Stick mastery ALWAYS draws an audience...
SPXSpinning top day (first two days could be start of a morning star pattern). Back below the 1.764 fibo (using low) of 1176.22 (meaning the 1.707 at 1138.21 is next). Midpoint below 10 SMA (downtrend). Tested the 55 SMA and passed. Now below the weekly 3LB reversal of 1166.59. Closed below the trendline. New low on daily 3LB with reversal still 1210.65. Now trending down on the daily 3LB. QE2infinity.
DXYBullish short day (possible hammer - too much upper shadow). Midpoint well above 10 SMA (uptrend). Go Bucky Go Bucky. New high on daily 3LB with reversal now 82.15.
VIXBearish high wave day. The 61.8% fibo ext (support) rules. Fear is in the air. Tested the 14.6% fibo retrace and passed. Closed above all SMA's. New high on daily 3LB with reversal now 18.36.
EURUSDBearish LONG day. Midpoint well below the 10 SMA. Currently below all MA's (again 2x). Next fibo level of 1.2935 has been decimated. Up next is 1.1571 (the .236 fibo level). Well below trendline (11/27/09-3/17/10). New low on daily 3LB with reversal now 1.3209.
JNKTakuri line (or hammer with a long lower shadow). Buyers rejected the lower prices. Midpoint below 10 SMA (downtrend). Tested 144 SMA and failed. Previous high of 40.21 was held with ease. New low on daily 3LB reversal with reversal still 40.20.
30YR YIELDBullish short day. Still below the 144 SMA. Next weeks auction is in the bag (snark). New low on daily 3LB with reversal now 45.61.
GSDoji day. Midpoint still below the 10 SMA. Held the previous low of 147.81 and above 2.058 fibo (using low) of 144.98. CPR is being administered. No daily 3LB changes.
The PIGSPortugal, Italy, Greece and Spain all are trading under all SMA's on the daily charts. Kaboom!
The Bond Report 5.5.10 - (courtesy of LB)
THE WORLD
It's NOT Enough
Phew! Another FTQ day. I wonder what a sovereign default would look like. There is a whiff of Systemic Risk in the air in Europe. Even US IG was sold today, and investors grabbed the 2y Ts, which we hate. The low yield of the day was 2.24% on 5y, 3.49% on 10y and 4.32% on 30y. So if we get a range trade for a while, those levels are now firm resistance.
Corpies: LQD -0.43%; AGG -0.08%; JNK -1.57%; HYG –1.37%;
Govies: TLT 0.59%; IEI 0.33%; TIP 0.05%
A modest hedge was blown out early this morning. We sold some 5y Ts and hedged the long end again into the close, anticipating a World Not Ending trade tomorrow. It is likely that bargain hunters will be out in the credit markets at least. Although we don't really see Greece and Portugal as bargains..
72 comments:
Thanks, AR!
Rosenberg is calling for more QE and gold to $3k.. DL will get his $150 crude in that case..
http://www.bloomberg.com/apps/news?pid=20601087&sid=adSzBb_3bHkU&pos=6
from http://www.tradersnarrative.com/ (obviously he is unaware that 1101 is my top, or KT!)
If the S&P 500 continues to fall and has a 10% correction, which would be par for the course, then we can expect it to fall to the 1100 handle. If this correction is only as deep as the previous correction in February, then we could see it fall to 1125.
Thx Ra!
Appreciate the wrap.
"CPR is being administered." lol!
The JNK takuri was the root of my SPX "no takuri" remark in the other thread, fyi...
One of those prints is not like the other one...
Freddie wants 10.6..
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIxv5mE0Xcbo&pos=5
Karen @ 5:10
Only a matter of time.
Yes, AmenRa,
Thanks for the "Ra-rap".
from Karen's link-
"Freddie Mac, the mortgage-finance company in government conservatorship, said it will need $10.6 billion more from the U.S. Treasury after posting its third- straight quarterly loss."
it's only paper- plenty more where that comes from
What's the incentive to right the ship when you know you have unlimited backing?
"The Congressional Budget Office in January estimated that direct U.S. aid to the government-sponsored entities could total $389 billion by 2019. Washington-based Fannie Mae said in February it would seek $15.3 billion in additional aid after a 10th-straight quarterly loss, bringing its total Treasury borrowings to $76.2 billion."
Makes AIG look like a pimple on a flea's ass.
I-Man @ 5:48
But Ritholtz keeps insisting that Fannie and Freddie were never part of the problem.
A "minor cog" as he has put it.
Hello Karen, Sorry I needed a cat-nap today.
I have a crude target at 77.60 for crude and the daily trend-line support. Then if that breaks my next target is 76.50 then finally 73.60.
I don't see a reversal here, likewise the S&P I think we go to 1153, the daily trendline and test the January swing high which is also a 61.8fib
Having said all of that my actual target S&P for this swing is 1112 but who knows
It is the ECB - European Central Bank meeting tomorrow and there is much speculation they may announce some QE to ease the problems. In theory abolishing the credit rules so they will accept any Greek paper was a form of QE.
and regarding Rosenberg's prediction of $3000 gold-
the USG will confiscate gold if necessary-
I mentioned something similar the other day at ZH- dude was commenting that the USG would not allow high inflation due to indexing of Social Security-
and as I opined- who said that's carved in stone? The USG will outlaw, change, remove or enact laws as deemed necessary for its survival
Nic
I heard about that. They would accept paper that has already defaulted. Now that's desperation!
ahab
That's why they started changing the CPI in the first place.
I-Man
I had to go and dig up the definition. Gracias. LOL.
nic-
QE is the neatest shit since sliced bread- and to think it's only paper-
and now that we have pulled that lever on a global scale- it will continue to be pulled over and over and over-
sheer genius- all we have to do is believe
Ra-
no doubt- they would toss aside indexing w/ nary a second thought due to an "economic emergency"-
they have already proven they will take private property- a more heinous move
Yeah Ahab
You export all the good stuff, but caveat emptor!
And tomorrow is the UK elections ... The one no one wants to win because this is such a mess they will not have power again for a generation ;)
Nic
So the winner will be giving an early concession speech?
I am need of some cold beers to cry away my $200 speeding ticket I got about an hour ago-
cop was a super nice dude- but still tacked on another $25 for not wearing a seat belt-
I mean c'mon- you are already hitting me up for $200- but he said he was doing me a favor since I was really 25 over which is reckless driving-
trust me- I wasn't reckless(-:!!!
back in a bit
watching people get destroyed by DEflation will be sad indeed. In the meantime, this is believed to be fact, when really, it denies fact:
http://www.amazon.com/Great-Reflation-Investors-Profit-World/dp/0470538775
Nic on ECB QE.. thot the same thing myself when i read it this morning.. they stole that trick from the US Fed tho..
As for oil.. if 75 goes this week or next.. i'll expect a total of 4 weeks down and a test of 65 area..
As usual, unwind is the name of the game so i'll believe it when i see it.. definitely think we see lower 1150s tomorrow before the dip gets bot..
speaking of cats and naps!
ahab, you have my complete sympathy on your ticket..
laughing, i suspected that the minute i made my new post, the lost one would appear..
If Trichet announces some QE tomorrow look out below on EUR. He has been so tough on it up until now the market will not like it.
ECB announcement is 7:45 New York time.
How do you make investors confident that you will repay a bailout by shutting down the country that is getting the funds?
Somewhere there is a contradiction in there...
I love those cats!!!!!! Thx
The chick who wrote this is a smart cookie:
Blankfein Should Explain Why Clients Buy ‘Crap’: Caroline Baum -
http://www.bloomberg.com/apps/news?pid=20601039&sid=ahNqX5F.OMdg
Nic- sleeping in the middle of the day? Now that's the life! You're a Brit right? A story-
I did a loan for a British gal- somewhat attractive- who worked for some Middle Eastern country's embassy- can't remember her job- or even what country- but her pay was by personal checks and embassy checks- i.e.- no pay checks- typical though for an embassy- anyway-
in my office- she grabbed my arms- as I was sitting at my desk- she on the other side- and said I was the most INCREDIBLE American dude she ever met- lol- even sent me a "very" personal thank you note after she closed- and I mean personal-
now that's customer service(-:!!!!
Greek riots escalate:
http://www.zerohedge.com/article/greek-riots-escalate-branch-finance-ministry-set-fire
karen-
cats- really- think about it- what are they good for? My daughter has a cat- full time outdoors- which I feed from time time- but I tell her it will make a good pair of slippers one day-
been saying that five years or more
Ahab I know two british girls in DC who would fit that ... hehe, I won't post names here.
In my defense I get up for the London open at 2AM every day. But US afternoons are often quiet in FX.
Nic-
this was about 5 years ago-
it would be interesting if it was the same person we know
I swear I don't even know BR sometimes....
He had the following line in relation to how minimal the Greek bailout costs were the US:
“Considering the US role in the global collapse, that is a relative bargain.”
To which had to respond....
I’m assuming you included that last line to incite some commentary? So, I’ll oblige with the “comment bait” material:
WHAT THE FUCK ARE YOU TALKING ABOUT BARRY?
Did we make Greece take on all that DEBT? Did we trick them into it? Did we make Greece the highest cost labor force in Europe? Did we encourage the incredibly lax tax enforcement of the Greeks?
Silly stuff BR….
manny-
the Europeans- they know how to "bring on the rage"-
the people there need to be coddled to stop there factious ways
Or they just need a heavy dosage of the American Idol and other "opiates".
Probably the scariest thing for Dollar longs is Bob Pisani's comments today:
"Folks, people are calling and writing: 'Can I short the Euro.' Well, yes you can...."
He then rattled off some kind of "ultra" double short Euro fund and the UUP. That kind of stuff from Pisani is usually the kiss of death for a move...we'll see.
There is NO good news Europe doing the rounds tonight:
3 killed as Athens bank firebombed
http://www.abc.net.au/news/stories/2010/05/05/2891441.htm
Moody’s places Portugal on review for downgrade; downgrade likely
http://online.wsj.com/article/BT-CO-20100505-713322.html?mod=WSJ_latestheadlines
IMF welcomes ECB suspending Greek debt rules
http://www.reuters.com/article/idUSTRT00239320100505
Moody’s warns may downgrade Portuguese banks, local governments
Pimco’s Gross: Greece to restructure debt over next 12-18 months; Portugal and Spain might too–CNBC
Greek Finance Minister: Won’t back down from austerity
http://www.reuters.com/article/idUSATH00546020100505?type=marketsNews
French PM: Euro under speculative attack; attack will fail
http://www.reuters.com/article/idUSLDE6442LY20100505
Finnish PM: Risk Greek package will not work, contagion will spread
http://www.reuters.com/article/idUSLDE6442N420100505?type=marketsNews
IMF head warns of risk of contagion:
http://uk.news.yahoo.com/5/20100505/tbs-imf-head-admits-risk-of-greek-crisis-327c223.html
Tomorrows papers in Europe:
Merkel plea to save Europe as contagion hits Iberia: http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7683271/Merkel-plea-to-save-Europe-as-contagion-hits-Iberia.html
but manny-
they watch TV over there- I know- I saw them- lol-
what is cool is they- at least the countries I had had the pleasure to stomp around in- invest in the cooler things-
like cheap beer, good bread and transportation- but keep in mind that Europe- excluding Scandinavia- is super dense- akin to the NY to DC corrider
@ahab: Which (high density) means they're only crankier when the shite hits the fan, no?
I once had a Greek suite-mate in college. Played hoops (was 6-6) but had bad knees, so he smoked quite a bit in his dark bedroom listening to some dark tunes. Nice guy and a good guy with which to have thoughtful conversations, but he often told me how passive we Americans were in comparison to the Greeks. I think he's right though. We have been totally sedated by bad and too much tv, food, drink, and entertainment. Thoroughly sedated in a stupor.
Speaking of "entertainment", another nice win by the first place Twinkies today! Big sweep of the Tigers. Blustery day at the park though. Reminded me of back east with the clouds, and cool, windy spring day, only in the low 50's. Felt more like 40's though. I guess we're now getting our April in May. Strange.
AT @ 8:08-
no doubt- any comment that makes it like "shooting fish in a barrel"-
brings caution-
re BR- the dude is a bit of a lefty- as I have mentioned before- not good/not bad- but he sees things that way- but I have always had that opinion of him- from the first day I ever posted there- which was a while ago
S&P futures green. So may be bad news is baked in.
@anon
S&P futures were green this time last night as well if I am not mistaken.
R Cain posted this over at TBP. I thought it was far too funny not to post here. For all you Monty Python lovers - Germany vs. Greece.
http://www.youtube.com/watch?v=ur5fGSBsfq8
Greeks can control one thing -
Olive oil futures!
here's a shocker-
"The owner of the oil rig that exploded in the Gulf of Mexico said it will lose more than a half billion dollars in revenue, and its finances will be hampered by hefty fees from a growing pile of lawsuits."
no shit- LOL
karen,
you follow this right?
http://stockcharts.com/h-sc/ui?s=$gaso
IMan:
Ms. State
ben, you betcha! (gagging at the SP reference)
yeah, I filled my tank a few days ago and immediately came home to plug that in.. sometimes i do forget! but it was the tell on rising crude this go-round..despite plenty of inventory.. whatever!
Sugar sporting a constructive looking daily candle and interesting short term price action off the lows. Sort of looks like we could see sideways/higher price action next few weeks.
Andy, do you know any M&A people hiring?
ahab- Gold confiscation only affected a small (and therefore electorally insignificant) proportion of the population. On the other hand, there's a reason they call entitlement programs the "third rail" of US politics. I'm not saying it could never happen, but I think a lot of other stuff would break loose first, and it would be hard to pick a safe harbor at that point.
SC-
let's look at this way- the proclamation made to the American seniors-
sorry for those of you dependent on Social Security- but it is an economic emergency- so indexing will be put one hiatus until the emergency is over-
laid back acquiescence will be engendered
oops!
Japan's Nikkei Average ends morning trade down 3.2%, with banks, trading firms falling
Re:
http://www.reuters.com/article/idUSLDE6442LY20100505
"UPDATE 1-Speculative attack on euro will fail -French PM"
Really.
Gee, where have I heard this kind of talk before?
Oh... Papandreou... hmmm...
You dont "bully" the market, dumbass...
Oh yeah, subprime is contained too.
MW said in that interview that non-performing assets at the top 4 banks are right now 1.5X the total of ALL charge offs incurred since 2005.
recovery on.
Added a daily chart of "The PIGS" aka Portugal, Italy, Greece and Spain. None are trading above any of the SMA's.
Hugh Hendry says Greek bailout is really a bailout of the French banks:
http://www.youtube.com/watch?v=F5XIF2P5nJ8
from TBP latest post-
Cash = 100%
a couple of BR's observations on the switch to all cash-
"strictly a technical call — market internals, sentiment, duration of rally, volume were amongst the factors that came in"
"Ideally, if we get lucky, we will see a rally over the next week, with deteriorating characteristics — that sets up a better entry for shorting new positions."
"Greece/EU had nothing to do with our tactical rebalancing."
I guess buying what you hate no longer on the agenda
that's interesting ahab, if it was a "technical" call, why right now did they go to cash, all the technical red flags were there at 1200, or at the AT short. Sentiment, he just had a post less than a week ago trying to claim AAII bullishness was "waning".
oh well
DGUF.
ECB keeps key rate the same.....
oh, and apparently junk bonds can be used as collateral these days....why not right.
I wonder if I could get a loan against my baseball cards to use for shorting......
b22-
I found it quite interesting as well-
he has been hinting that "change was in the air"- and you're right- he has been a bit "all over the place"- so wasn't sure where he was headed-
now we know- all cash- lol
quite an abrupt move considering he just mentioned yesterday I believe that he was 35% cash
b22 @ 7:46-
that has been the thing during this whole financial crisis that has been driving me nuts-
losses not realized- worthless debt instruments accepted at full value-
I am like WTF??? How long are we going to play this stupid game
ahab,
very true. how long, who knows, it won't matter how long it took in the end though imo, it's all going to collapse.
Asia hammered again last night.
Ahab & Ben
The world governments do not care how long it takes to play this game. The whole goal is to stay in office come hell or high water. My estimate is that 2012 is not about the world ending but a world reset. A debt jubilee for world governments.
@Ra
I'm not too sure it is about staying in office. More like take care of the banks and be taken care of AFTER office. Hendry is 100% correct. This is not about Greece or any other country. This is about saving banks - again.
Ra-
debt Jubilee- of course-
I wonder if the bondholders would go along(-:!!!
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