It appears that whenever downsides to The Fed's "wealth creation" mandate begin to appear, something strange happens in the stock market...
The frequency of v-shaped recoveris intraday in recent weeks has risen significantly. In an effort to quantify this, we measure the average rise from intraday lows to the cash close on the S&P 500...
h/t MacroMan
Dear Citigroup employees, we suggest you stop reading this post right now or else you may find that the enclose dose of reality, pardon, permabearishness is precisely what you all want.
For everyone else, here is the latest rant by Richard Breslow explaining not only why traders are frustrated in a market in which nothing makes sense, but but where after holding their hands for years, central bankers have finally forsaken the 20 year old hedge fund managers:
After a burst of volatility in the developed market over the past month, one odd outlier was China, where after a surge of gut-wrenching moves in both its currency and equity markets (recall that it was China's troubles with marketwide circuit breakers at the start of January that may have catalyzed the global volatility wave), Chinese stocks remained relatively quiet and resilient, levitating quietly day after day. That all changed overnight when the Shanghai Composite plunged by 6.4% with the drop accelerating into the close.
What's more bullish than a cancelled POMO?
Simple a reinstated POMO...
With the S&P 500 back at unchanged - we wonder what happens next?
After yesterday's strong 2Year auction, there was some confusion how today's issue of $34 billion in 5 Year paper would transpire, especially after the previously reported "technical difficulties" which prevented the NY Fed from conducting today's MBS POMO - something that has not happened in years. Well, the results are in and the auction was an absolute blockbuster.