Submitted by Tyler Durden on 01/03/2012 08:35 -0500
Via Pete Tchir of TF Market Advisors,
Stock futures are up sharply after another week of unprecedented volatility. Although last week was relatively tame, only 13 times in the last 60 years has the S&P 500 had a down 1% day during the week between Christmas and New Year's. We managed one of those days last week. We also had a 1% positive day. Futures are strong and looks like stocks will open above 1272 (where they closed on Jan. 3, 2011).
Not only does volatility remain elevated, the stories are about the same. We have some new acronyms to contend with, but ultimately the European Debt Crisis (it is both a bank and sovereign crisis) and the strength of the US economy and China's ability to manage its slowdown are the primary stories. Issues in the Mid-East remain on the fringe but threaten to elevate to something more serious with Iran flexing its muscles more and more.
So what to do? Prepare for more headlines, more risk reversals, and more pain.
There are a few "consensus" trades that particularly scare me. It is almost impossible to find anyone positive on European stocks or US Financials. Finding someone positive on European Financials is impossible. Back on December 15th we started to believe that going long Europe vs short the US made sense. Too much "decoupling" had already been priced in. I think that trade continues to make sense.
My belief that the LTRO does reduce funding and liquidity pressure on banks could provide some support for those stocks. I
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Everybodys All ...
Everybodys All American's picture
I would love for someone to present a study of how much of the US markets daily move is in the pre-market as opposed to the normal trading day or after-market. I suspect much of the total daily upward move is in the pre-market.
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Tue, 01/03/2012 - 09:29 | 2028490 HarryM
HarryM's picture
It's 90% premarket
As usual , the premarket fugures late last night showed the DOW down slightly - Now up 192
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youngman
youngman's picture
I also think as the average Joe investor leaves the markets.....that all that will be left is the HFT´s....and they will take it up 200 pts a day and down 200 points a day...that is how they will make their money...churn ...churn...churn....
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Tue, 01/03/2012 - 09:14 | 2028441 TheHillrat
TheHillrat's picture
This is very true. Soon retail will just buy bonds as they realize they are gettting $ucked everyday.
Tsar Pointless
Tsar Pointless's picture
Isn't this the way Wall Street always wanted Wall Street to run?
Highly volatile, with inisders controlling the price (running the books, you know, like a criminal organized syndicate is run), scaring money from emotional human investors out of the market, to clear way for their printed millions and HFT bot accomplices.
The perfect union of man and machine.
And, since these people always own those who write the financial and campaign laws for this "country" we call the USofA, they control the taxing and spending authority of same.
How's that for government "of the people" and all that jazz?
Casinos work better when the house rules.
Enjoy the Iowa caucuses, bitchez!
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Cdad
Cdad's picture
...and the "horse fixers" are in on BAC this morning. Completely absurd prints there. Picture perfect HFT action.
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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