Driving Air

The only distraction for investors now will continue to be the increasing high pitched sound of air being forced into the only opening of the equities balloon chamber.  The noise is distracting  but can be removed by wearing an Equity Manager's Headset manufactured by the Fed and sold at any business cable news outlet.  The headsets are constructed of two ten year notes held together with Wall Street's and Washington's favorite material, Ivy.  Though the material is considered not safe by previous users, it continues to be popular and is especially worn to major financial events.   The headsets can also be used when driving while texting at high speed, downhill, in heavy traffic.  

No Matter What Happens, Managers Will Still Be Clueless

Where the markets ride on the road through good news/bad news is only important to managers who  do not have a clue on how markets work.  A collapse or a surge higher in equities will be a short term opportunity.  The fact that managers cannot consistently deliver alpha no matter their pedigree is proof that most of them are accidental winners and perennial flat liners.   Up has always been the favorite of most successful macro equity managers and volatility with front running solutions has been the HF's bank.   Big Data momentum prop houses will be the next mediocre performers as short term momentum strategies will end up chasing their own tail as tightening latency solutions will deny any price separation opportunities between good news / bad news. 

Budget /Debt Ceiling struggles have gripped hard on upside hopes as congressional true believers bleed to promote a form of government servicing the privileged at the expense of those of lesser means.    But all governments in their evolution struggle with factions of extremism, adopting a tiny portion of their ideas but letting the bulk of it destroy the extremists who promote it.  

The problem in this particular market construct is the world has become accustomed to asset intervention and the belief it will always be delivered and will always work.   A default would be certainly bring significant flight to cash not seen since 2008.   A solution would put the bears on the bottom yet again.

Double Tops Never Fail

This is a double top of the ugliest sort.  A look at the top 1% share of total income.  The last time it was this high was in 1928.
Data from Mike Konczal (Rortybomb) of Next New Deal .

Bernanke Slaughters Bears/ Performances

Bernanke stuck it to the bears in stocks and bonds yesterday.  Bears in bonds will need an event not on the screen to reclaim any hope this year.  Bears in stocks will need a twist in debt ceiling/budget game.

Much talk has been about the anniversary of the 2008 crash.  Here is an accounting of eight stock performances this year and since December 31, 2007.  The first percentage return is this year, followed by last 5 years.

AAPL  -13%/ +134%  BAC +27%/-61%   GOOG +28%/+31%   GS +32%/-22%

IBM +.09%/+80%    MSFT  +25%/-6%  F  +36%/+134%  PFE  +16%/+26%

The Giant Squeeze On All Edges

Market topping action continues with Bears pushing hard to get the S&P500 action below 1650 to begin the journey back to 1550 for starters.
 
Tough year again for the general mass of fund managers who year after year continue to have lousy returns.  The HFT shops have found themselves lost without the ability to meaningfully front run any other HFT as Big Data looks like is will also be a big waste of time.  Every other proprietary firm is now either pimping services as a sell side vendor or working on the next big staff reduction.
  
Many of the desperate are pinning their hopes on the fixed income  death dive tsunami which now has been greatly anticipated each of the last three years.  This may be it but it probably isn't.  
 
The giant squeeze on all edges is upon the world.  Over employment has been replaced with falling work force participation but oddly creating falling unemployment rates.  Great trading performances have fallen victim to the great regression where what was once thought of a shop after shop and firm after firm of trading talent is now revealed guys looking more like the clueless they always were or even worse, as dumb as bankers.  Just showing up is out of business. 

Markets are more concerned about who the next Fed Chairman will be than war in Syria or the US budget deadline.  Obama looks like he has given the edge to Summers who knows less about markets and more about opportunism created by being a repeat offender creating personal wealth through public service and Ivy League circle jerks.   Markets don't like him because he is unpredictable.  Most don't like him because he is a jerk.  

QRiskValue

QRiskValue continues to bring the best of decision/analytics to its principals.  BaseOp2 relies on QRV data.

QRiskValue Ratings

Bernanke mixed signals on stimulus is a nod to the hawks as to the eventual winding down of stimulus.  And while it is clear  the Fed has managed to pump up a variety of top driven elements of the economy, some large financial institutions remain deceptively vulnerable.  Bernanke seems to realize there may be a grave danger in cutting help too early.

QRiskValue builds trading decision models and market analytic strategies on derivatives and a select number of stocks. The firm measures whether or not there a significant enough opportunity to take the risk of buying or shorting something.  So QRiskValue does not provide price targets but measures the overall quality of the risk being considered. According to QRiskValue, as of Friday's close, only MSFT is the only stock it covers with a highest riskvalue, on the buyside.  The highest QRiskValue on the sellside was BAC.  

Bend Like Bernanke

Bernanke took a page from Greenspan's playbook and played to the market bulls as he backed down yesterday from previous comments on his attempt to trim what Greenspan once called stock market "irrational exuberance".  Greenspan was great a looking responsible, but at any sign of stock market downside momentum, Greenspan would shamelessly wimp to Wall Street.   Ultimately it will not make any difference in avoiding the correction to the massive over reach of the last two years.  Upside rationale always seems infallible inside the glory of the rally.

End of Jubilee Days

Markets had a bad week with Bernanke deciding on Wednesday to speed up the  end of jubilee days after being virtually fired by President Obama Tuesday.  DJIA and SP500 dropped back to the idiots only break out level of April and now are poised to see whether they continue to slide now or wait till fall.  At the least,  DJIA will test the 14350 area with SP500 coming into 1550.

Bears Running Out of Room In AAPL

AAPL has now come into a value area where establishing long positions is a better option than being short.  It will now begin to retrace some of the declines made over the last several months but will be disappoint the koolaid bulls and have to become a great stock fairly priced.  Buyers will be able to establish longs between 385 and 420.  Having been bearish for sometime, those late to the party may trot out the 300 target, but they should have sold it long ago.