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BIDzilla!

Posted By Global Macro Monitor On January 23, 2013 @ 1:30 am In Think Tank | Comments Disabled

This is what happens when traders try and game a correction of overbought conditions and there are no real sellers.   BIDzilla as in Godzilla [1]!

Here’s what we said [2] after the first trading day of the new year:

The two big macro swans – the Eurozone crisis and fear of China’s hard landing — which caused much of the volatility last year have flown the coup, at least, for now…

We hear lots of chatter…about the liquidity trade.  That is,  the global central bank printing presses levitating asset markets.   Imagine the MoMo if, and,  when credit starts to expand.  Remember the “liquidity, liquidity everywhere” theme that drove the 2005-07 bull market?

This trade can last “longer than you think it can and will reverse faster than you thought it could.”  We think the trade, though dangerous in the long run,  still has some legs and the inflating equity bubble could surprise many.   We could be wrong but that’s our thesis going into the New Year.

The first test will be to how the market reacts to what could be disappointing earnings…

Looks like the market is passing the first test as earnings seem to be coming in better than expected.  See Google [3] (up $34) and IBM [4] ($8.52)  after the bell.

The second test was the debt ceiling, which the Repubs appear to be caving.

The Russell [5] and Trannies [6] are at new highs.

Stocks will remain bid until they are not and then offered until they’re bid.     Having sad that, we’re getting long Harbaugh [7] into the Super Bowl.

Predicting or trying to trade short term moves is a mug’s game.   Follow your heart the trend.

Jan22_SP500 [8]

(click here [9] if chart is not observable)


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2013/01/bidzilla/

URLs in this post:

[1] Godzilla: http://www.youtube.com/watch?v=g9_eshPJG3I

[2] what we said: http://macromon.wordpress.com/2013/01/02/nice-start-to-the-moon-alice/

[3] Google: http://blogs.wsj.com/digits/2013/01/22/five-takeaways-from-googles-4q-earnings/?mod=yahoo_hs

[4] IBM: http://online.wsj.com/article/SB10001424127887323940004578258152618738968.html?ru=yahoo&mod=yahoo_hs

[5] Russell: http://www.barchart.com/chart.php?sym=%24IUX&style=technical&template=&p=DO&d=X&sd=01%2F22%2F2007&ed=01%2F22%2F2013&size=M&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=SMA%2820%2C%29%3BSMA%2850%2C%29%3BSMA%28100%2C%29%3BSMA%28200%2C%29&chartindicator_5_code=SMA&chartindicator_5_param_0=20&chartindicator_5_param_1=&chartindicator_6_code=SMA&chartindicator_6_param_0=50&chartindicator_6_param_1=&chartindicator_7_code=SMA&chartindicator_7_param_0=100&chartindicator_7_param_1=&chartindicator_8_code=SMA&chartindicator_8_param_0=200&chartindicator_8_param_1=&addindicator=&submitted=1&fpage=&txtDate=#jump

[6] Trannies: http://www.barchart.com/chart.php?sym=$DOWT&style=technical&template=&p=DO&d=X&sd=01%2F22%2F2007&ed=01%2F22%2F2013&size=M&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=SMA%2820%2C%29%3BSMA%2850%2C%29%3BSMA%28100%2C%29%3BSMA%28200%2C%29&chartindicator_5_code=SMA&chartindicator_5_param_0=20&chartindicator_5_param_1=&chartindicator_6_code=SMA&chartindicator_6_param_0=50&chartindicator_6_param_1=&chartindicator_7_code=SMA&chartindicator_7_param_0=100&chartindicator_7_param_1=&chartindicator_8_code=SMA&chartindicator_8_param_0=200&chartindicator_8_param_1=&addindicator=&submitted=1&fpage=&txtDate=#jump

[7] Harbaugh: http://www.latimes.com/sports/sportsnow/la-sp-sn-harbaugh-brothers-super-bowl-20130122,0,6345487.story

[8] Image: http://macromon.wordpress.com/2013/01/22/bidzilla/jan22_sp500/

[9] here: https://macromon.wordpress.com/2013/01/22/bidzilla/

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