Looks as if the "Dynamic Duo" struck again, Stoxx 50 surging

European stocks flying again while at the same time PIIGS bond yields completely cratered back to the lows. The "Goldilocks" scenario continues, with commodity prices tanked, 10-yr. interest rates below 2% and stocks powering up to highs again. All the technicians calling for a deeper correction stymied once again. The "Perpetual Motion Machine" continues unabated, as horrific Flash PMI in China kicked off another buying frenzy in U.S. stocks. Earnings warnings continue to roll out but the market simply laughs it off. Mo-mo stocks like NFLX with practically no earnings take off like scalded dogs based on "hope" of maybe eeking out a few cents a share profit next quarter due to "House of Cards". Now all we need is a 4:1 stock split on AAPL after the bell and a special dividend or something to get that thing moving and incite a "rip your face off rally" in the NDX.

European stocks flying again while at the same time PIIGS bond yields completely cratered back to the lows.

The "Goldilocks" scenario continues, with commodity prices tanked, 10-yr. interest rates below 2% and stocks powering up to highs again.

All the technicians calling for a deeper correction stymied once again.

The "Perpetual Motion Machine" continues unabated, as horrific Flash PMI in China kicked off another buying frenzy in U.S. stocks.

Earnings warnings continue to roll out but the market simply laughs it off.

Mo-mo stocks like NFLX with practically no earnings take off like scalded dogs based on "hope" of maybe eeking out a few cents a share profit next quarter due to "House of Cards".

Now all we need is a 4:1 stock split on AAPL after the bell and a special dividend or something to get that thing moving and incite a "rip your face off rally" in the NDX.

Retest of the highs that will fail. Nothing to see here. Very typical market action. At this point everyone is convinced that the market can never go down, due to , Bernanke, Kuroda, Draghi, Printing press, you name it delusion. Complacency is extreme as 74% of money managers are fully long.

Specifically for NFLX... its time to short. There are only 8 mil shares short now. To put this in perspective.... 12 mil shares were traded yesterday.
Though AMZN is a much better short here.

Edited by ogm, 23 April 2013 - 07:38 AM.

Here's what I'm talking about. Gasoline prices here in Ft. Lauderdale/Miami have completely crashed. That can't be bearish for the consumer or U.S. retail stocks [attachment=20681:flagas.gif]

Here's what I'm talking about.

Gasoline prices here in Ft. Lauderdale/Miami have completely crashed.

That can't be bearish for the consumer or U.S. retail stocks

2.50 will be crushed. 20 cent drop is meaningless. its $4 dollar savings on a 20 gallon tank. adds $16 dollars in savings a month if you fill up once a week. And most people won't even save that much. 2 cups of coffee at Starbucks and its all gone. Meaningless.

Lets say 200 mil drivers save $16 bucks a month each, that would translate to $3.2 bil savings a month for the whole population of the country, and keep in mind I'm being generous here.

Edited by ogm, 23 April 2013 - 08:54 AM.

Its the psychological impact that matters. The horrific decline in the CRB and CCI Indexes the last 12 months leaves the door wide open for more stimulus. And this time, they don't need to lower interest rates, rates are already at rock bottom. What will happen next is something that will get the money off the sidelines into business investment and hiring, something needs to get done in order to accelerate money velocity. And with declining commodity prices and fears of deflation, the bankers and Washington politicians will be even more emboldened than ever to "do whatever it takes". Especially after watching the resounding success of Uncle Abe in Japan, turning sentiment around on a dime with moonshot move in the Nikkei, with hardly any impact on JGB yields at all. [attachment=20682:tm0423.png]

Edited by PrintFaster, 23 April 2013 - 08:56 AM.

Its the psychological impact that matters.

The horrific decline in the CRB and CCI Indexes the last 12 months leaves the door wide open for more stimulus.

And this time, they don't need to lower interest rates, rates are already at rock bottom.

What will happen next is something that will get the money off the sidelines into business investment and hiring, something needs to get done in order to accelerate money velocity.

And with declining commodity prices and fears of deflation, the bankers and Washington politicians will be even more emboldened than ever to "do whatever it takes".

Especially after watching the resounding success of Uncle Abe in Japan, turning sentiment around on a dime with moonshot move in the Nikkei, with hardly any impact on JGB yields at all.

So as a smart businessman, would you start a business and hire employees, based on the psychological impact of extra $3.2 bil a month in the nation's consumer pockets ? What would it cost you to hire 1 employee ? What about benefits ?

Tell me when Healtchcare costs come down, then I'll be impressed.

No one is going to hire based on psychological impact. Thats why the market is going up, while economy is going down and employment is lagging. People trade stocks based on "psychological impact" of Bernanke, thats about it. No one is going to hire anyone based on that.

And for consumer.. yeah, they'll go to the mall and spend $100 based on psychological impact.. untill the next credit card bill comes in, and then its over.

Right now it looks like forced liquidation everywhere in commodity land, everyone is panicking to sell and the money is being re-deployed into housing stocks and specialty retailers like Coach. Coach is up 11% and most homebuilders are up 5% - 6% already this morning. Psychology is changing away from the gloom and doomer view towards hyperinflation, systemic collapse, etc. and now people are starting to believe in the recovery.

Right now it looks like forced liquidation everywhere in commodity land, everyone is panicking to sell and the money is being re-deployed into housing stocks and specialty retailers like Coach.

Coach is up 11% and most homebuilders are up 5% - 6% already this morning.

Psychology is changing away from the gloom and doomer view towards hyperinflation, systemic collapse, etc. and now people are starting to believe in the recovery.

Yes, its all about psychology. The market is going up because people believe in something that just isn't there. Like "Central banks are printing money and its going to help the economy". Both parts of that statement are false.

But top building is a process and its going to take time to realize that delusional expectations aren't going to live up to the reality.

NFLX has already traded 7 mil shares in the first hour. So by now everyone who has ever wanted to cover their short position has had plenty of opportunities to do so. Lets see if they have new buyers to bid up this accounting miracle to new highs. And yes, NFLX is an accounting miracle, because they don't make any actual profits. Both of the last quarters are cash flow negative. But they just fail to reflect some expenses. And of course that 3 bil off balance sheet content payments liability. At some point all of this will catch up to them.