FT Squeeze
And this is why we got the Squeeze. Time to introduce the FT rumor ETF.
From FT:
European Union finance ministers are examining ways of co-ordinating recapitalisations of financial institutions after they agreed that additional measures were urgently needed to shore up the region’s banks.
Although the details of the plan are still under discussion, officials said EU ministers meeting in Luxembourg had concluded that they had not done enough to convince financial markets that Europe’s banks could withstand the current debt crisis.
Full article here.
The Channel (still intact)
Presented without comment.
Apple, what’s up?
Apple is falling hard today. Many “lifestyle” investors are feeling the pain after Apple has been a real dog lately. After posting Apple vs Netflix last week, we got quite a few angry mails explaining to us Apple is about lifestyle and it is unique. That is all true, but staying at the Top, is always the hardest task, irrespective if you are the best or not. Apple is a great company, but it is a very crowded trade…
Long Term Chart continue.
Rebound 2.0 as banks regain some momentum, but don’t get too exited, yet.
Markets rebounding further, after the momo investor sold the World in Panic earlier today. Gold getting sold further, while the much hated US banks rebound. Watch out above.
Banks climbing after the initial sell off.
Chart Update
Quick Update of “Bernanke’s” Channels. Market is giving everybody the perception of great dynamics, but we are just perfectly trading within the negative trend channel, where moves get exxagerated by HFT Algos forcing the extreme moves. ES futures unchanged as we post this. Expect more volatility, as greed and fear drives this market.
SPX Channel.
Italy and Spain Becoming “The Same”
As Correlations increase, and investors start worrying about the contagion effect, assets and risk starts “following” each other. Wonder just who is more pissed off about this chart, Berlusconi, Zapatero, or Trichet (long and wrong both these crappy bonds)?
Regression to Trend
While the HFT churn stocks on light volume, we present the other extreme, the Long Term Regression to Trend since 1871. On the other hand, we are all dead in the Long Run. Courtesy DShort.
The peak in 2000 marked an unprecedented 155% overshooting of the trend — nearly double the overshoot in 1929. The index had been above trend for nearly 18 years. It dipped about 9% below trend briefly in March of 2009, but at the beginning of September 2011 it is 27% above trend. In sharp contrast, the major troughs of the past saw declines in excess of 50% below the trend. If the current S&P 500 were sitting squarely on the regression, it would be around the 918 level. If the index should decline over the next few years to a level comparable to previous major bottoms, it would fall to the mid 400s.
Trading Psychology Captured
Guest Post by Macro Story;
It’s game 7 of the world series, bottom of the ninth and you are up by 3 runs with a runner on second and third with no outs. As a second baseman or any position for that matter you know before the next pitch how you will react to different scenarios. If you wait until the ball is thrown and batter swings to determine where you will throw that ground ball to you it is too late.
Markets are no different and as as we approach what likely could be a very volatile trading week it’s important to know before the opening bell how you will react intraday. Perhaps you have such a long time horizon that you will do nothing and that is fine. But what, just what if markets present you with a major intraday swing either way of 5-7%. Will you enter limit orders to capture such move should they happen?
Plan ahead and don’t wait for the moment to ask yourself what to do. Decisions made during times of high emotions are often regretted down the road. This is a decision you must make. No one can make it for you. Be prepared!
Dexia
Yes, Dexia is collapsing today, again, but to put it into some perspective. It has been coming off for years…
Early Charts Update
Markets selling off again, after the initial bounce this morning. Below SPX and Stoxx channels to watch.
ES Futures “trapped”.
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