the economy but is not a panacea. He also added that “There is a risk to monetary policy being employed too aggressively and without effect to address economic problems that can be resolved only by fiscal reforms”.

Moving back to Europe, Samaras’ meeting with Juncker is scheduled to take place 5pm London time with a joint statement to follow. It is perhaps too early for Greece to ask for bailout concession today but the budget slippage as reported by recent press could be discussed. George Saravelos noted that PM Samaras is likely hoping for supportive language from key EU politicians indicating potential program adjustments. It’s a busy week for Mr. Samaras with Merkel’s and Hollande’s meeting on Friday and Saturday respectively to follow.

Away from Greece the latest Dutch opinion polls by the TNS Nipo yesterday showed a tight race between PM Mark Rutte’s pro-euro Liberal Party (VVD) and the far-left Socialist Party (SP) ahead of the 12 September general election. The poll showed that the Liberals and Socialists enjoyed support that would translate into 34 seats apiece in the 150 seat parliament. Last week Socialist leader Emile Roemer openly criticised the EU’s obsession with the 3% maximum budget deficit target and over the weekend also said that “The only thing a government can do in these times of crisis is stimulating the economy... Certainly not senseless austerity". It looks like a multi-party coalition is the most likely post election outcome in Netherlands.

Overall, anyone expecting major market-moving developments with the market living out the last days of vacation before the September roller coaster returns, will be disappointed.

 


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Wed, 08/22/2012 - 07:00 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

If I only had a brain.

 

Wed, 08/22/2012 - 07:27 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

If this author had a brain he would know the market is going to have strong chop with a high chance of catastrophic bloodfarts... 

everything correlated with the market, is looking perfect for a market reversal.

:/  But seriously, author, this is another zombie rally, fer def sure bro...  LOL, please, btfd then.

 

& for the record, this is QE4...  Does no one else f'ing notice?  All of the sudden the market starts spiking hard on low volume in the same low volatility channel...

Hypothetically, if you were the Fed, and the first 2 times you QE'd, you told everyone before hand, and they all went out and bought tons of gold and silver...

Would you tell anyone ever again that you were using QE?

Wed, 08/22/2012 - 07:33 | Link to Comment AlphaDawg
AlphaDawg's picture

who knows what equities will do next man? Its all dandy talking, they have a mind of their own

All I need to know for now is that Spain is dead, 100% certain, and silver is so cheap I cant get enough of it

Wed, 08/22/2012 - 07:37 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

no lol.  first off they are heavily manipulated for about 4 out of 6 months a year.  that's not a mind of its own, that's fed printing. 

& as for random?  no the market is always cycling with other correlated markets like bonds or dollars - they hit ratios - arb spreads ect.

100k says high chop to bloodfarts, bond spikes, and vix plays.  ezpz. 

Wed, 08/22/2012 - 07:47 | Link to Comment AlphaDawg
AlphaDawg's picture

Hope you are right man, I lost my ability to call equities after all this manipulation.

There are some really shitty companies showing strength in Europe atm, would love to short them, but scared of getting squeezed

Wed, 08/22/2012 - 07:54 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

easiest bet you can make is to find a country with equities are that are sidewinding.  Find 1 super fucking shitty stock that is way over valued.  Preferrably  a P&D.  short it.  then find an awesome stock that is relatively low in value.  buy it.  finding good and bad stocks is ezpz.  just start reading 10ks, a lot of them.  Easiest arb trade in the world, as long as you correctly adjust your risk potential to the macro market's impact upon each.  Doesn't matter where market goes, only that you are buying good stocks and shorting shitty ones.  too bad the Facebook b2b p2p bubble left.

Wed, 08/22/2012 - 07:58 | Link to Comment AlphaDawg
AlphaDawg's picture

Thanks man

Wed, 08/22/2012 - 08:08 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

just remember that the game ends eventually, and the arb could be hurt by the eventual arrival of a a fast market drop.  Most important, that industry potential matters when it comes to risk management.  for instance finding a great b2b or p2p stock to buy, isn't a good idea, anymore, but finding a great, undervalued or about to be undervalued mining stock, pays twofold considering the likely potential for mining stocks in the long term.  same idea can be applied to etps, but generally etps are designed to go to 0.

Wed, 08/22/2012 - 07:39 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

for the record, this is QE4

 

I lost count at 3.

 

Wed, 08/22/2012 - 07:01 | Link to Comment new game
new game's picture

exit guidance - only key words in above post

try, left the buiding a long fuking time ago...

silver bitchezs...

she breaks 30 today?

closes above?

time has come?

Wed, 08/22/2012 - 07:29 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

anything is possible.  BTFD.

Wed, 08/22/2012 - 07:04 | Link to Comment XtraBullish
XtraBullish's picture

These ag/equity/metals moves are a precursor of the huge drop pending in the USD. The large Forex anti-aircraft guns are slowly turning to Capitol Hill, the legislative home of the largest DEBTOR nation in human history. They make Madoff proud. And London/British Pound are going to be annihilated as well. U.S. MSM snickering over "socialist Europe" while over 60mm Americans are on food stamps. Talk about the hash calling the pot "dope".

Wed, 08/22/2012 - 07:08 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

huge drop pending in the USD.

 

Sure.....I'll trade you a handful of crap for three bushels of sh!t.

 

 

Wed, 08/22/2012 - 07:13 | Link to Comment eurogold
eurogold's picture

I totally agree with you ! Go XtraBullish!

Wed, 08/22/2012 - 07:17 | Link to Comment eurogold
eurogold's picture

I totally agree with you XtraBullish! MSM makes it look like the dollar is strong and the sheeple believe it.

Wed, 08/22/2012 - 07:17 | Link to Comment fonzannoon
fonzannoon's picture

I wonder about that USD drop. Something has to explain this rise up in everything lately. But everyone knows no way in hell QE happens.

The rise up seems to me to be about Europe euphoria though. But who the hell knows.

Wed, 08/22/2012 - 07:30 | Link to Comment Muppet of the U...
Muppet of the Universe's picture

Think of it more like, this is the precursor to the rise of the Euro.  I hear Lord Rothschild put a WHOLE 200 million short euro. OMFG 200 mill?  WOW look out below euro coming through... http://www.youtube.com/watch?v=wgvwfvTcNl0

Wed, 08/22/2012 - 07:14 | Link to Comment Hayek FA
Hayek FA's picture

The "market" is getting an epidural, no volume, no volatility, everything priced in decaying FRN's pretty soon there will be only one buyer and no sellers. Much like the Treasury market.

Gold and Silver Biachettes 

Wed, 08/22/2012 - 07:14 | Link to Comment dwayne elizando
dwayne elizando's picture

So should I put on my iTard helmet today?

Wed, 08/22/2012 - 07:26 | Link to Comment Hayek FA
Hayek FA's picture

Only if you have the iTard 5 with reinforced tinfoil, and a four foot aerial.

Wed, 08/22/2012 - 07:31 | Link to Comment dwayne elizando
dwayne elizando's picture

I'm only an iTard 4. iLose again!

Wed, 08/22/2012 - 07:37 | Link to Comment Yen Cross
Yen Cross's picture

 MBA weekly mortgage aps. were down -7.4%. Can't wait to see those existing home sales @10:00 a.m. (est). FX risk is slowly drifting lower.

Wed, 08/22/2012 - 08:04 | Link to Comment Cult of Criminality
Cult of Criminality's picture

OOPs

Sorry,thought I saw a black swan but its a vulture eating carrion.

Carry on,move along, How bout an Admin song for your wakeup call

 

Guantanamo !

 http://www.youtube.com/watch?v=HZy9G0L592I&feature=related

Wed, 08/22/2012 - 09:51 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Risk off sentiment ~ SPX 8 hour bearish chart warning continues and FTSE daily chart gives bearish warning.

Of course central bank intervention could burn more shorts and reverse this scenario...

http://www.zerohedge.com/news/2012-12-24/market-analysis

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