BTFINDWD!!

So the world (including former president Obama) exclaimed at the chaos that Trump withdrawing from the Iran nuclear deal would unleash... and yet, VIX is monkey-hammered to a 13 handle and stocks surge...

BTFINDWD!!

(Buy The Fucking Iran Nuke Deal Withdrawal Dip)

"Something very important is happening here guys... we are breaking out of a range" admired Bob Pisani, adding "maybe the bulls are starting to regain control of the narrative."

However, today's momo ignition was the perfect mini-storm, running the S&P through green for the year stops, 50DMA, and testing the down-trend-line as well as the 100DMA...

Don't hold your breath Bob.

 

All major indices are green for the week...after Iran Nuclear Deal Withdrawal Dip...

 

VIX plunges to its lowest close since Feb 1st and tests the 200DMA...

 

Tesla stocks continue to buck the bond battering trend...

 

The Solar ETF surged after California mandated every new home have solar installed...

 

Bank stocks continue to rebound...

 

Meanwhile Tech continues to surge ahead of Financials... to levels only seen at the ultimate peak of the dotcom idiocy...

 

Defense stocks remained positive post-Trump BUT faded all day today...

 

Treasury yields rose 2-3bps today...

 

10Y Yields topped 3.00% again today.. and it seems this time stocks don't care...

 

5Y Breakevens are back at their highest since April 2013...

 

 

The Dollar Index ended the day practically unchanged with the dollar selling off since Europe opened overnight...repeating the same pattern of the last few days...

 

The Ringgit was routed (along with the Malaysian stock market) as the opposition (who has previously pegged the Ringgit and installed capital controls) looks to win the election...

 

Cryptocurrencies rebounded modestly during the US day session but remain lower oin the week (aside from Bitcoin Cash)...

 

Gold, Silver, and Copper trod water today as Crude spiked...

 

WTI Crude topped $71 (and Brent is trading at more than $6 premium to WTI - spiking from $5.20 yesterday)...WTI has retraced over 50% of the 2013 to 2016 slump...

Comments

D.r. Funk Wed, 05/09/2018 - 16:03 Permalink

Guess what? The Clinton Foundation is a fraaaaaaaaaauuuuuuuuuud

Guess what? The stock market is also a fraaaaaaaaaaaauuuuuuuddd

See My Finger
 

Keltner Channel Surf RedNemesis Wed, 05/09/2018 - 16:26 Permalink

Yes, by all means, ignore those with any knowledge, especially quant/tech methods that undercut ‘total doom’ theses, even if they better explain day-to-day action.  If the world doesn’t comport with my theories, then the world is hopelessly wrong.  Truths that upset my stance are useless.  “If loving my truth is wrong, I don’t wanna be right …”

In reply to by RedNemesis

Keltner Channel Surf Snaffew Wed, 05/09/2018 - 17:21 Permalink

Have you ever seen me agree with central bank perennial ‘emergency’ actions?   Sorry for being a smart-ass today, but the two key points I was alluding to:

a) Disagreeing with Fed actions, and believing, as I do, that we’d have come out of the malaise more quickly without the 2nd and 3rd QE, doesn’t mean that ‘total doom’ is the only potential result, especially if a natural cap is kept on yields as a few more decades are needed to work through the combo of crisis and Fed missteps, pensions won’t summarily dump stocks given actuarial needs.

b) None of the above stopped ALL indices the past ~5 days from moving from lower 2nd standard deviation (or 2nd average true range) Daily volatility envelope bottoms up to 2nd/2.0 envelope tops (or interim volatility stops), just as they did in mid-March.  In other words, while pundits waffle between boom and doom, the bottom up collective action of mean-reversion algos are doing the SAME GODDAMN stuff they’ve done for close to two decades, no ‘fraud’ is needed.  Quants snake back and forth within the more general longer-term path (or stasis) set by major buy-side institutions, who themselves are forced into action by bank rate-setting (and ‘forward guidance’ blather in between actions).   

Pensions invest ‘passively’, slowly morphing their stance longer term, while zero-sum for-profit algorithms take advantage of the stops of old-school fundamental and technical analysis traders on Daily/Weekly frames and below, and as long as it works, it’ll continue. 

(Abysmally low volume today should tell the story, it wasn't folks buying the Iran decision, if anything it was naive new post-Iran shorts that provided the final fuel to get where quants were already headed ...)

 

In reply to by Snaffew

Utopia Planitia Keltner Channel Surf Wed, 05/09/2018 - 17:25 Permalink

Methinks you should go back and take some grade school mathematics (and not the "communist core" type). "Quants" and "Techs" do not "know" anything.  They do statistical analysis on a real-time price plot and then make decisions based on how the price is changing.  Your assertion is akin to somebody doing statistics on bees going into and out of a beehive and then making the claim that they "know what the bees are thinking".

If you don't understand that analogy then there is no use discussing further.

In reply to by Keltner Channel Surf

Keltner Channel Surf Utopia Planitia Wed, 05/09/2018 - 17:48 Permalink

Ah ... put down your ray-gun, the 'knowledge' I was referring to was of folks like myself, traders & others who often post here re: the near two-decade mean-reversion stance of markets after the collapse of serial autocorrelation (i.e., trend) that happened around the late 90s.

Let me be clear: there's nothing 'magic' about mean reversion, the ONLY reason it's working is the vast majority of intraday volume (outside of the first and last hours where buy-siders tend to focus on) is from for-profit algorithms, all competing zero-sum, but writing code in similar fashion.  If we morph toward something else, like artificial intelligence, then we could see M-R be arbitraged away.

Technical analysis was born pre-computer, and the strong trend of the era fooled users into thinking it could be perennially applied.  A great wealth distribution from tech to quant traders has now reached its second decade but, strangely, most seem oblivious to the story.   I find Michael Harris's stuff, like this link, is a good reference for the uninitiated:  http://www.priceactionlab.com/Blog/2012/12/the-main-cause-of-failure-of…

 

In reply to by Utopia Planitia

lazarusturtle Keltner Channel Surf Wed, 05/09/2018 - 18:49 Permalink

"If we morph toward something else, like artificial intelligence, then we could see M-R be arbitraged away."... But does perfect information imply perfect prediction... We probably agree we are a long way from 'the mean' at the moment hence your argument for a 10-20 year transition but that is a long time for a lot of 'impossible to predict' shit to happen...  

In reply to by Keltner Channel Surf

Keltner Channel Surf lazarusturtle Wed, 05/09/2018 - 19:28 Permalink

You've perhaps unintentionally hit upon my point:  'prediction' based on thoughts of what the Fed or pensions will dance around isn't the issue for current actors in their dominant time frames:  5-min, 15, 30, Hourly, Daily and Weekly, which create the cries of 'fraud' here.

There is no perfect information -- but money and volume are power.  If AI arbitrages away M-R it won't be because it's 'smarter', but that the majority of high-volume actors in those lower time frames begin using it, and it feeds upon current M-R practices and stops, while it takes a generation or two for everyone to catch up, just as old school techies and fundamentalists are being schooled, and stopped out (Gartman, etc.), by M-R today. 

That 'mean' is simply, by current convention of the dominant players, defined as the 20-period exponential moving average in all time frames (with other calcs off of the 200 MA important for Daily on up), which doesn't mean that prices must stop there, but that the far-flung 'reversion' points base all their calcs upon it, and just as alternate cosmological laws could produce a very different universe, so too will innovation plus volume lead to other forms of trading, hopefully long after I retire :)

In reply to by lazarusturtle

davatankool Wed, 05/09/2018 - 16:05 Permalink

ppl who planning to buy the dip on this Iran geopolitical event, failed, b/c there wasnt any dips to buy. stocks just powering thur. no wonder VIX keep dipping. 

this morning, two important inflation data missed, but 10 yr managed to stay at 3%+, stocks following, everyone is biased toward to inflationary narrative that data means nothing at all, siding with wallst analysts. this wont end well.

 

666D Chess Wed, 05/09/2018 - 16:09 Permalink

I wonder what would happen if there was a nuclear exchange between Russia and the US? The Dow would probably go up 3000 points in an hour and gold would drop to $120 per ounce...

Chief Joesph Wed, 05/09/2018 - 16:14 Permalink

A lot of these graphs are totally meaningless.  In every single one, the trends were already occurring before Trump announced a withdrawal from the Iranian nuclear deal.  Also, there is no stochastic correlation, since the time lines are not the same.  So, what is the author trying to show?  This is total garbage.  

adr Wed, 05/09/2018 - 16:17 Permalink

We're just completely screwed in every single way. $3.00 gas is going to put the US consumer 6 feet under after being on life support.

See you later Ford. Might as well put in a buy order at $.01.

Did you hear that Ford's saving grace after they drop all cars is the EcoSport. This little crossover shitbox made in India has a one liter 123hp engine that gets 20MPG on the highway!!!!! Around town it will get 24. You can upgrade to a 2.0 engine that gets 26mpg on the highway but that model starts at $24,000. However most reviewers are saying the real highway economy is close to 22 for the AWD 2.0.

$24,000 FOR A MINI CROSSOVER BUILT IN INDIA!!!!! It actually tops out around $29,000 in Titanium trim.

Who in their right mind would buy one of those??? Oh people are going to be busting down gates at Ford lots to pick up a car smaller than a Honda fit that gets 20mpg and costs over $24k when gas is $3.00. I'm actually laughing so hard I might pass out.

CheapBastard SERReal1 Wed, 05/09/2018 - 17:40 Permalink

Banks know they will be bailed out again if needed so they don't care about the quality of the loans. My friend is selling his $460k house and wants to move "further out." The bank already approved him for a $560k mortgage, even though he lost his job and still owes $420k on the first house he hasn't sold yet.

Almost as bad as Mozillo's NINJA loans again.

As long as no one is accountable and all make profits with these loans, no one cares.

In reply to by SERReal1