S&P 500

While there was no unexpected overnight central bank announcement unlike yesterday's surprise by the RBA which unleashed volatility havoc in the FX market, which promptly spilled over into all asset classes, overnight stocks around the world saw another leg lower without a tangible catalyst, while EM currencies fell to a one-month low after two Fed presidents raised concern investors had become too complacent in their belief that U.S. interest rate raises will stay on hold.

Over the past few weeks, one recurring theme has been that experienced traders and analysts have simply given up trying to figure out the market, and no longer have an idea how to trade what for the past 7 years has been a centrally-planned policy vehicle. As a result they are getting exasperated, confused, desperate and simply angry. First it was Richard Breslow; then it was Albert Edwards who was clearly disgusted when he uttered the following appeal:

When yesterday Bank of America presented "Another Sign That Wall Street Doesn’t Believe The Rally" noting that its "Sell Side Indicator, a measure of Wall Street’s bullishness on stocks, fell by 1ppt to 51.9, its lowest level in over a year" it tried to spin this "pervasive bearishness as a 'reliable contrarian indicator'." Alas, for now it is merely an indicator of precisely what it is: that the smart money still refuses to believe the rally, and following a record 13 weeks of smart money selling, overnight BofA reported what is now becoming painfully farcical:

Three months ago, when Australia unexpectedly revealed that its recent "stellar" job numbers had in fact been cooked we asked, rhetorically, why the sudden admission it was all a lie? Simple: weakness in commodity prices "is far greater than people had been expecting,” the nation's top economist said. Australia is now "swimming against the tide" because of uncertainties in the global economy, he added.

Submitted by Pater Tenebrarum via Acting-Man.com,

Damned If You Do…

After waking up on Thursday, we quickly glanced at the overnight market action in Asia and noticed that the Nikkei had tanked rather noticeably. Our first thought upon seeing this was “must be the yen” – and so it was:

June yen futures, daily – taking off again – click to enlarge.