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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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Tue, 10/04/2011 - 13:42 | 1737842 Smithovsky
Smithovsky's picture

Defaults shmefaults, where's the iPhone?  

Tue, 10/04/2011 - 13:47 | 1737871 HelluvaEngineer
HelluvaEngineer's picture

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

Tue, 10/04/2011 - 13:55 | 1737904 pods
pods's picture

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


Tue, 10/04/2011 - 13:55 | 1737905 spiral_eyes
spiral_eyes's picture

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

Tue, 10/04/2011 - 14:01 | 1737930 jdelano
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.  

Tue, 10/04/2011 - 14:11 | 1737962 LawsofPhysics
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.

Tue, 10/04/2011 - 13:57 | 1737913 Edward Fiatski
Edward Fiatski's picture

Speaking of "ROTFLMAO", there's a market for that -

Tue, 10/04/2011 - 14:03 | 1737935 Carbine
Carbine's picture

So it goes!

Tue, 10/04/2011 - 13:48 | 1737877 HelluvaEngineer
HelluvaEngineer's picture

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

Tue, 10/04/2011 - 13:42 | 1737848 reader2010
reader2010's picture

You've got to study Jesse Livermore first. 

Tue, 10/04/2011 - 13:42 | 1737851 Corn1945
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.

Tue, 10/04/2011 - 13:52 | 1737894 slow_roast
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. 

Tue, 10/04/2011 - 13:53 | 1737896 Raynja
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.

Tue, 10/04/2011 - 13:43 | 1737853 Woodrox
Woodrox's picture

When did "one" go long?


Tue, 10/04/2011 - 13:54 | 1737901 Ruffcut
Ruffcut's picture

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

Tue, 10/04/2011 - 14:07 | 1737944 Dangertime
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.

Tue, 10/04/2011 - 14:14 | 1737977 Motley Fool
Motley Fool's picture

You expect QE3 that soon then?

Tue, 10/04/2011 - 14:22 | 1738011 Dangertime
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.

Tue, 10/04/2011 - 14:39 | 1738093 LawsofPhysics
LawsofPhysics's picture

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

Tue, 10/04/2011 - 14:44 | 1738120 Motley Fool
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.

Tue, 10/04/2011 - 13:45 | 1737867 TradingJoe
TradingJoe's picture

And we're back to square ONE!!!

Tue, 10/04/2011 - 13:48 | 1737870 DormRoom
DormRoom's picture

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

Tue, 10/04/2011 - 13:54 | 1737900 FederalReserveB...
FederalReserveBankofTerror's picture

"Hi Peter"

Tue, 10/04/2011 - 16:12 | 1738644 Joe Shmoe
Joe Shmoe's picture

How's that relapse feelin Pete?

Tue, 10/04/2011 - 13:47 | 1737872 clones2
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.


Tue, 10/04/2011 - 13:48 | 1737876 clones2
clones2's picture

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

Tue, 10/04/2011 - 14:01 | 1737928 Edward Fiatski
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.

Tue, 10/04/2011 - 13:47 | 1737873 HANKREARDON

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

Tue, 10/04/2011 - 13:48 | 1737875 twotraps
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.  

Tue, 10/04/2011 - 14:13 | 1737973 reload
reload's picture

I agree, I trade the FTSE and this am (europe time) we wend down in formation with the DAX etc - no suprise at all. Then we took a breather for an hour or so of chop before heading lower on shrinking volume as the US markets opened. We were off the lows and making very slow progress to the upside as BB started to talk. He gave the market a small lift and a chance to exit recent longs (for a very thin profit) before we ground to a halt shortly before our close. Considering the recent sell off, it was a very tame bounce indeed.

Certainly his comments have not given the commodities a lift, so I think the sell off resumes from here. The deeply suspicious speculator in me wondered at the time if his comments were just meant to take the steam out of the general sell off. I have a feeling that the air is being let out of the balloon now and that no shock and awe printing is on the horizon.

Tue, 10/04/2011 - 13:49 | 1737879 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

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

Tue, 10/04/2011 - 14:41 | 1738101 LawsofPhysics
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?

Tue, 10/04/2011 - 13:50 | 1737884 Bansters-in-my-...
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.!!!...????


Tue, 10/04/2011 - 14:03 | 1737910 Threeggg
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.

Tue, 10/04/2011 - 14:42 | 1738108 LawsofPhysics
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.

Tue, 10/04/2011 - 13:57 | 1737912 LongBalls
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.

Tue, 10/04/2011 - 14:13 | 1737969 r101958
r101958's picture

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

....rinse, repeat.

Tue, 10/04/2011 - 13:51 | 1737891 jm
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.

Tue, 10/04/2011 - 13:52 | 1737893 Glasgow Gary
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.


Tue, 10/04/2011 - 14:23 | 1738020 tsx500
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 !

Tue, 10/04/2011 - 13:57 | 1737907 I am more equal...
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. 

Tue, 10/04/2011 - 13:57 | 1737909 Belarus
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.

Tue, 10/04/2011 - 13:59 | 1737918 Dr. Engali
Dr. Engali's picture

Completely useless post.

Tue, 10/04/2011 - 17:41 | 1739135 dcb
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

Tue, 10/04/2011 - 13:59 | 1737919 Waterfallsparkles
Waterfallsparkles's picture

Aapl killing the Market.

Tue, 10/04/2011 - 14:09 | 1737948 Sambo
Sambo's picture

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

Tue, 10/04/2011 - 14:15 | 1737983 r101958
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.

Tue, 10/04/2011 - 13:59 | 1737920 PulauHantu29
PulauHantu29's picture

Ben Beefed up the Markets this

We are now officially in Plunge Mode.

Tue, 10/04/2011 - 14:30 | 1738051 r101958
r101958's picture

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

Tue, 10/04/2011 - 14:00 | 1737922 RobotTrader
RobotTrader's picture

Another day where Fiat Paper rules over Hard Assets

Tue, 10/04/2011 - 14:02 | 1737934 Infinite QE
Infinite QE's picture

Hey Pump-N-Dump boy. How's those lulu, tzoo, etc. garbage longs doing for ya?

Tue, 10/04/2011 - 14:01 | 1737929 Waterfallsparkles
Waterfallsparkles's picture

Beginning to feel like 2008 all over again.

Tue, 10/04/2011 - 14:04 | 1737936 mynhair
mynhair's picture

It's another ramp job.  Only cuz I'm back in TZA.

Tue, 10/04/2011 - 14:10 | 1737952 prophet
prophet's picture

for SPX don't stay too long on the short side - 200 month MA for SPX is very powerful - max time spent below it is about a year and there have been some 10P+ ricochets after touches of the line also consider 200 down to 900 area and 200 up to 1300 as equally likely year end targets

Tue, 10/04/2011 - 14:17 | 1737990 Sambo
Sambo's picture

Stock markets are rigged. No matter where you place your bets in the short term there is a big chance that you'll lose big. 1300 or 900 with equal probability is like tossing the coin.

But my take is that our fiat dominated world economy is going down and fast. Buffet's WMD is about to go off. So SPX is hitting levels far below 900. That is my opinion. Feel free to disagree.


Tue, 10/04/2011 - 14:22 | 1738012 anony
anony's picture

Consider yourself disagreed.   Like you, the markets are rigged, but my take is that I don't know nothin' about where it's headed.

Tue, 10/04/2011 - 15:09 | 1738249 clones2
clones2's picture

2 major Fibonacci retracement levels from the 2009 lows to the 2011 highs.

38% retracement - 1100 = the exact level we bounced on the first major pullback 2 months ago....

50% retracement - 1015 = the exact level of the 2010 lows...

That could very well give you some idea...

Tue, 10/04/2011 - 14:10 | 1737958 Dick Darlington
Dick Darlington's picture

Apparently Greece just went long on tanks for their army. I'm sure the european tax payers are VERY delighted to hear where their hard earned tax euros are going...

Tue, 10/04/2011 - 14:12 | 1737970 warchopper
warchopper's picture

So...anyone going to buy-on-close.

Tue, 10/04/2011 - 14:20 | 1738005 anony
anony's picture

Yup.  Buying TZA with both fists.  This is the time of the  Hunter-gatherer.

Tue, 10/04/2011 - 14:13 | 1737972 Cone of Uncertainty
Cone of Uncertainty's picture

Shit bitch, wait for 3:45pm when we replay yesterday's bid-less market action in financials and every other dog shit company that deserves to be fucking sold into complete and utter oblivion.


Tue, 10/04/2011 - 14:19 | 1738000 anony
anony's picture

So you wouldn't buy CMG 500 January 13 calls, is that what you're telling us?

Tue, 10/04/2011 - 15:22 | 1738326 Cone of Uncertainty
Cone of Uncertainty's picture


Tue, 10/04/2011 - 14:17 | 1737981 virgilcaine
virgilcaine's picture

The Vix needs to get going.. get going vixie,  Needs to be Up on this Down day in Stocks.

Tue, 10/04/2011 - 14:20 | 1738004 virgilcaine
virgilcaine's picture

Either major selloff this afternoon or reversal!

Tue, 10/04/2011 - 14:21 | 1738006 wiscofund
wiscofund's picture

First post on here...hello ZH world

Tue, 10/04/2011 - 14:48 | 1738055 vincent
vincent's picture

Anonymous attacking NYSE is apparently a misinformation ploy to discredit movement

Tue, 10/04/2011 - 14:33 | 1738064 alien-IQ
alien-IQ's picture

the volume on the MS Oct 5 puts sure looks like some people are looking for this thing to go a lot lower.

Or maybe it's just somebody playing one BIG ASS LOTTO TICKET.

Tue, 10/04/2011 - 14:34 | 1738067 HANKREARDON

Peter, if I read your opinion correctly, you rode the mkt down to here and now you are shorting? Genius.

Tue, 10/04/2011 - 14:38 | 1738086 ivars
ivars's picture

Most likely only by the end of October DJIA will be stable under 10000. It is not a collapse that is happening today, just the unwinding of effects of QE2. Predictable since beginning of QE2:

The mistake in this February 6th chart today is 0%. Its spot on within the thicknes of the line I used to draw it.

However, long term picture with deflationary recession in the USA does not look good for DJIA stocks nor recession:

So its deflationary recession  till end of 2014 ( I have longer term predictions, just finetuning them, up to 2015).

After that , in 2015 the USA default on debt, and inflation. That might help to go out of recession, might cause ( even before the default) some wars.

The interesting thing now for me is to predict how much and when vs, what currencies USD will appreciate, meaning that those currencies will buy less and less oil. Will they tolerate it or try to increase the values of  their currencies somehow (e.g. China moving to silver standard?)

More on currency rate forecats  later. Clearly , USD will appreciate almost against every currency in 2012-2014, being a reserve currency and mother of the USA debt that pays for everything.  It has already started.

Tue, 10/04/2011 - 14:50 | 1738148 jmcadg
jmcadg's picture


This market may not be sold to open due to stock borrowing restrictions in the underlying market. Please call in if you require an explanation.

Tried to short Morgan Stanley!

Tue, 10/04/2011 - 15:32 | 1738378 youngandhealthy
youngandhealthy's picture

Peter says it all....


"...It would also appease a lot of Americans if some other country was feeling pressure on its ratings due to politics....."



Tue, 10/04/2011 - 15:53 | 1738497 Randall Cabot
Randall Cabot's picture

So much for this thread...

Tue, 10/04/2011 - 16:04 | 1738576 Zonker
Zonker's picture

LMFAO - you Moron!

Tue, 10/04/2011 - 16:11 | 1738637 Randall Cabot
Randall Cabot's picture


Tue, 10/04/2011 - 16:14 | 1738669 Joe Shmoe
Joe Shmoe's picture

So much for those longs... eh?  

Tue, 10/04/2011 - 17:22 | 1739042 totem
totem's picture

So the big question is: did Peter switch back to long before EOD?

He was just a little early on his call.  This market felt like a spring that was wound too tight... either a bank or sovereign had to fail fast or it was gonna bounce.

I started flipping to long 20 minutes to close.

I'm thinking that releasing that FT story will soften the Moody's downgrade blow ... people will ignore bad news for a day or two now, right?

Eh, we'll see!

Tue, 10/04/2011 - 21:42 | 1739813 rhinotrader
rhinotrader's picture

How is your ass Peter?

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