Payroll number? What payroll number?

It's interesting to see that since the release of the strong figure on Friday, EDZ5 has retraced all of its price action....





....as has USD/JPY.



Spooz, of course, have only given back a portion of their gains, because well....SPOOZ!



Most interestingly, high yield has barely given back any of its gains at all.



That, ladies and gents, is what a positioning wash-out looks like- when the "best" trades perform the worst.  Perhaps one might one to consult the Field Guide to Birds of the West Indies to see if there are any more dodgy pink flamingos lurking.....
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Anonymous
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October 7, 2014 at 4:08 PM ×

C says
Oh I think the Spooz will get there. Second leg might even have started.

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Anonymous
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October 7, 2014 at 8:39 PM ×

Good read on the market

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Anonymous
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October 8, 2014 at 4:10 AM ×

Steen Jakobsen prediction: US 10 year @1.5% in Q2/15..why?

https://www.tradingfloor.com/posts/jakobsen-my-essential-trades-for-q4-1852395


+184 on 2-10yr .... we are at new 16mo flat

TLT shorts for 2014 now down almost 20% ytd

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abee crombie
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October 8, 2014 at 5:11 PM ×

XLE, wow, killing the oil stocks.

Starting to look interesting, just gutted I didnt keep my short ;-)

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Mr. T
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October 8, 2014 at 6:01 PM ×

XLE might be the first leg to go here - if what we are seeing is Saudi actually being aggressive with price US domestic production has a really tough road ahead. Rails seem priced to perfection with their 100% capacity from oil. MidConn refiner thesis is certainly questioned.

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Leftback
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October 8, 2014 at 6:23 PM ×

They said Japan was unique, and it could never happen anywhere else. They were wrong:

Convergence of 5y Yields

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Leftback
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October 8, 2014 at 6:27 PM ×

VIX making a right-hand shoulder, usually a sign of selling/hedging exhaustion and a precursor to a rally of reasonable size in Spooz. Fed minutes ahead, and a dovish read thereof might provide the impetus for:

Lower EURUSD
HIgher Spooz
Lower US10y Yield

Caution, little bear cubs. Predators are out there.

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Leftback
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October 8, 2014 at 7:28 PM ×

Just like that, in fact.

I'll be here all week. Well, actually going to bugger off early tomorrow, before lunchtime. Decent week so far. Now bring on the EU data, Buy The News and watch the Euro shorts squeal.

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Leftback
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October 8, 2014 at 7:30 PM ×

FMFR in progress. Fed Minutes Face Ripper...

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Anonymous
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October 8, 2014 at 7:41 PM ×

Wow. So let me get this straight - the fed will raise rates once DXY is at 70, U6 is at 4%, inflation has done its 7 year catch-up (which would need at least 3 years of 5% if my math is right). I have the curse of being old enough to have been running money back when we were scared of the fed. What is this creature today?

And the risks continue to be minimized, if not ignored completely. Franky, I just don't get it. The best analogy I can think of is the ill conceived policy the US Forest Service had in place for the greater part of the 20th century to not let forest fires burn. The result was some truly horrific fires, lasting damage to the ecosystems, and ultimately a reversal of the policy in favor of seeing the benefits of letting nature do its thing - small fires that provide the foundation for future growth. It's not just a stock or bond market correction that is the problem but a persistent misallocation of capital that is only possible in a zero rate, low growth environment.

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abee crombie
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October 8, 2014 at 7:45 PM ×

They were dumping anything oil related this morning and now, well thanks Yellen, what a face ripping rally.

Lots of MLPs got in the mix as well.

At least we have some Volatility

Agreed Mr T on the rails, they are a little bit pricey here. Great business though. 8000 big level in Transports..

Whats up with FTSE ... septuple top. DAX just looks ugly with VW leading the way down

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Mr. T
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October 8, 2014 at 8:50 PM ×

Nice call LB. I'm not even sure "call" is the right phrase here - you pretty much nailed this thing. Of course its a high probability bet anymore that fed_anything=rally in bonds and stocks, but still.

Not to be picky but with SPX up almost 2% in the afternoon it would have been nice to see at least a little lift in WTI. Hopefully this is the spark that gets the EOY beta chase going.

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Anonymous
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October 8, 2014 at 9:54 PM ×

Japan auctions 10 year inflation-adjusted government bonds at NEGATIVE yield of 0.658%

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