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A Picture Paints A Thousand Words (Well Just Two - Short Squeeze)

Tyler Durden's picture




 

We have highlighted this before but given the incessant rumblings that everything is fixed and that nationalizations, recaps, and EFSF votes are 'positive', we thought a reflection on what is really going on would be useful. The mother of all short squeezes as we mentioned recently continues - catalyzed by the since refuted FT Rumor of a pan-European bank recap 'plan'. The fact that Short Interest is at its highest since the "generational lows" only helps.

The red line is the Goldman Sachs most-shorted index from the Russell components and the green line is the Russell 3000. Note the impressive outperformance (+9.9% vs 6.8%) since the FT rumor of the  'short' index - while not foolproof, certainly a good sentiment indication that shorts have been highly uncomfortable.

 

Chart: Bloomberg

 

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Thu, 10/06/2011 - 15:32 | 1747038 Prairie Fire
Prairie Fire's picture

Dow 50 000

Thu, 10/06/2011 - 15:41 | 1747077 SheepDog-One
SheepDog-One's picture

DOW 50,000, gas $20, avg trip to the grocery store $1,500.

Thu, 10/06/2011 - 16:08 | 1747168 Ruffcut
Ruffcut's picture

And the look on your 4 yearolds face that you will never be able to afford another happy meal, priceless.

But there's the mastersfuckingyouintheass card, for everything else.

Thu, 10/06/2011 - 16:08 | 1747181 Long-John-Silver
Long-John-Silver's picture

Every meal will be a happy meal no matter what sort of food it is.

Thu, 10/06/2011 - 16:13 | 1747207 Fluffybunny
Fluffybunny's picture

Bread diluted with some sawdust will be a great treat.

Thu, 10/06/2011 - 16:20 | 1747252 Mitch Comestein
Mitch Comestein's picture

Tumbleweeds with salt......back to the dustbowl days.

Thu, 10/06/2011 - 16:21 | 1747260 Randall Cabot
Randall Cabot's picture

Dental floss chowder can be quite tasty if prepared properly.

Thu, 10/06/2011 - 16:26 | 1747282 centerline
centerline's picture

Gotta keep those squirrels in the backyard fed well for now.  Reminds me to load up on spices.

Thu, 10/06/2011 - 19:44 | 1747981 sun tzu
sun tzu's picture

The raptors are eating all the squirrels. I suppose I can eat the raptors. 

Thu, 10/06/2011 - 20:32 | 1748074 jonjon831983
jonjon831983's picture

Good call! Can't wait for Melamine milk!

Thu, 10/06/2011 - 17:38 | 1747613 ilovefreedom
ilovefreedom's picture

The New American dream:  Wanting a better life for your children, hoping they won't grow up eating bugs

Thu, 10/06/2011 - 16:07 | 1747170 Long-John-Silver
Long-John-Silver's picture

Physical Gold and Silver will be barter only, no one will trade it for paper or digital dollars.

Thu, 10/06/2011 - 16:10 | 1747187 Prairie Fire
Prairie Fire's picture

Au Ag yea yea yea...

A friend of mine has an even better/cheaper idea: coffee beans.

Imagine waking up after the big fall--either you're going to be reaching for your whiskey, your gun, your pot...

And your morning coffee.

Thu, 10/06/2011 - 16:22 | 1747270 MrBinkeyWhat
MrBinkeyWhat's picture

Toilet paper...maybe cigarettes. ;-)

Thu, 10/06/2011 - 18:14 | 1747720 crazyjsmith
crazyjsmith's picture

Beer!

 

Hey, I will give you a 3 pack for those eggs and that piece of ham.

Deal

Thu, 10/06/2011 - 18:48 | 1747841 YesWeKahn
YesWeKahn's picture

you talk about new $ or the old $?

Thu, 10/06/2011 - 16:13 | 1747210 IQ 145
IQ 145's picture

Making money on my Long positions on the S&P @1105; BAC @$5.70; F @ $9.85; appreciate your shorts; as you take your losses it will help me make more money; thanks for believing everything your guru told you. We appreciate it.

Thu, 10/06/2011 - 16:18 | 1747239 SheepDog-One
SheepDog-One's picture

You 'made money' I see so youre declaring you sold? Until the sell order clears, you havent made jack shit and all your gains can easily be a big negative by tomorrows open, IQ45.

Thu, 10/06/2011 - 16:26 | 1747281 MrBinkeyWhat
MrBinkeyWhat's picture

I am not selling any of my stuff. Lead & Brass is looking GREAT! Acquired my "junk" silver @ face value...BITCHEZ! Farm land is dropping in price nicely (lower property taxes)...What is not to like?

"Bring out your dead"...

Thu, 10/06/2011 - 16:35 | 1747319 IQ 145
IQ 145's picture

the phrase "making money" is understood by most literate humans. You are correct; nothing is booked.

Thu, 10/06/2011 - 16:38 | 1747324 Aeonios
Aeonios's picture

Sad to say I doubt it, sheeps. They've still got til the 1180-1190s SPX before they come to their senses, based on the last tape-painting exercise. Never underestimate herd stupidity, especially when they get to hear what they want to hear.

Thu, 10/06/2011 - 16:48 | 1747382 Robslob
Robslob's picture

It is clear IQ-145 is another spin-off of RoboTrader.

Thu, 10/06/2011 - 21:37 | 1748216 zorba THE GREEK
zorba THE GREEK's picture

My cousin started day trading 6 months ago and now he's a millionaire. 

Too bad he was a billionaire when he started.

Thu, 10/06/2011 - 16:20 | 1747254 walküre
walküre's picture

You bought BAC @5.70 before it dropped almost another 10% - Idiot!

Is their website back up? I lost track.

Thu, 10/06/2011 - 16:31 | 1747308 J 457
J 457's picture

You forgot to mention you bought BAC at $16.60 and Ford at 18.30.  Wow, does your guru Cramer really know his stuff.  Now that you made your 10% back (still down 70%) you'd be smart to sell...

Thu, 10/06/2011 - 15:32 | 1747039 YesWeKahn
YesWeKahn's picture

This is a good trade, I love it. I expect that we finish the rally tomorrow morning. The bad news always comes out during the weekend. I will short a little this afternoon.

Thu, 10/06/2011 - 15:37 | 1747051 bob_dabolina
bob_dabolina's picture

The bad news could come out tomorrow with NFP

The market has some rosiness priced in (not sure why with 150,000 planned layoffs for Sept)

Thu, 10/06/2011 - 15:39 | 1747065 GeneMarchbanks
GeneMarchbanks's picture

Quick postin' bobby! You got me pal the technology failed me. Friday is always dirty laundry day last hour & after close. Be warned.

Thu, 10/06/2011 - 15:39 | 1747066 Popo
Popo's picture

Lots of people calling for a rally until the end of the year, and a plunge after the holidays...  Tough call... I say we dive sooner, but I'm always amazed by the power of extend and pretend....

Thu, 10/06/2011 - 15:48 | 1747101 MaskedAsASheep
MaskedAsASheep's picture

Through ZH about a month ago I found this roughly ahhhh <90% accurate blogger...

You guys may know him -----> pebblewriter look him him up at http://pebblewriter.blogspot.com/

 

His techs calls for 1040 by next week 1200 by year end and 350 by 12/12 here ----> http://bit.ly/qtxIhl

 

Happy trading!

Thu, 10/06/2011 - 16:03 | 1747154 mcguire
mcguire's picture

trolololololoooooo...

Thu, 10/06/2011 - 16:45 | 1747347 Smiddywesson
Smiddywesson's picture

I say everything, including gold and silver, bounces around in a range until the wheels come off.  There is no limit to the manipulation we are seeing, so why would I think it will stop before everything blows up?  What's going to stop it, the manipulators, will they run out of money or motivation?  No.  Range bound wackiness is the norm from now until the financial apocalypse, because that's exactly what you'll get when they finally lose control.

Thu, 10/06/2011 - 15:46 | 1747088 Nedly66
Nedly66's picture

or good news...

Bad NFP = market tanks right away

 

Good NFP = market surges for 30 minutes - 1 hour to sucker in the retail crowd, before tanking.

 

Either way doesn't really make much of a difference

Thu, 10/06/2011 - 15:52 | 1747113 Prairie Fire
Prairie Fire's picture

I agree, but over the last 3 years I've been trying to do the opposite of what my gut/DD tells me.

Obviously tomorrow the NFP numbers will be bullish--even if they're imaginary. I bet you that they exceed estimates and this party upwards continues.

Thu, 10/06/2011 - 16:00 | 1747146 catacl1sm
catacl1sm's picture

NFP of 0 isn't bullish. That's what I'm expecting. I'm sure GS will adjust their numbers right before the number is released.

Thu, 10/06/2011 - 16:14 | 1747211 richard in norway
richard in norway's picture

negative print im geussing

Thu, 10/06/2011 - 16:20 | 1747258 Growyourownfood
Growyourownfood's picture

expect a beat on NFP. hence why we have been rallying. 100,000+

Thu, 10/06/2011 - 16:19 | 1747247 Prairie Fire
Prairie Fire's picture

Zero is positive in these markets.

It just lacks the shock and awe of a +10 000 (or some arbitrary number that will be revised downwards later)--and that's what the crackheads out there want, shock and awe.

Thu, 10/06/2011 - 20:02 | 1748014 RmcAZ
RmcAZ's picture

Negative is the new positive. Positive is also positive.

Thu, 10/06/2011 - 21:43 | 1748226 zorba THE GREEK
zorba THE GREEK's picture

Thank heaven Obama saved all those jobs with his programs or unemployment would be much higher right now.

If the DNC had any sense, they wouldn't even nominate him for the next election.

Fri, 10/07/2011 - 02:51 | 1748812 merizobeach
merizobeach's picture

Do the Dems even have anybody after Obama (except for Kucinich who, like Paul, will NEVER receive his party's nomination)?  Clinton?  Puke, no.  I would say Howard, but I recall reading that he wouldn't run in exchange for being made party chairman.  When I asked if the Reps even have anybody (other than Paul) to go against Obama, people like Bachmann and Perry come out of the woodwork.  I'll actually be surprised if Obama doesn't win.

I'd vote for Paul/Kucinich if they'd both break ranks.  My estimate that'll happen: <1% probability.  Does anyone have a link to one of those probability exchanges--where people gauge the likelihood of an outcome by making moneyless bets in a market-style exchange?  There's such a thing from one of the universities in Taipei that looks at local events at seems to predict outcomes better than the many slanted polls.

Thu, 10/06/2011 - 16:19 | 1747246 SheepDog-One
SheepDog-One's picture

The 150,000 planned layoffs is probably good news as they were expecting 200,000.

Thu, 10/06/2011 - 16:40 | 1747340 Aeonios
Aeonios's picture

The last two ISM reports were manipulated bullshit numbers. What makes you think the NFP will be any different? =\

Thu, 10/06/2011 - 15:37 | 1747061 Prairie Fire
Prairie Fire's picture

You know who was famous for invading countries over the weekend?

 

 

Thu, 10/06/2011 - 15:39 | 1747069 Deadpool
Deadpool's picture

the US Navy on shore leave?

Thu, 10/06/2011 - 15:48 | 1747098 Prairie Fire
Prairie Fire's picture

Hahahhaa.

Hitler.

 

Thu, 10/06/2011 - 16:46 | 1747373 Smiddywesson
Smiddywesson's picture

Pearl Harbor was a Sunday

Thu, 10/06/2011 - 15:50 | 1747106 Iam Rich
Iam Rich's picture

If the NFP is off, we will see a selloff in the morning then meltup nearly into the close on Friday...wait til then if you are considering shorting.

Thu, 10/06/2011 - 16:21 | 1747265 SheepDog-One
SheepDog-One's picture

Everyone well trained, certain even after a possible drop there will definitely be another rise back over the top and then a lot more. Conditioning going perfectly, everyone calm as Hindu cows.

Thu, 10/06/2011 - 15:34 | 1747045 mynhair
mynhair's picture

I'll take TZA for 38, Alex!

Thu, 10/06/2011 - 15:57 | 1747132 tekhneek
tekhneek's picture

What is FAZ for $50? PLEEEEEASE! $55 and I will BACKUP THE TRUCK.

Thu, 10/06/2011 - 15:58 | 1747136 Placerville
Placerville's picture

TZA at 42 is a good play. Was good back to 60 last time.

Thu, 10/06/2011 - 16:30 | 1747302 spongeBOB
spongeBOB's picture

This is exactly how I lost my ass last year.

Thu, 10/06/2011 - 15:35 | 1747049 buzzsaw99
buzzsaw99's picture

same money running back and forth side to side on the boat.

Thu, 10/06/2011 - 16:00 | 1747145 DarthVaderMentor
DarthVaderMentor's picture

I think you meant to say:

"same money running back and forth side to side on the market boat trying to find asset preservation lifeboats as it fills up with water and will do the same as the Titanic!"

 

Thu, 10/06/2011 - 15:36 | 1747053 AmazingLarry
AmazingLarry's picture

Oh I rode the URTY express, don't you worry your pretty little head one little bit.

 

Thu, 10/06/2011 - 16:44 | 1747355 Aeonios
Aeonios's picture

URTY/SRTY >>> all

Thu, 10/06/2011 - 15:37 | 1747054 GeneMarchbanks
GeneMarchbanks's picture

Incredible. The rumor and rumor derivative market is a leading indicator now.

Thu, 10/06/2011 - 15:41 | 1747078 nyse
nyse's picture

Rumors3

Thu, 10/06/2011 - 15:46 | 1747089 GeneMarchbanks
GeneMarchbanks's picture

The beauty of the fiat & rumor regime is that, just like human stupidity, they are infinite.

Thu, 10/06/2011 - 16:14 | 1747215 Ruffcut
Ruffcut's picture

"rumor derivative market" I like it. I think they call it the vix. THey have gold and silver vix and many more to chose from.

Would a rumor vix, be the new VixVix.

Thu, 10/06/2011 - 15:37 | 1747056 clones2
clones2's picture

Im all cash today trying to figure out how to play this bounch from lows... not as much continuation today and lots of stocks and charts push right up to the 10 dma, just above, or at resistance at 20 dma...

I really can't believe 3 days ago was a bottom... But I'm trying to figure out which way we break next...

Any decent ideas?

Thu, 10/06/2011 - 15:47 | 1747091 Prairie Fire
Prairie Fire's picture

I'm in Canada and I've been buying the Horizon ETF's, mostly inverse--it seems to be an easy way for me to place a bet and/or change a bet without too much exposure. Keep in mind that I'm a small business guy (construction) and that I only get to check my positions 2-3 times a day. I usually place a bet Friday afternoon and ride it until the following Thurs.

I like to keep it simple. If it feels good, buy the bull.

I bought HDU about 3 weeks ago (USD bull ETF), based purely on my contrarian nature and it's been one of the best bets I've made all year!

Thu, 10/06/2011 - 15:48 | 1747100 dcb
dcb's picture

chart what you trade on a weekly basis, it all lines up, if it doesn't on the daily. I trade the double inverse funds, so there is a bit of error involced. using that and a way I have of predicting where themarket wants to fo, I get about 1180 on the next short target on the s and p. if you cahrt it out weekly, and draw the channel it should be rather clear , then my other (way) confirms that spot.

Thu, 10/06/2011 - 15:54 | 1747124 clones2
clones2's picture

Im seeing the top on the S&P channel right here at 1160... and at 20 dma resistance.

Problem I see - is the 20 year bonds and dollar look like they want to sell of a little more - which means market higher in my opinion...  perhaps a 50 dma test tomorrow...

I've been nuts on the past 5-7 sessions... today was my first red day in 5 days.  See how it trades of the open tomorrow I guess...

Thx.

Thu, 10/06/2011 - 16:16 | 1747229 mynhair
mynhair's picture

I'm seeing dead people; just can't quite figure how to play it.

Thu, 10/06/2011 - 16:19 | 1747243 Eagle1
Eagle1's picture

Service Corporation of America

Fri, 10/07/2011 - 02:59 | 1748817 merizobeach
merizobeach's picture

I'm truly a simpleton.  I trade my Bernanks for bullion as often as I can.

Thu, 10/06/2011 - 15:57 | 1747131 Prairie Fire
Prairie Fire's picture

Good idea--I'd love to play the double inverse, but there's not much selection for Canadians and I'm not that interested in trading with USD--it just seems to open up more complications and a bigger bill from my accountant at the end of the year.

 

Thu, 10/06/2011 - 15:54 | 1747112 Gene8696
Gene8696's picture

Same here... Sitting on cash, ammo, and toilet paper. Enough physical PM to get me to the family compound, 200 miles away, but I'm a long way from filling up the truck's gas tank. I think we have some time before we are all throwing rocks again.

In the mean time, I betting this is just another squeeze and rumor stampeed.... At least that's what I'm hoping. Looking back at the last 6 weeks or so, it is a far too normal looking head-fake. But I must admit, every time it happens I must tell myself lower days are coming, and not to let the cash burn a hole in my pocket.

Thu, 10/06/2011 - 16:16 | 1747225 IQ 145
IQ 145's picture

The decent idea is to buy bottoms and sell tops; you do this by looking at price charts; not by reading internet blogs. The risk is to high for the possible rewards now; you're late; so don't try too hard.

Thu, 10/06/2011 - 15:38 | 1747057 Hard1
Hard1's picture

Squeeze bitchez!!!

Thu, 10/06/2011 - 15:37 | 1747058 Belarus
Belarus's picture

Shorts are and have always been the weakest player in the game. It's why the high short interest is anything but comforting to someone expecting a crash (as I do). My opininion is thre willl be no crash until all the longs/shorts/ and everyone else in between are fried, dead, and exhausted. 

Thu, 10/06/2011 - 15:39 | 1747071 SheepDog-One
SheepDog-One's picture

And I say this 'record high short' level is the FED themselves.

Thu, 10/06/2011 - 16:18 | 1747240 IQ 145
IQ 145's picture

This is nosense, of course; but very high short postions always indicate market bottoms; the sheeple are never right.

Thu, 10/06/2011 - 16:24 | 1747274 SheepDog-One
SheepDog-One's picture

OH right....its 'the sheeple' all-in short with endless deep pockets to keep getting squeezed. You sir are an idiot.

Thu, 10/06/2011 - 16:29 | 1747295 Ruffcut
Ruffcut's picture

Hey SD, don't mind iq45, he does not post much during the day. He just got promoted to dayshift at micky d's.

Fri, 10/07/2011 - 00:37 | 1748644 Herd Redirectio...
Herd Redirection Committee's picture

I think you are right, SheepDog-One. Coincidentally, like you I am part of the Herd Redirection Committee :)

Operation Twist means "SELLING F*C&ING EVERYTHING, oh, except 10 year gov't debt, and US dollars"

Copper, short.  Silver, short.  Gold, short.  Platinum, short.  Gold mining equities, triple leveraged short.

And so on.  I saw the Twist coming, but did not realize it would mean not selling short term debt on their books, in exchange for 10 year debt, they sold everything short IMO, and bought 10 year debt.

Thu, 10/06/2011 - 16:52 | 1747412 Smiddywesson
Smiddywesson's picture

I always had this deja vu feeling about IQ45, and I think I've figured it out.  You played The Architect in the Matrix movies, right?

Thu, 10/06/2011 - 18:11 | 1747713 NeoCapitalist
NeoCapitalist's picture

Hmm that's a funny way to define sheeple, here let me tell you how us "literate humans" define it through a few examples:
One who is a sheep would
1) buy the s&p outright in a bear market and in a downsloping trend channel with that bear, instead of using calls to make money on the volatility and possible short squeezes at near lows.
2) not sell your positions that you foolishly took at major resistance and trend channel resistance that has halted rallies 4 times already.
3) believe a rally off of falsified rumors that is trading off of the lowest volume in the past two weeks.
4) not sell at clear resistance because you are an inexperienced trader buying outright positions in BAC and the green P&L on your screen is crippling your judgement.
5) complaining and undermining a financial blog and it's readers while simultaneously commenting and reading that blog multiple times in the same day.
If you look around and you can't find the sheep, well it must be you.
Please continue to hold your longs, I am salivating at the thought of hitting your stops as your dumb ass exits late and looses all unrealized p&l

Thu, 10/06/2011 - 16:25 | 1747280 Ruffcut
Ruffcut's picture

Damm, "sleep with sheep" dog. You maybe on to something. start artificially creating your own short squeezes. They short their own controlled market, taking out any bold bears, and being naked short, don't pay anything to nobody. FUcking brilliant. A star for your forehead.

Thu, 10/06/2011 - 15:37 | 1747060 ReallySparky
ReallySparky's picture

Still holding my shorts, literally, but I've been cringing waiting for this freak show to relent.

Thu, 10/06/2011 - 15:47 | 1747095 lapedochild
lapedochild's picture

Same here my friend.. you are not alone... With all the shorts out, I expect to see a fairly massive leg down given there are no breaks.. Just not seeing how this rally will end with never ending rumours.

Thu, 10/06/2011 - 15:58 | 1747138 ReallySparky
ReallySparky's picture

Agreed, it has taken everything for me to hold back adding more. I'll watch this through mid-next week, before I consider relenting, doubt they can hold it up over the weekend and into next week.

Thu, 10/06/2011 - 16:20 | 1747255 IQ 145
IQ 145's picture

I appreciate the contribution you're going to make to my profits when you finally realize you're screwed and buy back your positions. Thank you for not understanding how markets work.

Thu, 10/06/2011 - 16:32 | 1747313 Ruffcut
Ruffcut's picture

I on the other hand don't appreciate your contributions. For when you you are often wrong you go hide and slither back in a couple weeks.

Same old, song and no iq bullshit.

Thu, 10/06/2011 - 16:35 | 1747320 Prairie Fire
Prairie Fire's picture

Hahhahahha this IQ145 guy is awesome.

You are a heartless, egomanical beast!

YOU GO GIRL!!!!

 

Fri, 10/07/2011 - 13:43 | 1750288 NeoCapitalist
NeoCapitalist's picture

Hey IQ, why you so quiet today buddy?  Thought we'd be hearing a lot out of you, what has chanegd today that led you to go MIA?

Thu, 10/06/2011 - 15:39 | 1747067 youngandhealthy
youngandhealthy's picture

Some hedgeis making "good money" now.

Real money now where to be seen (yet)

Thu, 10/06/2011 - 15:39 | 1747068 swissaustrian
swissaustrian's picture

What a gift to short sellers.

Thu, 10/06/2011 - 15:39 | 1747072 Zola
Zola's picture

All that matters if whether the bonds have peaked or not. If they have, this is a massive tailwind to equities (until yields rise too high). If not someone needs to make the case for lowerr yields on US treasuries to me. 

Thu, 10/06/2011 - 15:41 | 1747076 trampstamp
trampstamp's picture

Dollar is testing the 6.18% retracement that's all. Tomorrow the dollar goes back up.

Thu, 10/06/2011 - 15:45 | 1747086 clones2
clones2's picture

I am almost think the dollar and bonds test the 20dma... which would be a little lower...

 

Stupid market is acting like it wants to keep rallying...

Thu, 10/06/2011 - 15:43 | 1747081 NEOSERF
NEOSERF's picture

ANY positive number in the employment tomorrow (forget 250K per month necessary to drop unemployment) will be looked at as "phew" no recession here..up 200 tomorrow on +35K jobs up from revised -15K jobs in August...

Thu, 10/06/2011 - 15:43 | 1747084 TradingJoe
TradingJoe's picture

jesus it s always 2-3-5 days up followed by a huge sell off and then repeat this time sell off will be more severe due to this huge run up too fast too much...etc!

Capisci?

Thu, 10/06/2011 - 16:10 | 1747189 catacl1sm
catacl1sm's picture

That's what I'm expecting. Massive sell-off on opening and down more on NFP of 0.

Thu, 10/06/2011 - 15:47 | 1747092 High Plains Drifter
High Plains Drifter's picture

how do any "normal" players make any money in this market is beyond me.............

Thu, 10/06/2011 - 15:52 | 1747117 mynhair
mynhair's picture

Xanax helps......

Thu, 10/06/2011 - 16:05 | 1747159 knukles
knukles's picture

Normies?  Them folks who still wonder about fundamentals? 
Like the only one is them real healthy corporate earnings which is just going gangbusters.  Especially when discounted by the prevailing 10 yr treasury rate.....

Well duh.
Both are irrelevant.

The earnings are there because business has been paired back to the bone.  And there ain't no demand.
And with no demand, there ain't no growth in future earnings as the Cost Cutting Cabinet of Horrors is Getting Bare.
And in any case, how the fuck does an equity manager justify discounting equity earnings and dividends at treasury rates when spreads are in the process of widening?
Oh, never mind, I forgot, equity geeks don't pay any attention to the market which serves as the leading indicator (fixed income) since it doesn't add to the confirmation bias portion of the faux research efforts.

That's How.

Er, they don't very well.

But never mind.  if you're down 50% all you gotta do to break even is be up 100% and since stocks historically compound at .......

Thu, 10/06/2011 - 15:47 | 1747094 SheepDog-One
SheepDog-One's picture

I guess I'm supposed to believe that shorts with endless deep pockets keep lining up at the bottom to get screwed and pay for the next market rally, time after time?

This is not shorts, this is the FED piling in big short using your money to provide the squeeze higher fuel....WTF do they care, it doesnt cost them a dime. People only assume the FED is padding stock prices? Well even the FED hedges...its the FED people Im basically 100% sure of it.

Thu, 10/06/2011 - 15:48 | 1747099 High Plains Drifter
High Plains Drifter's picture

hey dog, how many times do people have to see this same old game played out again and again and again before they get it?

Thu, 10/06/2011 - 16:08 | 1747180 SheepDog-One
SheepDog-One's picture

Yea, I guess all these 'shorts' are like Charlie Brown on a Lucy held football day after day? Just totally willing to line up again to get floored? 

Thu, 10/06/2011 - 16:44 | 1747364 Ruffcut
Ruffcut's picture

In 2008, the bounces back up were double on issues with high short interest. Please take note. Bears in general don't like crowds and are not of bull herd mentality.

The bull is comfortable in the herd. Knows nothing else, exept buy the fucking dip. If theri wrong, they buy it again and again til they are deemed right.

Bears have to sneek around at night, not to get attention from bear slayers. THe bear is a loner. The bear that survives, stays away from everybody and everything else. If he tries to stay too long and feast, he will get caught in the crosshairs. Eat quick,and come back if the coast is clear.

Thu, 10/06/2011 - 16:07 | 1747173 knukles
knukles's picture

T'would help solve that mystery if the Fed'd let us get a real honest (good luck) peek at that component on the balance sheet labelled something like "other assets".
Hows about a real audit?

Thu, 10/06/2011 - 16:12 | 1747205 catacl1sm
catacl1sm's picture

I'm sure they'd just hand the books over to the SEC for a shred party before that happens.

Thu, 10/06/2011 - 15:49 | 1747096 DormRoom
DormRoom's picture

let's see if this week has been a swing trade for the algos.  ICI data indicate retails have moved into bonds.  Only big swinging dicks left, which means a lot of volatility ahead.

 

The market players are just position swapping, until Germany exits the EZ (exit by New Years).  Then it'll be a huge collapse.  Anyone owning risk is nuts.

Thu, 10/06/2011 - 15:50 | 1747107 Dr. Engali
Dr. Engali's picture

I know these markets are way over valued,but I'm beginning to believe they will never find fair value. They always seem to find a way to squeeze out the weak shorts.

Thu, 10/06/2011 - 16:00 | 1747148 sabra1
sabra1's picture

i think most shorts wait for a huge runup before shorting, cash out, and wait for the next runup!

Thu, 10/06/2011 - 15:52 | 1747118 John Law Lives
John Law Lives's picture

This is a "fair and open" stock market?

http://finance.yahoo.com/q/bc?s=%5EDJI+Basic+Chart&t=5d

100% FUBAR.

 

 

Thu, 10/06/2011 - 15:57 | 1747133 Motley Fool
Motley Fool's picture

Nothing to see here. Move along.

Thu, 10/06/2011 - 15:52 | 1747119 Josh Randall
Josh Randall's picture

Wish there was truth in advertising like these guys

http://www.youtube.com/watch?v=eKbeC41F2Uk&feature=related

Thu, 10/06/2011 - 15:54 | 1747125 Ned Zeppelin
Ned Zeppelin's picture

Put a big target on yourself if you think shorting is a great idea - this has been a sucker's play, easy meat for the machine.  Just stay away. I'm convinced its all being frontrun no matter what trade you think is right.

Thu, 10/06/2011 - 16:14 | 1747214 alien-IQ
alien-IQ's picture

/ES 30 day chart has been in a perfect downtrend channel. Look at it on a 1 or 4 hour chart or on a 15 or 5 minute chart. It's worked like a charm so far.

Play the trend til it breaks...and regardless of this little pop this week, the trend it still down...until it's not.

Thu, 10/06/2011 - 15:59 | 1747139 Belarus
Belarus's picture

You know, watching this melt-up with ridiculous levels of high short interest is like watching a game of 'UNCLE." Wall Street knows the numbers: low cash levels at MF and HF's, etc. So the easiest trick in town is to ramp the market higher....and watch the shorts capitulate like sheep one after the other, playing right into Wall Street's game--like you had a fucking chance shorts. And just then, when we're toward the end of the shorts squeling UNCLE like the little pie holes they are, Wall Street then takes the fucker down.

You can't win when you're playing against the house--who literally has free reign and endless supplies of the free stuff you worlk so hard for. stop pissing it away you pussy shorts. 

Thu, 10/06/2011 - 16:02 | 1747153 sabra1
sabra1's picture

that's why you've got stop limits and stop loss!

Thu, 10/06/2011 - 16:19 | 1747248 Belarus
Belarus's picture

Yeah, stop limits and stop losses really help when Wall Street gets to see the queue. What a suckers bet.

Thu, 10/06/2011 - 16:20 | 1747256 Belarus
Belarus's picture

Yeah, stop limits and stop losses really help when Wall Street gets to see the queue. What a suckers bet.

Thu, 10/06/2011 - 16:04 | 1747158 orangedrinkandchips
orangedrinkandchips's picture

sad but true

Thu, 10/06/2011 - 16:37 | 1747328 SheepDog-One
SheepDog-One's picture

If it is tons of actual real shorts, which I really doubt...I hope by now theyre so burned they just stay the hell away.

Thu, 10/06/2011 - 17:21 | 1747534 Smiddywesson
Smiddywesson's picture

Not to sound like a know it all, because I'm definitely not, but traders will read a 100 books on trading and never consider the basics.  If you just want to position trade every market, you are destined to feel some pain.

You have to be selective with choosing a time frame and deciding whether to trend trade or trade based on mean revision.  The 12 most important variables to consider before you trade:  Position trading for trend or for mean revision; Swing trading for trend or for mean revision;  and finally, day trading on mean revision or for catching a trend.  I know that's six, but you also have to figure whether you want to go long or short, which leaves you with 12 choices.  Go where the easy money is, or if you can't because of your day job, sit it out. 

A lot of the complaints I'm hearing appear to originate from the market not cooperating with the methods the trader is using, not because the market can't be traded.  Traders who are losing seem to have decided to trade on the wrong time frame using the wrong methodology (trend trading vs. mean revision).  I would think that day traders love this market (I wish I were one of them).  Swing traders who trade off of mean revision probably love it too. 

The old adage is that any idiot can make money in a bull market.  What that really means is a long only buy and hold strategy will work for any idiot in a bull market.  Better to be an idiot in a great market than a genius in a bad market. 

If you position trade this market, you can probably make some long term money, but they are going to screw you along the way.  If you swing trade, or day trade this market, you can make some decent cash.  It's that simple.  The market is going to stay range bound until Bernanke decides he is done with it.  But since he has moved mountains to keep it alive, I wouldn't take a bet based on my ability to guess when.

Thu, 10/06/2011 - 16:00 | 1747140 Zonker
Zonker's picture

Who the fuck cares if its a short squeeze when you are making money?  Trade what you see and you WILL see the V bottom is in!

 

Z

Thu, 10/06/2011 - 16:07 | 1747162 mynhair
mynhair's picture

(www).oprigade.com?

Oprah runs a hacking platform?  Anyway,  the only bottom is zero, at which time I doubt I'd care.

Thu, 10/06/2011 - 16:02 | 1747149 orangedrinkandchips
orangedrinkandchips's picture

DEATH, TAXES AND SHORT SQUEEZES....THREE THING you can always count on....oh...and the sun rising tomorrow.

Thu, 10/06/2011 - 16:02 | 1747151 topcallingtroll
topcallingtroll's picture

You will not achieve your goals by investing in developed economies.

The spy is ok. It is a fair proxy for global development, but now is the time to dollar cost average into brazil....EWZ....you will thank me for this in five years.

Brazil is the superbric with low debt, a consumer economy, and a semblance of the rule of law. This is my long term play. I will not diversify. It is all or nothing for me now with my long term money for the next five years at least. Went all in at 53.70. And will dollar cost average new money come hell or high water.

Thu, 10/06/2011 - 17:25 | 1747567 Smiddywesson
Smiddywesson's picture

Now that we have settled on Brazil, it doesn't erase the fact that cash is a legitimate position, and sometimes the ONLY position.

Thu, 10/06/2011 - 16:03 | 1747155 DonBadajoz
DonBadajoz's picture

Here comes the closing rally once again.... like I said, this is BULLSHIT

Thu, 10/06/2011 - 16:06 | 1747166 SheepDog-One
SheepDog-One's picture

WOW nice +100 DOW rally there in the last 5 minutes! 'Short squeeze' my ass. Its just all manipulation, all the time. 

Thu, 10/06/2011 - 16:30 | 1747306 Belarus
Belarus's picture

Of course it is maniplued. It'd be interesting to know what your return would be if you went long everyday at 12.15 and closed out your position by 12.59. I'm guessing you'd have an annualized YTD rate of return north of 200%.

Thu, 10/06/2011 - 16:39 | 1747333 SheepDog-One
SheepDog-One's picture

Then again in this empty market if you actually placed an order, you'd probably fry all the HTF circuit boards.

Thu, 10/06/2011 - 17:29 | 1747580 Smiddywesson
Smiddywesson's picture

My point exactly in my post above.  Markets THROW money at traders who happen to trade on the time frame (positon/swing/day) or strategy (trend trading vs. mean revision) which is currently favored.  Our jobs as traders is not to bang our heads against the light bulb, but go where the money is. 

Thu, 10/06/2011 - 16:06 | 1747169 RobotTrader
RobotTrader's picture

RF and BAC No. 1 and No. 3 top % gainers today, both up 9%.

Like I said yesterday, the intermediate lows are in.

You guys should be cheering, since the gold stocks are being dragged up kicking and screaming as "investors" are piling into the worst sectors to make a fast buck:  Solars, banks, gold stocks.

Thu, 10/06/2011 - 17:04 | 1747467 topcallingtroll
topcallingtroll's picture

Buy ewz. Go to sleep. Wake up in ten years. I just dont have time to actively trade anymore. Time to quit while I am ahead anyway. That was Jesse Livermore's problem. Never knew when to quit.

Thu, 10/06/2011 - 16:07 | 1747175 alien-IQ
alien-IQ's picture

I'm looking at shorting the /ES in the 1165-1170 range. I think it will reverse there and find a new low, perhaps in the 1050-1040 range.

or not...we'll see.

Thu, 10/06/2011 - 16:08 | 1747178 Dr. Engali
Dr. Engali's picture

These shorts are dumber than hell. They keep jumping in to get creamed by the fed. Maybe someday they will get it. Probably after they are broke.

Thu, 10/06/2011 - 16:11 | 1747192 SheepDog-One
SheepDog-One's picture

I dont believe for a minute its anyone but the FED all-in short with your money providing for all the short squeeze miracle rallies.

Im getting very pissed off.

Thu, 10/06/2011 - 17:34 | 1747590 Smiddywesson
Smiddywesson's picture

but that would mean they are channeling public money to the trading desks of the banks through the short squeeze device.  Pure looting.  However those desks aren't doing as well lately, and yet, the volatility is higher than ever. 

Thu, 10/06/2011 - 16:12 | 1747198 mynhair
mynhair's picture

Suicide by leverage!  Wish Soros would do it.

Thu, 10/06/2011 - 16:09 | 1747183 Racer
Racer's picture

A nice short squeeze pre jobs numbers and earnings season, cos this is the only chance they will get to do it and hence sell to the forced squeezed pips at higher prices

 

Thu, 10/06/2011 - 16:10 | 1747191 evolutionx
evolutionx's picture

European Central Bank commits suicide

 

Michael Mross (www.mmnews.de):

 

Our central bank is committing suicide. On the one hand they are helping banks with billions and billions. They are buying junk bonds, billions and billions. I mean, where does this lead to? It is one of the last nails in the coffin of our central bank.

see complete interview:

http://www.mmnews.de/index.php/english-news/8633-european-central-bank-commits-suicide

Thu, 10/06/2011 - 16:12 | 1747202 SheepDog-One
SheepDog-One's picture

Exactly. While everyone is focused in with their electron microscopes on the irrelevant stock markets, no one is seeing the big picture of all these banks are seizing all the wealth frantically before the rug is pulled out.

Thu, 10/06/2011 - 16:39 | 1747336 centerline
centerline's picture

For now, the market is just a pension life-support device.  The plug will be pulled when the real looting is done, or China rolls over, or whatever is really going on in the "real" world that us peons dont see so clearly.

Thu, 10/06/2011 - 16:14 | 1747218 Dr. Engali
Dr. Engali's picture

Good let them. All central banks must die!

Thu, 10/06/2011 - 16:11 | 1747195 Dapper Dan
Thu, 10/06/2011 - 16:20 | 1747257 bob_dabolina
bob_dabolina's picture

Time to smoke purple kush

Thu, 10/06/2011 - 16:28 | 1747291 Prairie Fire
Prairie Fire's picture

Bullish for drug dealers.

Thu, 10/06/2011 - 17:11 | 1747508 topcallingtroll
topcallingtroll's picture

Old school guys prefer sativa to indica, but it is a less productive crop and less profit. Hard to find.

If you guys ever get to smoke a classic sativa sensamilla you will hate that skunky purple shit. It puts me to sleep. A sativa buzz is electric and energizing.

Thu, 10/06/2011 - 16:11 | 1747196 InconvenientCou...
InconvenientCounterParty's picture

Pretend you are a central bank in need of cash.

Covert manipulation designed to "harvest" from short sellers has no negatives at all.

Hedgers or speculators, it doesn't really matter. They are both threatening the status quo. It would be too damn easy.

Thu, 10/06/2011 - 16:12 | 1747199 uninspired
uninspired's picture

the market giveth & the market taketh away

those of you wining about manipulation- if u cant stand the heat...

Thu, 10/06/2011 - 16:15 | 1747221 SheepDog-One
SheepDog-One's picture

OH but you are in it and no doubt calling it all correctly...yea sure. Wow look everyone, its another paper bag head fuckin expert insider.

Thu, 10/06/2011 - 16:21 | 1747261 uninspired
uninspired's picture

of course. how can you think otherwise? im making money with one hand while posting useless comments with the other. same like 99% of peeps on here

dont worry bout my bag, i can see your sheep was totally worth the effort and will help you 'connect' with other strong personalities here.

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