Just Saying…

Hey, did I miss anything?

Just kidding - I have been following the tape on my iPhone mostly with sinister bemusement. Nice gap fill anyone? I’m sure a good number of trigger happy bulltards just got their dicks caught in that one. Yes, when it comes the banking coin those intrepid market makers are equal opportunity slammers - they’ll screw us bears as much as they screw the bulls.

Chart above is a very simple tidbit I wanted to point out today - as the title says: Just saying… but hey, maybe this time it’ll be different

Since I’m a damn yank now (since January 29th, 2009) I would like to wish everyone a Happy Veterans Day! While we are all sitting in the comfort of our home or office trading an admittedly rigged market the perceived pain and suffering we have to endure is minuscule compared with what those brave souls in that picture had to go through to capture that damn hill.

Right now as I’m typing this many of our soldiers (I hate to call them ‘troops’ as they are human beings) are on the battle front risking their life and limb for your country. And they don’t ask for anything in return. They all deserve our utmost gratitude and adoration for their continued courage and dedication, especially in the face of the failed leadership they had to endure in the past few years. Now, get your ass over to dav.org and donate some of your ill gotten gains to a disabled veteran. Since our country is letting them down they need YOUR help!

And our heartfelt gratitude and a huge Thank You to all active duty and reserve military, both past and present.

Berk here…

What happens when the high betas lag the low betas?

High Beta laggards...

1:07pm EDT: Mole here again. Funny Berk just put this chart up - although we have not spoken today - we seem to think alike:

Now, I’m not saying we are not pushing back towards the top today - but look at the subtle signs which are accruing. We all know by now that the Dollar carry trade has been fueling this rally - as evidenced by a left chart of the ES/6E left chart on any chart interval you care looking at. But when I see the Euro weaking while index futures are catching a bid, then I I take notice.

Maybe it’s nothing - but we were outside the 2.0 BB - and I do see interesting divergences all over the place. And I know it almost sounds comedic after another bear trap (which I identified early in the game btw) but this thing is coming apart at its seams. A few divergences here and there are fine but when you have the trannies, the utilities, the XLE, the REITS, the XRT, etc. all lag behind then you know this thing is running on vapor.

I’m thinking long term - I know I seem like a complete idiot right now doing this, but hey - I own my trade.

2:15pm EDT: Since we’re on the topic of the carry trade - Karl ‘No Slave To Fashion’ Denninger posted a very interesting piece which is a brilliant observation in its simplicity:

10 handles came off the S&P 500 in less than 30 minutes (a 1% move) when the dollar strengthened by about two tenths of 1%.

What would be the impact of the dollar moving higher by 10%?

This is the problem with the carry trade.  The leverage that gets deployed, once it gets going, is typically in the range of 5:1, 10:1 or even more compared to the equity markets.  (Absolute leverage in the FX markets is frequently 100:1 - in fact, even retail traders can run 100:1 leverage at most FX brokers!)

Of course none of that seems to matter right now as dip buyers keep swarming in to soak up any low bids - remember folks - a dropping equities market is unamerican!

This entry was posted on Wednesday, November 11th, 2009 at 12:53 pm and is filed under Intraday Update, Trading Psychology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.