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Today's Mad World Of Markets

Tyler Durden's picture


Yes, volumes are low; yes, liquidity is very thin (just look at the gaps in European Government Bond - moves); and yes, US equity market ranges remain narrow; but the somewhat paradoxical movements in the last 30 minutes are worth noting for their total schizophrenia. After being generally well-correlated (for hours/days), the relationship between EURUSD, 10Y Treasuries, US equities, and European Sovereign bond risk has broken down this morning. GDP data saw a 'risk-on' style move (EUR up, TSY yields up, Stocks up, and EGB risk lower). But from the US day-session open we now have EUR weakness with USD strength weakening the bid under US equities but at the same time Treasuries are selling off and EGBs are rallying (rather notably). It is indeed a mad world.

European Government Bond (EGB) risk (black - inverted), EURUSD (blue), 10Y TSY yield (pink), and S&P 500 futures (green)


but this looks like a QE-off trade...


Charts: Bloomberg


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Wed, 08/29/2012 - 10:39 | 2746477 mrktwtch2
mrktwtch2's picture

a ball of confusion..

Wed, 08/29/2012 - 10:43 | 2746492 Xibalba
Xibalba's picture

and metals are getting CB'd

Wed, 08/29/2012 - 10:50 | 2746524 Nothing To See Here
Nothing To See Here's picture

I smell a cartel carnage in the PMs right before Spain explodes and implodes into the void at the same time...

Wed, 08/29/2012 - 10:51 | 2746529 Xibalba
Xibalba's picture

modus operandi 


Hedge with paper and buy phyzz

Wed, 08/29/2012 - 11:01 | 2746564 ParkAveFlasher
ParkAveFlasher's picture

yep, still shiny!

Wed, 08/29/2012 - 11:05 | 2746576 malikai
malikai's picture

Today's world might be mad, but I'm seeing near perfect correlations on my models. Time to update expectations, folks.

Wed, 08/29/2012 - 11:13 | 2746601 flacon
flacon's picture

What do your models say? Are we going to get QE or not? If not, then do you suppose the metals will be crushed or will rally? The central planners really did a mind-job on all of us - dithering this way and that, up and down, left and right, now you see it - now you don't. I think everyone is confused at this point - and that's their goal, a thick fog of uncertainty is their goal.

Wed, 08/29/2012 - 11:15 | 2746619 WeAreJellyfish
WeAreJellyfish's picture

fuk every single one of us

Wed, 08/29/2012 - 11:29 | 2746673 flacon
flacon's picture

Yeah, it's the interest on credit created out of nothing that is the killer. 

Wed, 08/29/2012 - 11:33 | 2746680 malikai
malikai's picture

They don't necessarily say anything, other than the expected price of their target instruments at the current moment in time. I don't bother or believe in predicting the future. I simply look for dislocations in the current time and exploit them. Today in 4X, we saw almost every dislocation from last night close. And for me, that was a cool couple grand in returns. Yesterday was even better. Metals are a different story, as gold continues to be swinging around wildly (probably like you say, because of J-hole), while silver went right back to near zero divergence, and platinum is still all over the place probably because of the supply issue and J-hole.

I think your fog notion is spot on. That fog is making people do stupid things, particularly in spot metals, but also in energy. That's why I don't trust my feelings of things and instead look for the closest thing to truth: math.

Wed, 08/29/2012 - 10:43 | 2746493 slaughterer
slaughterer's picture

Small, sharp movements on the ES futures like yesterday.  

Wed, 08/29/2012 - 12:33 | 2746894 silvermaister
Wed, 08/29/2012 - 10:49 | 2746516 battle axe
battle axe's picture

Wait for Israel to make its move, then we will see some volume.

Wed, 08/29/2012 - 11:08 | 2746573 resurger
resurger's picture

Israel Central Bank will dump first, then the Wall Street lapdogs, btw can you track their equity holdings? Do they publish their stock holding, i guess so

Tradable Securities 248 (NIS Million) i dont know how much is that, i guess what would be 248bn in Foreign Currency Asset Based

I hope the Sell orders will get Filled

Wed, 08/29/2012 - 10:40 | 2746481 partimer1
partimer1's picture

If we can keep the market like this till Nov., we will get Obama elected.  would that be something?

Wed, 08/29/2012 - 10:41 | 2746482 The Axe
The Axe's picture

Of course....I am short PINK  and long BLUE   lol

Wed, 08/29/2012 - 10:52 | 2746533 Itch
Itch's picture

That means youre homosexual, no?

Wed, 08/29/2012 - 10:44 | 2746484 intric8
intric8's picture

Numbers are just a human construct, man! Here, smoke this bowl, man! Groovy

Wed, 08/29/2012 - 12:13 | 2746830 FRBNYrCROOKS
FRBNYrCROOKS's picture

So is time!

Wed, 08/29/2012 - 10:44 | 2746499 LawsofPhysics
LawsofPhysics's picture

Looks like U.S. paper needs some more attention.  paging Mr. Bernanke... 

Wed, 08/29/2012 - 10:48 | 2746511 Lohn Jocke
Lohn Jocke's picture

If you need him, they'll shine a  spotlight in the sky over the fed... it's in the shape of a giant cock.

Wed, 08/29/2012 - 10:55 | 2746541 A82EBA
A82EBA's picture

did he sell US and buy EGB?

Wed, 08/29/2012 - 10:46 | 2746504 Cognitive Dissonance
Cognitive Dissonance's picture

The fiat junkies are getting restless.

Looks like someone just sat on Gold and Silver as well. All in prep for Ass hole hat at Jackson Hole.

Wed, 08/29/2012 - 10:52 | 2746513 ThisIsBob
ThisIsBob's picture

Of course volumes are low.  In the US any trades of consequence are taking place in pools, because the real money doesn't want to do business on the exchanges, who have chosen to sleep with the pantywaist front running HFT trechno-parasites.

In search of volume the exchanges have been hoist on their own petards.  Fuckem.

"Fairness" to the exchanges means giving everybody the same length cable, no matter where the incoming plug.  And that is all.

Wed, 08/29/2012 - 10:49 | 2746517 A82EBA
A82EBA's picture

What is EGB?


Wed, 08/29/2012 - 10:52 | 2746535 credittrader
credittrader's picture

EGB = European Government Bond

Wed, 08/29/2012 - 10:57 | 2746548 A82EBA
A82EBA's picture

can FRB sell US 10 yrs and buy EGBs?

Wed, 08/29/2012 - 11:18 | 2746633 LawsofPhysics
LawsofPhysics's picture

dollar swaps - bitchez.  U.S. taxpayer on the hook for the entire western world - "winning".

Wed, 08/29/2012 - 11:24 | 2746656 A82EBA
A82EBA's picture

maybe US is buying some of that Spain 10yr at 6.43%

Wed, 08/29/2012 - 10:49 | 2746519 slaughterer
slaughterer's picture

Every time BB opens his mouth lately, silver/gold gets raided.  

Wed, 08/29/2012 - 10:55 | 2746543 Beam Me Up Scotty
Beam Me Up Scotty's picture

BTFD on physical.

Wed, 08/29/2012 - 11:02 | 2746566 GetZeeGold
GetZeeGold's picture



Greetings from Jackson Hole.....nothing to see here!


Wed, 08/29/2012 - 10:49 | 2746520 dingoj
dingoj's picture

Indecision => fear => panic => volatility++

Wed, 08/29/2012 - 10:50 | 2746522 magpie
magpie's picture

They have a duty to ramp into the European close

Wed, 08/29/2012 - 10:53 | 2746538 Squid Vicious
Squid Vicious's picture

perfect day for a flash crash, machines running the show while banksters are in the Hampsteins...

Wed, 08/29/2012 - 12:10 | 2746820 FRBNYrCROOKS
FRBNYrCROOKS's picture

I thought they were all conspiring at Jackson Hole?

Where is a Tourrest when you need one?

Wed, 08/29/2012 - 10:56 | 2746544 sardonical1
sardonical1's picture

I think Zerohedge readers tend to overanalyze the markets.  Why not just follow the trend?  The trend, at the moment, is up.  Why complicate things with a focus on fundamentals when obviously no one makes money by being a 'genius' with their complicated analysis?  

Wed, 08/29/2012 - 11:05 | 2746574 adr
adr's picture

Because following a trend makes you a fool. You were later to get in and you will be later to get out. Wall Street parasites can only live on the back of the host fool.

Honey Apple is up another 3% today. By the end of the year our shares will be worth at least 40% more than what I paid. Let's go buy a really nice car.

Fast forward to a few months later:

Honey we have to sell the house, find all the jewelry you can. I don't know what happened, I woke up today and Apple's share price fell $250. I don't have the cash to pay our bills and our savings is gone now. Man I should have listened, I SHOULD HAVE LISTENED!!!!

Wed, 08/29/2012 - 11:08 | 2746589 sardonical1
sardonical1's picture

Bad analysis.  There are rules on when to sell a stock.  Read Bill O'Neil's book, "How to Make Money in Stock."  One can time the market by determining market distribution, and selling stock as distribution starts to hit the market.  Your analysis--the market *should* go down because I believe it is, and being upset when it doesn't, is like a faith-based investment (or non-investment) strategy.  I do not care which way the market moves--up or down.  I just follow the trend.  I don't care to make things more complicated than it should.  

Wed, 08/29/2012 - 11:15 | 2746617 Itch
Itch's picture

Could i have permission from the author of this comment to post it on ?

Wed, 08/29/2012 - 11:20 | 2746639 ParkAveFlasher
ParkAveFlasher's picture

Ok genius, make a call then.  I'm waiting.

Wed, 08/29/2012 - 11:21 | 2746643 adr
adr's picture

Did you follow the trend and buy Netflix at $250?

Wed, 08/29/2012 - 11:26 | 2746661 sardonical1
sardonical1's picture

No, but some did.  I am newer to this.  I'm presently long Visa, Google, DHI, and NSM, and TQQQ.

Wed, 08/29/2012 - 11:32 | 2746685 Conman
Conman's picture

Psss.. heres  a secret. This isnt a stock advice site.

Wed, 08/29/2012 - 11:06 | 2746582 GetZeeGold
GetZeeGold's picture



I can tune into CNBC to hear that crack advise.


Wed, 08/29/2012 - 11:17 | 2746625 ParkAveFlasher
ParkAveFlasher's picture

"crack advise" lmao, I just choked on a peppermint.

MSM MOPE, if boiled down, is a 24-7 hi-def close up of bartilomomo's painted lips mouthing words like "profit" and "cash flow" and "high revenue" and "close in the green" in super slo-motion. 

It is an outlet for sexual repression, you insert your coin into her lips because for many many practical and ethical reasons you can not insert your pecker. 

Wed, 08/29/2012 - 11:10 | 2746595 resurger
resurger's picture


Wed, 08/29/2012 - 11:10 | 2746596 Rainman
Rainman's picture

correct......simply overanalyze the time and aggravation.

Wed, 08/29/2012 - 11:40 | 2746719 Bold Eagle
Bold Eagle's picture

When I read a comment like this I regret that ZH is no longer using math captcha questions.

Wed, 08/29/2012 - 10:59 | 2746560 Dr. Engali
Dr. Engali's picture

Everybody is getting itchy trigger fingers eyeing eveybody else to see who is going to make the first move.

Wed, 08/29/2012 - 11:01 | 2746565 fonzannoon
fonzannoon's picture

If this bond train backs up the tracks and runs me over again I am really going to be pissed.

Wed, 08/29/2012 - 11:06 | 2746578 Dr. Engali
Dr. Engali's picture

LOL I hope for your sake it doesn't.  You're not short ahead of the Bernank are you? I did't junk you by the way. It looks like we have a junking trollbot.

Wed, 08/29/2012 - 11:08 | 2746592 fonzannoon
fonzannoon's picture

Short? Hell no...I believe like you do, the ten year goes sub 1% before this thing detonates. If ZH is right and we get nothing from the fed and rates back up like they are today then I bow down before their alter because I never, ever thought that would happen. We get nothing on Friday and people run back into the burning house (treasuries). Thats been my guess.


Wed, 08/29/2012 - 11:10 | 2746600 Dr. Engali
Dr. Engali's picture

Yeah I agree. I asked my question based on a comment you made yesterday about shorting the ten year.

Wed, 08/29/2012 - 11:19 | 2746610 fonzannoon
fonzannoon's picture

Unless I was lost yesterday I thought ZH put a trade idea out there to short the 10yr as the reaction to no QE. I was saying that sounded nuts but then I went and looked at my losses that I have been carrying forward for 3 years and decided that anything I thought was nuts was probably a helluva idea.

The good news is I didn't build those losses.

Wed, 08/29/2012 - 11:09 | 2746593 A82EBA
A82EBA's picture

the visual of that animation is hilarious..good one

Wed, 08/29/2012 - 11:12 | 2746603 Conman
Conman's picture

Fuck do i need to take my dow 13k hat off again?

Wed, 08/29/2012 - 11:12 | 2746607 slaughterer
slaughterer's picture


Wed, 08/29/2012 - 11:15 | 2746618 Lewshine
Lewshine's picture

Mad world? We have Iran cutting off US and selling to Russia & China, We have production in the gulf shut down completely for next two weeks - Yet, we have an over-supply? Lets nuke every source of precious crude so to get the cost down to 20.00 a barrel!

Besides CNBC, who buys this insanity?

Wed, 08/29/2012 - 11:16 | 2746623 adr
adr's picture

The market hasn't made any sense for weeks. Reports contradict each other every hour, one report is good and one is bad based on the same data.

I like looking at the headlines for news stories that pop up next to price quotes.

8/17 Crude rally falters as traders weigh supply

8/18 Nymex Crude Gains IEA says no need for SPR release

8/20 Nymex Crude Eases

8/22 Nymex Crude Rises - Fed Minutes Stroke Optimism

8/23 Nymex Crude Falls as Stimulus Hopes Fade

8/27 Crude Up Then Down as Issac Shuts Refineries

I'm sure real demand tracked that daily insanity.

Lately the charts for nat gas and oil have gone absolutely insane once the US market opens. The amplitude of the sudden changes has been off the chart. 1% swings up and down multiple times within minutes of each other.

When will people get together and pull the plug on the terminally ill computer traded market?

Wed, 08/29/2012 - 11:20 | 2746636 slaughterer
slaughterer's picture

You are correct, the crude marke is trully a microcosm of market insanity lately.     That, and all the HF hotels (AAPL, GOOG, AMZN, JPM, et. al.)

Wed, 08/29/2012 - 11:30 | 2746678 adr
adr's picture

The biggest question for Apple is how are they going to grow into the valuation they achieved this year? P/E ratios are one thing, but the reality of the consumer market is something entirely different.

$400 to $675 realistically means a massive increase in overall marketshare that isn't going to happen. iPhone sales in China are terrible and carriers are dumping support for Apple. The Chinese don't have the same cult admiration for the House of Jobs. They won't buy an inferior product just because it has an Apple logo on it. If you look at Japan, the iPhone 4 is at least three generations behind new handsets available from Docomo.

So far the iPhone 5 looks to be able to match the competition at best. For a stock price that frontruns at least a 20% increase in marketshare, matching the competition isn't going to be good enough.

Wed, 08/29/2012 - 11:58 | 2746778 FRBNYrCROOKS
FRBNYrCROOKS's picture

To boil your comment down to a question:

When do we start shorting Apple?


Wed, 08/29/2012 - 12:04 | 2746794 TWSceptic
TWSceptic's picture

Stop the lies Apple basher. Apple's strength is precisely in its products and services. They are more innovating and have generally better specs than the competition. Only ignorant PC/Android users think otherwise. So no that is not the problem. The real problem is the consumer confidence and how that will affect sales.

Wed, 08/29/2012 - 12:31 | 2746888 slaughterer
slaughterer's picture

671-683 is the delicate zone for shorting  AAPL.  We have been doing it for the last two weeks.  

Wed, 08/29/2012 - 12:40 | 2746919 FRBNYrCROOKS
FRBNYrCROOKS's picture

I would say "it is just a matter of time!' but, I thought the same about google and that waould have been ludicrous. 

Somebody junked me?

I could give you plenty of reasons to believe Apples sales will not continue to increase at past rates.

# reason would be the doubling of salaries at FoxConn last year. That has to effect the bottom line unless they cut intio quality. 


Wed, 08/29/2012 - 11:25 | 2746658 ebworthen
ebworthen's picture

"Shake-and-Bake" market.

Central Bank intervention = no market

Machines and dark pools jiggering non-reality into reality and back again.

Wed, 08/29/2012 - 11:33 | 2746688 FiatFapper
FiatFapper's picture

Micro analysis on macro technicalities; there's weekly spinning tops on sp500 and brent crude and gold rolled over from its week open.

Wed, 08/29/2012 - 11:33 | 2746692 tocointhephrase
tocointhephrase's picture

Time to roll over, just another 5 mins, ZZZZzzzzzzzz

Wed, 08/29/2012 - 11:44 | 2746729 web bot
web bot's picture

If you don't think that the Western world is entering a fascist state, then you are not on planet earth:

Wed, 08/29/2012 - 12:46 | 2746936 MisterMousePotato
MisterMousePotato's picture

Someone posted this here yesterday. It is pretty long, but it's worth every minute watching it. I even got my wife to watch it over her objections (after the first few seconds, it proved captivating and got her thinking). The video concerns the facist state we now live in:

Do NOT follow this link or you will be banned from the site!