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Print-Or-Panic, TrimTabs On The Market's Meltup
As retail investors continue to appear significantly pessimistic in their fund outflows ($7.1bn from US equity mutual funds in w/e January 4th - the largest since the meltdown in early August) or simply stuff their mattresses, David Santschi of TrimTabs asks the question, 'who is pumping up stock prices?' His answer is noteworthy as a large number of indicators suggest institutional investors are more optimistic than at any time since the 'waterfall' decline in the summer of 2011. Citing short interest declines, options-based gauges, hedge fund and global asset allocator sentiment surveys, and the huge variation between intraday 'cash' and overnight 'futures market' gains (the latter responsible for far more of the gains), the bespectacled Bay-Area believer strongly suggests the institutional bias is based on huge expectations that the Fed will announce another round of money printing (to stave off the panic possibilities in an election year). The ability to maintain the rampfest that risk assets in general have been on (and the cash-for-trash short squeeze that has been so evident) must be questioned given his concluding remarks.
While we fully expect QE to come, we can't help but question the willingness to meet market expectations so head on (remember when the Fed used to like to surprise) but with ever blunter (and seemingly weaker) tools, what more can they do - leaving a market (and note here we did not say economy as that is clearly not benefiting) that needs exponentially more 'juice' (EUR10tn LTRO?) just to keep from the post-medicinal crash.
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Market is going to OD on juice at some point and turn into a caricature.
Too bad the Chinese are so damn good at lying and cheating, squandering the hope of an alternative to a USD denominated pricing venue.
Well things change, one hopes.
But not yet.
Actually I'm taking this TrimTabs piece as contrary evidence - the market is going to continue to melt up. Not saying they're stupid, just wrong. IIRC last year they worried out loud about who was going to buy all the Treasury issuance. (Bill Gross wondered the same thing and bet against Treasuries. Ooops.)
The argument against Treasuries was compelling - who was going to buy them?
Their argument against stocks is simply "omg. More QE. Something bad could happen."
Really? That's all they got?
S&P 1400 here we come.
[Out of an abundance of clarity I have to say I don't like this view, it seems wrong to me on many levels, and if I bet big in this direction I couldn't sleep at night, both out of a sense of complicity and sheer terror at the thought of what could happen to the "markets" overnight. Nonetheless I believe a sizable melt-up is the most likely scenario here - if only because immediate calamity has been taken off the table.]
Institutional buyers buy when they are told to buy and sell when they are told to sell.
If anyone thinks that people with billions at their disposal got there by being smart, think again. They got there by being told what to do, who to invest in, who to divest in.
Each of these well meaning and well researched pieces falls on the sword of never looking at the root of anything.
Just keep flailing away at the branches and gathering up fallen leaves.
It's a rigged game. Totally and absolutely rigged. At every level.
ori
/shattering-midass-curse-gold-de-spell-ed/
Ron Paul gets excited over the freedom message and sometimes stumbles over some words cause he can't believe anyone is listening this time around.
Me
Here's what I'm talking about;
Ron Paul Highlights in 1/19/2012 Presidential Debate
http://www.youtube.com/watch?v=7MWcp6vj61Y&feature=player_embedded
What Is It About Ron Paul? http://www.youtube.com/watch?v=eUXNfk4MMlI&feature=player_embedded
Europe going into recession isn't going to matter? I'll ride this wave as high as it goes, but as soon as the VIX cracks 25 I'm done. And earnings reports have not been very good, if we're lucky this will last until April with most of the gains already behind us now. Raise some cash, guaranteed you'll get a chance to use it before end of the year.
Buy and hold is dead. New normal buy the panic and sell the complacency...
i will buy the vxx when hey announce more QE. Precious metals are cheap now. And I will short the usa 10 year once europe has finished imploding and we have negative yields.
From 1993 to present, on average the only negative returns for the S&P when the vix is broke up into 2.5-5 point ranges is when the vix i between 17.5-20. This includes vix numbers from <12.5 at one end and > 30 at the other.However, past is not prologue, as in 19 years we have not seen times like this regarding debt.
http://econompicdata.blogspot.com/2012/01/vix-as-predictor-of-equity-returns.html
Ben will PRINT PRINT PRINT us into bankruptcy.
Oxymoron.
There will be no new QE3 announced next Tue/Wed when the Fed meets. Get ur shorts on.
Ben has printed us into bankruptcy and taken the rest of the world along for the ride. Just as World War I was inevitable in hindsight, so will be the complete insanity of the Central Banks and politicians who are leading the entire world over the cliff.
barliman
Their actions are insane for us... for themselves it all makes A LOT OF sense, believe me.
It's like a car running on fumes and the driver insists on putting pedal to the metal
hehe ... http://www.youtube.com/watch?v=TuEdU_lrtZk
There hasn't been a total currency collapse yet because of a crisis in confidence. So far there has been just a crisis in cons.
StockProdigy, I don't know how you can type with your hands full like that. Obviously the coordination in your toes must be extraordinary.
Oh! Government entity intervention in the wings?
Scope out this:
http://www.bloomberg.com/news/2012-01-20/lagarde-joins-warning-on-fiscal-cuts-as-financial-leaders-head-to-davos.html
LaGarde is instructing governments not to cut spending OR raise taxes because it will be GDP contractionary.
"Policy makers should manage fiscal consolidation to promote rather than reduce prospects for growth and employment," the Global Issues Group said.
WTF DOES THAT MEAN??? THEY HAVE NO IDEA WHAT THEY ARE SAYING, BECAUSE THEY ARE SAYING NOTHING.
Its called pull it out of your ass policy making.
There are no resolutions other than monetization or liquidation, no prizes for which they will choose.
I suspect pension funds are playing Bury the Salami with themselves hoping their clients won't notice their inflamed anuses one day.
Scope out this:
hundreds upon hundreds of Anon operatives are in a plotting frenzy,
Anonymous Goes on Megaupload Revenge Spree: DoJ, RIAA, MPAA, and Universal Music All Offlinehttp://gizmodo.com/5877679/anonymous-kills-department-of-justice-site-in-megaupload-revenge-strike
SOPA backlash, bitches!
Seems more like a set up to me.
Then there are the TV news reporters and talk show hosts who are nothing more than taxpayer money grabbing whores. Their official title should be, 'corporate pitchmen/salespersons", who are constantly advocating to spend more taxpayer money and are constantly trying to sell you something.
Did I get that right?
I think the most secure job out there right now is an Economist. Where else can you jerk off, win Nobel Prizes, and completely phuck up a country?
They mean inflation
I wonder how many stocks the Fed has on their balance sheet
All of them. The one's denominated in Federal Reserve Notes, anyhoo.
starting with freddie, fannie, aig and gm??
isn't that enough?
Institutional investors are the new retail investors.
lol
true, they get gamed by HFTs.
...that get gamed by central banks
and so on.
Intitutionals pump, retails chase, HFT game them along the way, and then CBs crush all hopes.
Copy
thats it.
Till Taleb's blackswan shows up.
...and that could be at anypoint.
"Who exactly will keep the system afloat?"
The aliens that will be invading Earth, of course! Right Krugman?
Robottrader.
Actually, Eurozone crisis explained in 3 minutes:
http://www.youtube.com/watch?v=NOzR3UAyXao&feature=related
With this latest upward run, equity prices are now already pricing in QE3. If next week it doesn't happen as many think is planned, we may finally see the significant and much anticipated sell-off. SPX 1,314 seems well beyond where the market should be based upon slowing global GDP and the still unresolved EU issues. I'm long oversold coal and may soon start position in natural gas, but I'm also refreshing OOM puts for Feb/March just in case the house of cards falls...
There are a number of clear parallels betwen the current "institutional investing" and addictive behavior:
1) Believing that what you have done so far has been good, doing more will be better. The ability to objectively analyze situations and behavior become distorted by the user's subjective desires and a belief that the drug of choice (QE) is THE pathway to achieving those desires.
2) Validation of one's judgements is only accepted from one's peers (the other addicts) because the nature of the goals being pursued and the manner in which they are being pursued (perceived insider information on the scale and timing of any QE action) limits the number of participants into too small of a group behave in a manner consistent with previous statistical analysis. Ironcally, this small set of players is the clearest of red flags - the normal Bigger Fools (the retail investor) having withdrawn from the game means the Bigger Fools will be found among the addicts.
3) Addicts are notoriously untrustworthy. In this instance, it will only require one of the dealers/users (GS, JPM, BAC, insert your favorite consipracy organization here) to decide they need to get out and take everybody else's money with them to initiate a cascading effect beyond control.
One last personal observation - addicts love drama.
So, how many days of less than 1% up or down in a row has it been now? What's the record?
barliman
do ya remember that seinfeld show where kramer and george take a car out of a dealership for a test run and kramer pulls a crazy[idea] and decides to find out how far the car will go once the fuel gauge registers empty - driving-on-fumes-?
Rampfest until the DEUCE of SPADES , drops out of the shitter of Royal Flushes. I'll stick with the spot market thank you.
The banks around the card table:
Jacks, Queens and Aces their faces in hope,
Do Benny deliver our dope.
The current update on ICI's numbers says the mass exodus has paused. Money came out of the money markets too. One week does not a reverse trend make, though.
This is like last year. The Managers must be talking some money back into their funds.
But with March coming, this could be the shortest pump and crash we've had in the past 4 yrs.
I've been telling other MainStreeters to buy only exceptional price/value points, and no companies you wouldn't be willing to take to hell and back (someday).
The stock market is a complete shithole.
The published price is no longer the clearing price, hence the BS.
Too many people got burned three years ago. They actually believed their financial advisors.
Flash forward three years. Same story, same FAs. Only problem is a lot of people are starting to figure out why they haven't made their money back if they "just stay in the game" and the folks that lost their savings still have cushy jobs.
Retail investors will chase the market. Everytime.
No they won't. The only people who ownstock under the age of 40 are the ones that work for the big banks playing the game and the IPO brigade lucky enough to have a jewish sounding last name. You think Facebook would have recieved the money they did if the "founder" was named Mark Johnson? 90% or more of the outstanding stock shares are probably held by people 55 and over, they aren't hanging on to it much longer. The only players left are the institutions. At that point it won't matter if the stock market goes to 100k. The money could only be used to finance buyouts at that point. Once everything is consolidated to a handfull of corporations so large it becomes impossible to turn a profit, our system is over. We are almost there already.
If the Dow gets above 13k you will see the retail investor back in the market.
There is quite a bit of proof that retail investors are not falling for the pump and dump scheme anymore. That's what happens when you burn retail investors twice in a 10-12 year period.
Wow, had at least 5 VCs try to schedule time with me at Happy Hour today to hear my pitch. All of them touting they had millions to spend. Is this where all the funny money is going?
Which comes 1st the PRINT or the PANIC, or maybe the PANIC and then, then, then, A NEW DISCORD. I'm a patient human. I can wait to see the out.
They are simultaneous. It's a PRINTANIC.
The whole stock market is now in the Golden Turdball.
We just landed on Park Place and can't pay the rent. In the meantime we should plan on moving into one of the railroad cars.
I am having many angers because the peoples who are reporting the news to the peoples are not having many words about the talking by the Ron Paul who is being a candidate for being the president. At the debates he is not having questions and the news he is having he is not having because the peoples who are making the words of the news are not having many words for anybody but the man who is Romney and the man who is Newt and the man who is being like the name of frothiness. The man who was having no peoples who were voting for him whose name is Perry is having more writing by peoples who make news for peoples to read than Ron Paul who is a man who has many people who are voting for him. It is very bad to be having no news about peoples who the peoples who are writing the news decide for their own selves to be satisfied to not be writng words for people they are being the ones to say nobody needs to be hearing news about. What a terrible place America is for being a place for fair news.
Find other news outlets. Seek out sources for both sides. Read them both. The truth is often either inbetween or if they debate A and B, suspect the real truth is C.
alot of meltup going on up in here
Im sick of hearing how QE3 is on the way, its already happening please look at M2. There is a reason that they wont let us see M3 anymore.
Throw Bernanke in jail or free Madoff!
It starts at 2:00 AM CST on the dot. Volume in ES jumps and price starts to trend upward right into the Wall Street open. I'm sure there's got to be an explanation for the 2:00 am jump n volume.
Limey Earlybirds
2:00 AM CST = 8:00 AM GMT (London)
market is about to get brutal.
The wall of money is out there , from the Fed to Europe to Japan . The powers that be beleive that they will stop any Lehmann type event . As a reference Unicredit borrows 50b from the ECB. No banks or major companies will be allowed to go bust -ever -looking at you GM. We have been swept by State contol no different from Russia 50 years ago. Governments telling bankers how much bonuses they can have unthinkable 5 years ago.
As down side movement of stocks is protected ignore ZH the bearish thread does not apply anymore . Go long stocks take advantage of that protection .It is like a free call option . It works till it doesnt .At the moment it does.
If that's the case then prepare for hyper-inflation unless the economy starts to skyrocket any time soon. TPTB may bail out any risk, however this means that money supply has to grow much faster while the economy will continue to slow down (due to misallocation). Once they stop bailing out the only possible outcome is a systemic crash, causing a full stop worldwide.
Inflation is the only way out -solves the problems for the bankers / governments -inflates there underwater assets. it does kill anyone who has savings and zero debt ie the folk who have done the correct thing these past years. If we live in a democracy and that is debatable - then if the majority are in debt and wish to see that reduced then inflation is the only way out. Feel sorry for any retirees , your the minority toughluck.
Rate of change for 5, 10, & 20 periods on the Baltic Dry Index are all at levels not seen since Sept 2008.
One could argue that things are much worse NOW than then because of the already low levels for the BDI -- which has fallen under 1,000 recently after being over 11,000 in 2008.
To put it mildly, a -90% drop in BDI strains the credibility of the numbers out of China.
With the money supplies as abundant and growing as they are due to printing/intervention...with profit margins as high as they are...with the S&P making a full recovery back to 1,300...crude back over $100...shouldn't BDI be the same/higher than it was? OBVIOUSLY something is amiss...
well i hate to be an obvious neggy nellie but this man is a racist. besides our slave master and is minsistry of "truth" tell us everything that can be is getting better because of his pigmentation. hey!, look a bush at a atm ...
When the Economy Runs Aground
By Bill Bonner
Reckoning today from Los Angeles, California...
There is a rumour - which we started ourselves - that Captain Francesco Schettino of the Costa Concordia has been invited to join the Federal Reserve.
Obviously, in view of the recently released minutes of its meetings in 2006, the Italian ship's captain and the Fed are meant for each other. Both are prone to error, cowardice and confusion.
Cruise ship's cook says captain ordered dinner after crash By the CNN Wire Staff updated 8:34 PM EST, Thu January 19, 2012markets have to move higher, at least here in Europe, in order to squeeze out the London HF crowd et al, as all the long/short bunch was fucked last year, being completely behind the curve. they are using FT headlines and Bloomberg TOP to heat up the party, but those guys have to march to Canossa. Then, we can talk seriously. DAX up 8% and EUST50 4.5%, that's a lot for 20 days, always being a HF. So look at certain moves from this point of view and play against them when they covered and will be again....behind the curve. BTW, keep an eye on EURUSD. but this is all com knowledge, so sorry to bother you my friends.
' ... and the huge variation between intraday 'cash' and overnight 'futures market' gains'
A technical question here: how can a humble private investor like me invest (short term, long and short) in this overnight 'futures market' ?
Short gold AM. Long gold PM.
Rinse, wash and repeat.
......."who will keep the sytem afloat "
Lloyd Blankfein ... He doing gods work !
But is the Fed so brazen as to initiate another QE (overt that is, since I am completely convinced that it has never stopped, covertly) without first a market take-down, which would be requisite in order to quell populist outrage? Or are we beyond any facade of integrity now?
Wow. Thx Tyler for confirming what I thought it was happening.
Then, big trading desks have been pushing the market up and no dumping to retail traders has occurred since there are not many of those guys left. They're broke by now.
Hence, somebody has got to collapse as MF Global did, if nobody to dump to comes up.
QE3 announced? Sure, right when monkeys fly outta my butt. Not gonna happen.
First they came for a few of the big sub-prime mortgage packagers,
and I didn't speak out because I didn’t work at the Bear or Lehman.
Then they came for the prime mortgage debtors,
and I didn't speak out because I wasn't a homeowner with debt.
Then they came for the retail equity investors,
and I didn't speak out because I didn’t have a retail brokerage account.
Then they came for the small time commodity trading advisors,
and I didn't speak out because I was a institutional investor (and MF Global was beneath me anyway).
Then they came for the institutional equity investors,
and I didn't speak out because based on principle I didn’t buy overpriced stocks.
Then they came for me,
and there was only ZeroHedge to speak out for me (and because of recent Congressional legislation they had their proverbial plug pulled; and to be honest, I had guns and gold buried out back and never liked investing anyway; and anyway what has Tyler ever done for me?).
"Medicinal"? I knew fiat currency was an addictive drug. As we have seen, QE is more a placebo sugar pill, than medicine. The expectations in waiting for QE 3 will be interesting to watch. The shakes and chills have been going on for a month or more. The markets want the rush, and don't care about the cure.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
The machines have taken over the market once gain. This is 2010 all over again....all dips are buyable until further notice...
Me-thinks-is-that there is no consensus on the part of institutions. There are always some players like the good old Bill Miller. But significant number of institutionals are also watching. That is way Wall Street does not report good trading number.
Our financial advisors still pushing buy and hold based on historical performance. I am resistant to this strategy due to the inability of anyone to factor in accurately current national debt levels, future debt service, and increasingly scarce petroleum resources. We can't just head West to find our new frontier. We can't just leave and find a new place to prosper as a people. I don't know where we go from here.
Bullshit TrimTabs.
Does it always have to be about potential QE3?
Go fuck. Even without QE3 the market will still rally.
Boom! You used some profane word but I see and agree with your point. +1 sir. hp 564xl ink cartridge
Market movement and investors’ expectations don’t always go hand in hand. Moreover, by the time a piece of new hits the printers, it is usually already outdated as those with first hand information would have made their moves by then.
Simon - http://www.idpro.co.uk