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SSDD - Same S...&P, Different Day

Tyler Durden's picture




 

The last six months' market behavior is somewhat breath-takingly similar to the same period a year ago. With global central banks pumping (RoW replacing Fed for now), energy prices soaring, and since the market is the economy - hope is rising that we are doing better; the drivers of the asset price reflation are similar too. While Treasury yields appear to be bucking this sentiment-euphoria, perhaps it is the because the US is the hottest market and all the world's money comes here that we are 'decoupling'. It seems the stakes are higher and scale of known unknowns even larger this time as the can that we are kicking is gathering a lot of trash as it rolls down the road.

 

 

Perhaps the 'events' and collateral needs around CDS roll dates and IMM dates (highlighted in the chart)  - which just happens to coincide with the March Greek bond maturity next month - will prove once again that this time its no different.

And from Goldman on the 'similarities':

What’s similar?

 

A sharp increase in oil and gasoline prices with political volatility mounting in the Middle-East. The most obvious similarity to last year is the fact that crude oil prices have been rising sharply since the turn of the year. Between December and the last week of February 2011, Brent crude prices rose by about 20%. Over a similar period – from December till now – crude prices have risen by about 13%. While the extent of price rise over this three month period is a bit less this time around, crude prices have started at a higher level. So Brent crude increased from about $89/bbl to about $106/bbl from Dec till late-Feb last year, whereas the move this year has been from $109/bbl to $122.9/bbl. Gasoline prices have also increased sharply both this year and last year. Since December, the increase in gasoline prices has actually outpaced the one from last year – rising by about 18% this year versus about 10% last year. Last year gasoline prices went on to rise by almost 50% between Dec and end-April, and this was an important part of the explanation of the subsequent US economic slowdown in 2011.

 

Another disconcerting similarity to last year is the concerns around political volatility in the Middle-East with the potential for supply disruptions coming on top of a tight market. After earlier political unrest in Tunisia and Egypt, Libya was in the throes of a political revolution by mid-February, which rapidly deteriorated into civil war by March. The ensuing prospect of disruptions from a significant global oil producer caused oil prices to spike further, so that they exceeded $125/bbl by early April. This time around, concerns have been centred on Iran, and the possibility of supply shortfalls from there either because of embargos or disruptions in key shipping lanes.

 

A backdrop of improving cyclical momentum across the world. The increases in crude oil prices both last year and this year have come against the backdrop of improving cyclical data. From December through Feb last year, our aggregated global PMI measure increased from 55.1 to 56.5. And this year too, global PMIs have increased from 49.6 in November to 51.8 in January. The difference in levels is worth noting: the oil price increases this year have occurred with PMI levels much lower on average than last year. That said, the increase in PMIs this time around is more even – with increases both in EM and DM, whereas the last year the increase was primarily focussed on DMs. EM PMIs were more or less flat as most EMs were tightening policy to restrain high rates of inflation.

 

February brought the first signs that the higher commodity prices were beginning to weigh on growth. As oil prices moved higher through February last year, we saw the first signs that growth-sensitive assets started to falter. Our WF US Growth basket peaked in February last year (even as the index itself continued to move higher) after increasing by 12% since December 2010, and this year too, our growth basket has struggled to advance in recent weeks despite the tailwind of better macro data. Other growth-sensitive assets like copper also exhibited a similar pattern.

 

Charts: Bloomberg (courtesy of SocGen's Albert Edwards)

 

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Fri, 02/24/2012 - 10:37 | 2192467 dvsteenk
dvsteenk's picture

10-minute charts of futures on all main stock and commodities indices show us how fake and broken the trends are, how manipulated it has become, thanks to CB and HFT providing "liquidity". They're all increasingly reflecting how the insiders engage in informed and well orchestrated sudden sweeps up and down , with the sole purpose of squeezing out longs and shorts, and killing their positions in FX, ETFs, stocks, gold, options, turbos and other financial derivatives

I wouldn't be surprised if the issuers of derivatives share all available information on the short or long interest positions of their clients in real-time with their proprietary trading departments - the clients are sitting ducks. Or they do the opposite, taking huge positions in derivatives and start bidding up or selling down the underlying asset.

the kills seem to be prepared or executed overnight, close to expiration dates, and probably are based on taking opposite interest positions (GS-style...) in underlying or correlated assets, which are unwinded at a small loss or profit, but with a net positive result from the stealthy raid

Does this make sense, or am I paranoid?

Fri, 02/24/2012 - 10:43 | 2192496 quebecgold
quebecgold's picture

The fun begins soon,

Let free the Tyler Durden in you!

Today (02/24) everyone tweets ‘’Greece Defaults’’ on twitter at exactly 10:03 (ET).

That's in 20 minutes!!

It’s time to see how bad the Algos will react to this storm of tweets.

We need all of you

Fri, 02/24/2012 - 10:48 | 2192516 SheepDog-One
SheepDog-One's picture

I even just signed up to Twitter to do it....CRASH THE ALGOBOTS! 

You DAMN DIRTY ROBOTS!

Fri, 02/24/2012 - 10:56 | 2192545 Ol Man
Ol Man's picture

I don't tweet ... but I'll post a comment on LinkedIn and a blog post at...

http://jeffersoniantoo.wordpress.com/

;)

Fri, 02/24/2012 - 10:49 | 2192518 duo
duo's picture

The indicators I follow (up vol vs down volume, etc.) look a lot like the time just before the flash crash.

Fri, 02/24/2012 - 10:39 | 2192481 JPM Hater001
JPM Hater001's picture

Rhyming again I see.

Fri, 02/24/2012 - 11:32 | 2192696 YC2
YC2's picture

Well, this year is an election year, so maybe that shakes things up

Fri, 02/24/2012 - 10:41 | 2192488 SheepDog-One
SheepDog-One's picture

'Shit and Poor's' now? OK I can go with that.

Fri, 02/24/2012 - 10:42 | 2192491 eigenvalue
eigenvalue's picture

I'm really confused why markets are soaring. A Greek default is almost a certainty by now but nobody seems to give a fuck about it. Perhaps next month when Greece defaults, it will simply be a non-event for markets.

Fri, 02/24/2012 - 10:47 | 2192499 SheepDog-One
SheepDog-One's picture

<;P

Fri, 02/24/2012 - 10:52 | 2192531 eigenvalue
eigenvalue's picture

But shorts were burnt again and again in the past 6 months. I wonder how many short sellers are still "alive"...

Fri, 02/24/2012 - 11:04 | 2192590 WonderDawg
WonderDawg's picture

I've taken some hits but I'm still alive. Waiting for evidence of a reversal before I commit any more.

Fri, 02/24/2012 - 10:46 | 2192505 SheepDog-One
SheepDog-One's picture

'Markets soaring'...well Im not too confused after all $7 trillion pumped into TBTF primary dealer banks to sop up all the garbage out there can do wonders and provide the needed crowd control. Which means it wont last long, these people are desperate now. And while everyone assumes Greece is the lynch pin it all hangs by, probably be something totaly different out of the blue one morning 'no one saw coming' of course. Well I'm well clear of these blast zone markets thats for sure.

Fri, 02/24/2012 - 11:20 | 2192642 poor fella
poor fella's picture

Because oil is up due to a turnaround in the US economy. At least that's what the Bloomberg scroll told me!

Fri, 02/24/2012 - 12:44 | 2192988 slewie the pi-rat
slewie the pi-rat's picture

it's deja vu with a "leap"ing catch, all over again!
[yogiB]

 

Fri, 02/24/2012 - 10:47 | 2192511 digalert
digalert's picture

 

 

I rubbed my CNBS Hopium stone and all I got was this

stupid DOW 13K hat!

 

Fri, 02/24/2012 - 10:52 | 2192530 HyperLazy
HyperLazy's picture

Just like clockwork, 9:45am dip and now for the magical flying rope /ES trick...

Fri, 02/24/2012 - 11:13 | 2192613 dvsteenk
dvsteenk's picture

glad i'm not the only one noticing these magical spikes and drops that make no sense

but I suspect the top is in, they're just trying to hold it up above a certain level long enough for their algos to clear out, and reverse strategies perhaps

Fri, 02/24/2012 - 11:01 | 2192575 Awakened Sheeple
Awakened Sheeple's picture

I wonder if the algo's use Facebook?

Fri, 02/24/2012 - 11:16 | 2192620 poor fella
poor fella's picture

Nobody buys "Microsoft Office 2012" when the corporate version of 2k still works.

So why wouldn't the Fed run "Market Ramp 2009" yet another year and save a buck?

Expect them to re-run this buggy bloatware until the end of 2014 and beeeeyoooond.

Fri, 02/24/2012 - 11:18 | 2192634 thetruthseeker
thetruthseeker's picture

Just wake me up when "Project Mayhem" starts.  

http://www.infowars.com/report-more-than-100000-americans-are-domestic-terrorists/

I imagine with the new DHS program of monitoring social media, this number is soon to greatly expand as they sweep their net and begin to include such radicals as Zero Hedge readers.  No need to worry, though.  If you are half-awake, you have probably already made it on to some sort of government list.

Fri, 02/24/2012 - 11:29 | 2192683 poor fella
poor fella's picture

Right now the markets feel like the roulette wheel after all the bets are placed and the dealer sweeps a hand hard and fast across the table while saying, "NO more bets".. Now everyone watches with baited breath to find out how smart they are.

When will people realize day-trading should be a hobby, not a career. Especially one where you expect to make your mortgage and grocery money every month..

I doubt there are many career lottery players.

Fri, 02/24/2012 - 11:53 | 2192791 dvsteenk
dvsteenk's picture

being smart is irrelevant (unless you use it to decide it's smarter to stay out of this rigged game)

unfortunately, there is someone or something under the roulette table making the wheel stop where everybody loses, except the house, and this is considered to be a legal practice

Fri, 02/24/2012 - 12:48 | 2193008 Shleetat Shiksa
Shleetat Shiksa's picture

What we need is a Fukushima Event now, otherwise the insanity is likely to continue....upwards.

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