Thursday, September 24, 2015

"Bears Beware": Shorts Just Covered

ZH: Sept. 24, 2015
"Prescient Quant Just Flipped Bullish"
The "timely" quant who exact-timed the Flash Crash has now switched to a bullish stance. His first bearish call (Aug. 21st) directly preceeded the 1,000 point Dow collapse; however, his next two bearish calls (Aug. 27th/Sept. 3rd) were within the range of the rising wedge, so he was only right one time out of three. Nevertheless, the market rallied today within minutes of his new call...

Aussie /Yen: The bleeding indicator:
Far from Quant-land, today's short-covering rally was telegraphed hours earlier by the counter-trend rally in the Aussie /Yen, which started this morning. 

Because although the S&P is one degree removed from Aussie/Yen (via USD/Yen), nevertheless, this pivotal carry trade currency pair serves as a very useful leading indicator for where this shit show is heading...

In other words, today's "squiggle" in the S&P (black) was preceded by the same "squiggle" in Aussie/Yen (red):

This chart below is the chart above, on a 20 year timescale...