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QE3 Levitation Day 3... Brings the DJIA To Positive For The Year, In Comic Contrast With The Rest Of The World

Tyler Durden's picture


And so it continues, as it was outlined yesterday, and the day before. There is little to add here: 50 ES points in three days on substantially below average volume (red area chart), robots gunning for VWAP, and nothing but hollow expectations for QE3 despite the clear quandary for the Fed that absent a clear deflationary threat, read a plunge in stocks, it will be very difficult for Bernanke to sell easing to the dissenting votes. The important thing: unlike every other relevant market in the world (Belarus may be a notable exception), the DJIA is now green for the year. In the meantime bonds continue to ignore the whole move in stocks. Of course, if this is just a career protection rally for the end of the month, the reconnection of stocks with gravity tomorrow will be painful. Alternatively, gravity will be even more painful if the Fed does end up disappointing on September 21, which it may have no choice but to do if stocks price all of it in by then.


And an even more amusing relative volume chart: the entire 100 point ES move since the lows has been on below average volume.


And here, once again, is why America is number one... in market manipulation.


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Wed, 08/31/2011 - 16:13 | 1620314 achmachat
achmachat's picture

I got Queen's "it's a kind of magic" in my head now!

Wed, 08/31/2011 - 16:26 | 1620381 Hugh G Rection
Hugh G Rection's picture

Hidden Camera catches footage of Bernanke and Geithner discussing QE3!!!

Wed, 08/31/2011 - 16:31 | 1620409 john39
john39's picture

very clever of them...  gotta make sure that the market buys it.  

Wed, 08/31/2011 - 19:00 | 1620895 Zeilschip
Zeilschip's picture

That's a sweet Panerai! Big dick playa! 

Wed, 08/31/2011 - 17:11 | 1620572 NotApplicable
NotApplicable's picture

The phrase "stuck on stupid" jumped into my mind upon seeing the charts.

Wed, 08/31/2011 - 17:18 | 1620596 SmoothCoolSmoke
SmoothCoolSmoke's picture

I'd be rater partial to ELO's "Strange Magic"  myself.

Wed, 08/31/2011 - 16:15 | 1620322 101 years and c...
101 years and counting's picture

thats a 56 point divergence for ES?  only question is what day will be the 50 point gap down...trapping all newbie bulls?

Wed, 08/31/2011 - 16:33 | 1620413 sun tzu
sun tzu's picture

Peter Schiff was right about the rest of the world decoupling from the US. He was wrong about which way the respective markets would head

Wed, 08/31/2011 - 16:15 | 1620323 IMA5U
IMA5U's picture

shorting is a moral hazard


stay long my friends

Wed, 08/31/2011 - 16:31 | 1620406 sun tzu
sun tzu's picture

Stay out of the casino

Wed, 08/31/2011 - 16:15 | 1620325 Alea Iactaest
Alea Iactaest's picture

Can someone please explain the divergence between physical and GLD today? Thanks, in advance.

Wed, 08/31/2011 - 16:48 | 1620479 Quinvarius
Quinvarius's picture

gld ticker reset is at 4pm.  gold comex reset is at 1:30 pm.  there is no real divergence.  mot yet anyway.

Wed, 08/31/2011 - 16:16 | 1620330 Dick Darlington
Dick Darlington's picture

Well, i have to say IBEX is fighting the spanish reality pretty well too...

Wed, 08/31/2011 - 16:16 | 1620331 RobotTrader
RobotTrader's picture



Bears seem to get shafted every day, because TPTB drives stocks down intraday to keep hope alive.

Lots of guys I know are still clutching TZA, FAZ, etc. sitting on big losses, praying for a steep drop so they can get out.

I know one guy who shorted 1,000 shares of JPM on the big breakdown at $34, he's screaming bloody murder right now.

Wed, 08/31/2011 - 16:24 | 1620365 Sudden Debt
Sudden Debt's picture

10 put options at 34$? That's only about a 300$ loss.... your friend is high roller he?


Wed, 08/31/2011 - 16:26 | 1620380 LoneStarHog
LoneStarHog's picture

These two share a cot at the local mission.

Wed, 08/31/2011 - 16:42 | 1620456 TradingJoe
TradingJoe's picture

I'm LMAO, Robo just does not get it!

Wed, 08/31/2011 - 16:24 | 1620366 Bill Lumbergh
Bill Lumbergh's picture

Let me help you revise that first sentence..."because sellers take profits and TPTB drives stocks up intraday to keep hope alive"...much better now.

Wed, 08/31/2011 - 16:25 | 1620375 Caviar Emptor
Caviar Emptor's picture

Like John Paulson you mean? 

Wed, 08/31/2011 - 16:28 | 1620378 whstlblwr
whstlblwr's picture

Glad I don't know RobotTrader, he laughs at others misery and degrades women. wow, 1,000 shares, LOL!

Wed, 08/31/2011 - 16:27 | 1620386 YesWeKahn
YesWeKahn's picture

Short 1000 shares? He only lost 3.5K, it's SO nothing! On the other hand, if the market did tank, JPM could be a 15$ stock.

Wed, 08/31/2011 - 16:43 | 1620460 Id fight Gandhi
Id fight Gandhi's picture

Pfft, some crowd you hang with, big rollers lol. 1k shares? He'll be in the money soon enough.

Wed, 08/31/2011 - 16:29 | 1620396 IMA5U
IMA5U's picture

here's some Bear Food


but is it a bear trap?

Wed, 08/31/2011 - 16:38 | 1620433 rocker
rocker's picture

Dear Robo, That's what the Elitist Owners of the HFTs do.  They monitor the record short level and say, let's steal their money. A privledge that special software allows them to do. They see all orders and shorts as dollar signs.

With no volume, it is nothing less than a rigged, dishonest market. 

Did you notice how they did manage to get rid of some of their own supply in the afternoon. 

What's a shame is they are scaring off real investors forever.  

Wed, 08/31/2011 - 16:44 | 1620467 Ras Bongo
Ras Bongo's picture

Robot, you must be one of the few making coins trading among ZH bloggers

Thu, 09/01/2011 - 03:27 | 1621946 Ahwooga
Ahwooga's picture

Ras Bongo, back in the kitchen please, Robo needs his dinner cooked for him.

Wed, 08/31/2011 - 16:18 | 1620338 rbsx
rbsx's picture

This whole process is hilarious.


Good news = Good news = Market goes up

Bad news = QE 3 = False Good News = Market goes up


Maybe I'm one of the few people grounded with reality seeing that QE3 will just inflate everything again, but in the short term (because I've got a lot of shorts out there) I've been taking a beating. I have no clue what's pushing the markets these days.

Wed, 08/31/2011 - 16:26 | 1620369 wang (not verified)
wang's picture

  Good news = Bad news

always been the way depending on your perspective

Wed, 08/31/2011 - 16:33 | 1620415 IMA5U
IMA5U's picture

that's right.  

we have a 3 day weekend coming up also.   there will be some government magic going into the weekend.  here's what The Wag The Dog House has to choose from:

  • Ghaddafi & Friends.  We got em right where we want em
  • Merkel blinks an eye.  Eats a gyro
  • The Reconstruction of Irene.  She blew but not that hard.
  • Value investor XYZ eyeing banks.  Doesn't see red.  Sees pink or brown
  • The consmer is not dead.  Long live the consumer
  • Obama jobs bill.  He wants to keep his job and will push stocks higher.
  • Fed always good till close on QE3.  Operation Twisted Sister III commencing
Wed, 08/31/2011 - 16:47 | 1620477 Id fight Gandhi
Id fight Gandhi's picture

Id be in there buying too for the easy buck on the QE inflate. Only problem is there's no real hint of it. There's talk that it might come next month, but no real hints of anything. Ben has been very obvious when it comes to this shit, he's holding back. Seems he's passing to Obama for his job shit.

Qe3 will happen, but it ain't going down with the markets up for the year even as we enter recession. I doubt the fed chiefs even notice anything other than the ES anymore.

Wed, 08/31/2011 - 16:19 | 1620345 Sudden Debt
Sudden Debt's picture



Wed, 08/31/2011 - 16:21 | 1620352 sheeple2012
sheeple2012's picture

Wait til they take BAC, GE and CSCO out of the Dow and add AAPL, LULU and CMG... my target: 25,000

Wed, 08/31/2011 - 16:22 | 1620356 agrotera
agrotera's picture

Any thoughts on how the rats get out this trap they created with thier own catch 22? 

Wed, 08/31/2011 - 16:23 | 1620363 slaughterer
slaughterer's picture

If tomorrow does not close red, then the "Robo-trader Revenge Rally" (RRR) will have stepped into second gear. 

Wed, 08/31/2011 - 16:24 | 1620368 LoneStarHog
LoneStarHog's picture

Three words:  NOMINAL ... REAL ... GOLD

Wed, 08/31/2011 - 16:25 | 1620371 YesWeKahn
YesWeKahn's picture

Tyler, the rest of the world will catch up quick like always.

Wed, 08/31/2011 - 16:25 | 1620373 RobotTrader
RobotTrader's picture



Crazy tape no doubt.  I remember getting singed on those huge bear market rallies in 2001 - 2002 by holding shorts too long.

Proof that faster money is made in bear markets by trading on the long side, jumping in on oversold conditions.

And the bear market rallies always last longer than most expect, sometimes up to 6 weeks.

Wed, 08/31/2011 - 16:44 | 1620465 rocker
rocker's picture

Don't lead people into a Bear Trap. It's too late to jump in now. If your that experienced you know I'm right.

I like to read the news letters of Louis Yamada. Her advise is to sit on the sidelines until it crashes.

And by the way, she is always right and she says it will crash after they drain all the hot money out.

She also likes Gold after it corrects. Probably when the HFT owners crash the whole market.  

Wed, 08/31/2011 - 16:25 | 1620374 Ancona
Ancona's picture


I LOVE Magic!

Do another trick please!

Wed, 08/31/2011 - 16:26 | 1620382 buzzsaw99
buzzsaw99's picture

"market" = Kids can bounce on the bed all day long but big fat fannie can't.

Wed, 08/31/2011 - 16:31 | 1620404 Caviar Emptor
Caviar Emptor's picture

Now that Part I of the trillion$ fiscal stimulus package seems fully assured (mortgage refi) (as I been predicting here for 2 weeks), we will soon hear about the rest of it:

Big jobs package, more business tax breaks (extending the payroll holiday and cutting social security contributions), more extension of expanded unemployment payments, and infrastructure bill. And you'll hear it's all "budget neutral" (!)

Meanwhile the Fed will maintain its current stealth QE (ZIRP, QE lite and as Krasting pointed out, MBS turnover due to the refi stimulus). But no QE3. That would be suicidal. 

Wed, 08/31/2011 - 16:31 | 1620408 mendigo
mendigo's picture

market is being moved by what central planning may or may not do - good luck with that

Wed, 08/31/2011 - 16:33 | 1620412 carbonmutant
carbonmutant's picture

I know they're working on antigravity out at Area 51. market acts  like they discovered it...

Wed, 08/31/2011 - 16:35 | 1620419 HUGE_Gamma
HUGE_Gamma's picture

adjust world equities to % change in USD

Wed, 08/31/2011 - 16:38 | 1620440 I am Jobe
I am Jobe's picture

Fifty Additional Community Banks across the Country Receive $767 Million to Help Small Businesses Access Capital, Create New Jobs

Wed, 08/31/2011 - 17:08 | 1620554 Alpha Monkey
Alpha Monkey's picture

Apart from the 3 banks in CA, and one in CO, it seems like the banks favored were more midwestern and easterly located.  What's the deal with that?

Wed, 08/31/2011 - 16:40 | 1620445 DavidC
DavidC's picture

Just under 1,000 points on the Dow since the 22nd of August (low to high).

All I do (as,indeed, TD is doing) is reiterate that Bernake WILL NOT, CANNOT, QE3 unless there is a reason to do so, and that does not occur at these current levels. Disappointment is coming somewhere, soon.



Wed, 08/31/2011 - 16:51 | 1620489 Id fight Gandhi
Id fight Gandhi's picture


The fed is clearly not showing any public concern over the data sets being dog shit. They claim it will all turn around. Fine, don't cause panic, whatever.

Wed, 08/31/2011 - 16:43 | 1620459 Blorf
Blorf's picture

When's the next big treasury sale?  Need to herd the rubes back into bonds with a nice market crash.

Wed, 08/31/2011 - 17:03 | 1620532 Alpha Monkey
Alpha Monkey's picture

Maybe the will go into gold this time...

Wed, 08/31/2011 - 16:53 | 1620461 Soul Train
Soul Train's picture

Tyler and all readership,

I share cynicism with the charade put on by 'Ba Ba Ba Benny and the Fed' and related bankster mafia.

The Jackson Hole thing was carefully choreographed and plans laid how to have Fed-sters sound bite through this week via CNBC and the WSJ, together with the UAE propping investment news release re Greek bank investment.

I am guessing that there is a concerted effort to squeeze shorts, in hoping to break their investment momentum. Unlike Europe who just bans it, our boys on this side of the Atlantic use clever charades and tactics via the Wall Street and Fed media mechanisms. Damn, how's that for being cynical?

Somehow those algos were in on this during key trading areas like you pointed out. Regardless, sure looks like a DEAD CAT BOUNCE to me.

Thank God for gold and let's not forget our silver. Note to readers, just keep buying physical little by little.

Wed, 08/31/2011 - 16:44 | 1620462 Shirley Wilfahrt
Shirley Wilfahrt's picture


 Misty Snodgrass 


The only time I look forward to a red light is when I’m trying to finish a text. 7 minutes ago


Wed, 08/31/2011 - 16:43 | 1620463 adr
adr's picture

Autozone hit a new all time high for no reason. Chipotle is within spitting distance as well.

For the life of me I can't figure out Hanssen. If you put $10k in HANS in 2005 you would have been up $14 million in 2007 then lost $10 million of that in 2008 ad then made it back to $15 million today.

$10k to $15 million in five years. That kind of BS is what the likes of Cramer use to tell people that everyone should be in stocks. Tht the wealth generation of the stock market is unprecedented. They always cite the amazing growth potential of tese ridiculous corporation as the justification for the insane moves. Problem is the type of growth that could justify doesn't exist. 

It took Under Armour 10 years and getting into 3700 doors to hit $1 billion in sales but somehow Lulu based on market cap should be selling three times the ammount of product out of 120 stores. It ain't happening folks. But keep the fantasy going or Cramer won't have a job.

Wed, 08/31/2011 - 17:37 | 1620670 RobotTrader
RobotTrader's picture

Consumer growth stocks have been huge wealth builders last last 2 1/2 years.

Anyone who loaded big at the 2009 lows is now retired.

Peteybear over at WSB chat said he loaded huge and sold early, left $5 million on the table by not holding through April 2011.

Wed, 08/31/2011 - 18:38 | 1620888 John Law Lives
John Law Lives's picture

"Anyone who loaded big at the 2009 lows is now retired."

How about the people who loaded up big on a basket of stocks that emulate the S&P 500 on July 10, 2000 when the S&P 500 index closed at 1,509.98 for the day...  That is one helluva return over the past 11+ years, isn't it?

Robo, do you think any participant of this board actually BELIEVES anything you say about your stock picks?  You are indeed fortunate that ZH refuses to install an ignore button.  Otherwise, you would pretty much disappear.

Wed, 08/31/2011 - 16:50 | 1620488 MountainMan
MountainMan's picture

Don't fight it, just buy the dips in the last hour of trading, bitchez.

Wed, 08/31/2011 - 16:53 | 1620496 TradingJoe
TradingJoe's picture

What ever THEY wan tot do it will have to pass BOTH SIDES of THE AISLE and that my fellow ZHers I JUST DON"T SEEE! Too much money to ask for without ANY "solid" reason other then BAC is going down or ROBOs friend lost on his JPM short:))! The next 2 weeks will be critical for ALL shorts out there, it is the time when Odumber and Gang needs to make a move or else...Primaries are just around the corner and are a classic in early "indications" as to who will take the WH next year so...better get this sucker downnnn enough to scare the shit out of both dumbfuckers in DC, Dems and Reps alike need to shit in their pants on the propects of losing their "jobs", that will be the time to announce QEwhatever and it will be INTRADY as in Benster gets the call "do it and do it now" we'll "approve" it later! So Robo's JPM shorting friend might still have a realistic chance! Anything else is "speculation" for "salvation" and we all know what happened to that!

My take is lose the shorts once in the green but how much ever and get long cause you might not get the chance once Da Benster gets the CALL!

Wed, 08/31/2011 - 16:54 | 1620502 MountainMan
MountainMan's picture

Kind of off the topic, but it had to be shared:



Wed, 08/31/2011 - 17:06 | 1620524 John McCloy
John McCloy's picture

  This does not make any sense. Why is the market up..just today Roubini was taking credit for the sell off proclaiming on Twitter, "Market pares gains after I predict recession".

 Cripes Nouriel..welcome to the planet..we have been stating we are in an ongoing depression disguised by money printing and digital food stamps from EBT. I am glad you are in favor however of 2 more years of stealing half a trillion dollars from savers via 0% interest rates in order to mask it further and a futile attempt to inflate away our debt. If there is no volume it is not real. Whenever the punchbowl is taken away we will have a market collapse which is why the Fed is locked into perpetual printing and exactly why gold and silver will continue much higher. Math does not lie nor does it have any emotions..if they print they dilute the paper of USD and real money goes higher. 

  Meanwhile bonds are so disconnected from the stock market it proves only 1 thing which is all of these prices are FALSE. The bond market is telling us we are in a second depression. HFTS ping ponging prices higher does not do anything but allow for bided time for the MSM to continue the lie.

Wed, 08/31/2011 - 17:09 | 1620561 Caviar Emptor
Caviar Emptor's picture

Don't ya love it? Our Free market? 

Wed, 08/31/2011 - 17:03 | 1620529 jon
jon's picture

the bernank presents: CASLF, the criss angel stock levitation facility

Wed, 08/31/2011 - 18:17 | 1620828 bill1102inf
bill1102inf's picture

Trade #9 out of 11 coming along VERY NICELEY, for those of you who understand.....


Wed, 08/31/2011 - 18:54 | 1620934 chump666
chump666's picture

close of books end mth, looked very crappy to me.  The meltup was another bulltrap, it's a players market till the super rally...that will never come.

Sept should be brutal, hopefully.  The market is running on nothing.

Wed, 08/31/2011 - 19:52 | 1621076 the grateful un...
the grateful unemployed's picture

they have to get the market out for the year with at least a 3% gain, or risk the riducule of the bond market. equity risk is on a parity with stock risk, or what is a Bernanke for? returns will best the yield on the ten year, Maria can sing about the Santa Claus rally, and these guys make their bonuses. if they dont' something is seriously wrong.

inside tip, if the market drops a couple percent from here buy it, for 5% return end of the year.

Thu, 09/01/2011 - 02:24 | 1621887 seoerlin
seoerlin's picture

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Thu, 09/01/2011 - 06:30 | 1622057 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

market IS going down for a is ordained. The last few days have been a head fake. And a damn good one. But we will not see a market plunge like last month.... I will not speculate (at tghis time) on the bottom of the next fall...but it will not be the BIG bottom. This market will RIP higher after the high as 1300. But then...the shoe will drop like no-one has seen (yes, bigger than 2008)

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shacai's picture

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