So Much For Being Long....

Tyler Durden's picture

Via Peter Tchir of TF Market Advisors

Reverting back to short.  The sell-off this morning felt overdone, in HYG in particular.  We bounced on Bernanke, but it wasn't with much conviction.  Although BAC and MS bounced nicely off their lows, BAC hasn't been able to get green on the day, although MS has, but barely.  With such weak performance from ideal short squeeze candidates, it seems clear that we are not out of the woods yet.  I think the failure to trade up significantly means we go through the morning lows.

There is no longer any conviction that Greece can be saved.  And guess what, it probably can't, it's just a weird feeling being part of the consensus.

I think we see France put on at least outlook negative soon, possibly this week.  S&P came out on the UK yesterday.  They left them alone, but that is probably a sign of a review of all their European sovereign ratings.  Several paragraphs in their UK opinion were focused on government action.  Similar to their focus on the US government, they just happened to like what the UK is doing.

I think several countries will be at risk in Europe, but Germany has remained opposed to increasing EFSF or using leverage.  France has seemed more aggressive.  If the rating agencies wanted an excuse to take the French off AAA, they may have it.  It would also appease a lot of Americans if some other country was feeling pressure on its ratings due to politics.

Today S&P came out with a report where they increase their odds of a European recession.  The timing is interesting as it would give them another excuse to put at least some of the countries in Europe on outlook negative if not on negative watch.  Just a thought, but that is a tape bomb that could easily hit.

I'm more comfortable with better quality high yield bonds, as the yield is finally getting big enough to earn the moniker "high".  Retail seems comfortable holding as they remember how quickly they bounced back in 2009, and so far, there have been more rumors of defaults than actual defaults.

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Smithovsky's picture

Defaults shmefaults, where's the iPhone?  

HelluvaEngineer's picture

Right.  I hear it has speech to text.  ROTFLMAO.

pods's picture

Haha.  Pretty soon they will have a phone that allows two people to talk to each other?


spiral_eyes's picture

I hear the key feature of the new iPhone is that Bernanke can print them.

jdelano's picture

No, no, it lets everyone print as many idollars as they want, which will be all be backed by corresponding U.S. dollars courtesy of The Bernank.  There, fixed it for you.  

LawsofPhysics's picture

Yep, as I said a while back, even the Fed won't fight the Fed any more.  Got physical?  Yes?  Fucking hide it, because otherwise it will be confiscated.  This is not a you average liquidity trap, this black hole will suck everything in.

HelluvaEngineer's picture

I tried to contact the first three but apparently they are all in Chile now.

reader2010's picture

You've got to study Jesse Livermore first. 

Corn1945's picture

So is this guy just telling me to "buy and hold"? Pretty much everything "bounced back" in 2009. This is pretty lousy advice.

slow_roast's picture

Reading comprehension clearly wasn't your strong point in school.  The article just states that RETAIL is not selling because they remember how quick the bounce happened in 2009. 

Raynja's picture

He isn't providing advice, he writes commentary on how the market is behaving. Usually his ideas center around credit and equity market signals.

"Retail seems comfortable holding " is an observation.

Woodrox's picture

When did "one" go long?


Ruffcut's picture

John Holmes did well, going long.  Robo, IQ45, dangertime, hamy..I'm not so sure.

Dangertime's picture

I went long a couple of weeks ago.  I am dollar cost averaging on FCX.....but still feeling pain.  Although I am not worried.  I'm confident I will be very green within a few months.

Motley Fool's picture

You expect QE3 that soon then?

Dangertime's picture

I posit that the market has reached an extreme point of selling and will snap back over the course of 6-9 months.

I anticipate that we do not necessarily need QE3 for that.  Although some "news item" will take the credit for the market reversal.

LawsofPhysics's picture

Sure, the market will come back.  Just as soon as the computers leave and the customers/people/suckers actually come back.

Motley Fool's picture

I would disagree with your proposition.

I do agree that at some point, a extreme of selling will have been reached and a rally will occur from that point.

I just don't think we are there yet.

TradingJoe's picture

And we're back to square ONE!!!

DormRoom's picture

"Hi my name is Peter, and I'm a Short.  It's been 1 day since I've been Short."

clones2's picture

Looks like the intraday charts are rolling over - afternoon flush...? Hell - I'll even say we set new daily lows before close.


clones2's picture

Not much confidence in that call... but any short covering today has been light...

Edward Fiatski's picture

Flush sounds about right.

All these MSM outlets are pumping at this hour the QE, which Bernanke hinted on. Do you know in what context Ben said he would use 'additional measures'? Arma-fucking-geddon in Europe; Lehman 2.0 first, QE thereafter.

Delusion is still running at elevated levels at this hour.


Dear Peter, If you have conviction, please come out and say it. Otherwise keep your vague opinion to yourself.

twotraps's picture

have to agree about the lack of upside follow through.  Although the lows were exactly spectactular, in that there was NO extreme rejection of them with wild spiking activity where Everyone suddenly considered stocks overall a deal....we did get a nice push.   I'm watching 110.50 in SPY, and in XLF 11.35, essentially the old low.  Without progress there, door remains open to re-test the low.  

Bwahaha WAGFDSMB's picture

So far, there have been more rumors of bailouts than actual improvements in the financial system.

LawsofPhysics's picture

According to plan.  The police tell you everything is okay at your front door while you are being robbed out the back.  just waking up are we?

Bansters-in-my- feces's picture

What the fuck just happened to gold and silver.!!!..?????

Is that what the Fucking Pig-Dog Manipulators do with Negative gold lease rates.!!!...????


Threeggg's picture

They sell short 1000's of contracts (paper) to volitize the trade so that they can raise margins (see look at how volitile this market is folks). The CME runs this game with paper certs like the Bernank runs the economy with the printing press.

are they in the same business................................................?

Who is in charge of the VIX anyway ?  Well looky there -  it's the CME.

LawsofPhysics's picture

Yes, but I don't think margins can exceed 100% whereas we still have a lot of trees to make paper for Ben'sprinting press.

LongBalls's picture

Gold and Silver are tracking the general commodity sell off. BTFD dude. They have only two choices. Print or roll out new currency. The debt loads are un-payable and the banks are in trouble once again.

r101958's picture

They are using PM paper proceeds to prop up the market.

....rinse, repeat.

jm's picture

May be just seeing rotation from HG to HY.  But that means the wad is shot and more downside will be brutal.

Glasgow Gary's picture

There is upside risk in the SPX to 1275. Yes, I know that sounds impossible. And it probably won't happen. But it would help to build up the energy required to make our way back to the 666 low of March 2009. Risk that pan-Atlantic policy responses crush shorts is high. And btw, we are hitting multi-year extremes in sentiment. Beware.


tsx500's picture

yep, i just posted the same thing (kinda) on another story here @ZH...   either a temp low was put in earlier (sp 1075) or maybe we go just a little below that (either today or next few days) , but i predict a rally very soon to 1250-ish , but  then it's  lights out !

I am more equal than others's picture

Peter said 'it's just a weird feeling being part of the consensus.' Being permanently contrary is good?  Sometimes, on those rare day, the majority is correct.  Greek is out.  Italy is in the box and the pitch was high and tight.  Spain is on deck.  The old empires are about to die yet again. 

Belarus's picture

I understand Peter you getting baited into going long--though I haven't. All those short squeeze rallies, aglo lifting miracles makes you think any annoucement at all of a coordinated effort to "save" Greece yet again, any inkling that this economy isn't falling off a cliff, and you could see a huge bounce. Clearly, you reversed your trade for risk management. But I just think all bets are off the table until QE3 is immenent (Bernanke says "there are NO current plans in place for QE3) or not. 

Until then, seriosusly, everything is noise. Even if Greece is "saved," which I using liberally as per putting the word save in quotes, all it will mean is a short term rally in stocks. It will do nothing for our economy here save systemic risk for a little while longer and once our contracting economy comes back into focus any rallies will be short lived.

Just stay patient grasshopper. Don't fight the Fed--LOL.

Dr. Engali's picture

Completely useless post.

dcb's picture

no, he was wrong, but it's a good post because he had the courage to make a prediction. most of these people don't

Waterfallsparkles's picture

Aapl killing the Market.

Sambo's picture

What happened to Apple? Did somebody find a worm in it?

r101958's picture

....with a large portion of their sales in China and overseas......a recession over there does not exactly bode well for them.

PulauHantu29's picture

Ben Beefed up the Markets this

We are now officially in Plunge Mode.

r101958's picture

Probably because most have figured out by now that his beef consists of 80% fat and gristle.

RobotTrader's picture

Another day where Fiat Paper rules over Hard Assets