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Pre-Open Equity Ramp As Algos Track War-Ridden Oil Higher

Tyler Durden's picture


Each day we wake and look to the markets for guidance. Typically that guidance means - which easily-leveragable asset class can be pulled (or pushed) to move the US equity markets (in their algo-correlated manner) in which ever direction we need (up as much as possible obviously since the status quo requires it). Sometimes, it's EURUSD, other times it's PMs; today, it is oil's turn! There has been no real escalation in tensions in Israel in the last hour, no news of significance; and yet WTI has popped 1.5% and in an almost perfectly correlated manner, S&P futures have chugged along to the highs of the day to run those stops before the US day-session open. Efficient Markets... Pin Risk... OPEX...

Oil (black) vs S&P 500 futures (red)...


Chart: Bloomberg


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Fri, 11/16/2012 - 09:56 | 2987391 digitlman
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These markets are not rigged.


Ok, I can't say that with a straight face.

Fri, 11/16/2012 - 09:59 | 2987405 GetZeeGold
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I hope they can rig it for one more day....cause I forgot to get gas yesterday.

Fri, 11/16/2012 - 10:12 | 2987455 moonman
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I couldn't get gas yesterday either. My license plate ends in an even number.

Fri, 11/16/2012 - 10:05 | 2987428 Miramanee
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Rigged is not the perfect word. Perhaps....ummmmm....false is a better word. They are NOT markets: they are simply entensions of the false-free market, false democratic...what is said on the surface has nothing to do with what is really going on. Markets controlled by HFT algos and front-running's really just a ginormous lie.

Fri, 11/16/2012 - 10:17 | 2987469 Eireann go Brach
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I would like to fill Tim Geitner up with a few gallons of gas and then light a match!

Fri, 11/16/2012 - 10:55 | 2987629 tsx500
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i'm not sure there's enough room inside him for 'a few gallons' , since he's pretty much full of another semi-solid brownish material called shit .    maybe you could squeeze in a  couple quarts though....

Fri, 11/16/2012 - 10:23 | 2987495 disabledvet
disabledvet's picture

"Wall Street exists to make John D Rockefeller and friends happy." Only Zero Hedge would find that surprising. Obviously going over the fiscal "responsibility" will not cause a recession...but oil being correctly price at 400...0 a barrel will. "this is how those of you voted" folks. for "the method by which trillion dollar deficits get paid." obviously I'm not a big fan of this approach.

Fri, 11/16/2012 - 09:56 | 2987394 swissaustrian
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Come on high oil prices and war are good for the economy. We had full employment during WWII.

Fri, 11/16/2012 - 10:01 | 2987410 ekm
ekm's picture

Any movement like this shows DESPAIR.

This is pure DESPAIR

Fri, 11/16/2012 - 10:07 | 2987434 fonzannoon
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Hey EKM, somebody posted this yesterday. Take a look. It seems all they need is a crash to get the ball rolling on this. Then it's game over.

Fri, 11/16/2012 - 10:46 | 2987557 ekm
ekm's picture

Wow. This is like pure communism.

I thought about what you wrote yesterday. There are 3 main hindrances to get to the 'game over':

1) America has 300 million people. This is too, too, too many people to control.

2) The judicial system is extremely complicated. Lawsuits could drag that for years and years.


3) The most important one and this is unique to USA: THERE ARE HUNDREDS OF MILLIONS OF GUNS IN USA.

In order to impose something drastic like that, the masses must be oppressed. That is NOT possible, when the population is armed. This is quite unique for USA. No other country has an armed population.


My conclusion: If it goes to that point, a 2nd US revolution could be inevitable. I can't see that happening.

Fri, 11/16/2012 - 10:58 | 2987637 fonzannoon
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I think you are missing the orwellian component to this whole thing. The S&P crash will affect most of those 300 mil people in one shot. As far as the masses owning guns....a lot of the people around me own guns. When Sandy hit a few weeks ago those people lost power. Their guns did nothing. If anything they aimed them at each other. Mostly all they did was stamp their feet and demand their government do something. The same will happen when they lose all their money. They won't turn on the right targets. They will beg those targets for help. The government will be happy to step up. After we all have our gov sponsored private annuities if the gov does not like what you are saying on ZH the checks stop coming. It's a lot easier than you think.

Fri, 11/16/2012 - 11:02 | 2987659 ekm
ekm's picture

Anything is possible, then.

Fri, 11/16/2012 - 11:05 | 2987675 fonzannoon
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The only question in my mind is hyperinflation or hard default. One way or the other people are going to get wiped out.

Fri, 11/16/2012 - 11:08 | 2987689 ekm
ekm's picture

But that will lead to everybody beeing equally poor.

Misery will yield misery. A lot of people are ready to live in misery as long as they get some food to survive.

If you are seeing signs that 300 million people are heading that way, that is scary, it's not impossible, but it is scary.


Hyperinflation will happen if China stops exporting to US in exchange for worthless dollars.

There's no much difference between hyperinflation and hard default. It comes from shortages of goods.

Fri, 11/16/2012 - 11:17 | 2987738 fonzannoon
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It's not that people are ready to live in misery. It's that they refuse to give up whatever benefits they believe they are entitled too. They think that there is infinite money to provide all these benefits. The math on this is unfortunate and people will learn that the hard way.

Fri, 11/16/2012 - 11:22 | 2987755 ekm
ekm's picture

You are scaring me. I don't want to live in that system again.

I live in Toronto, but if USA goes eastern european way pre-1990, we are all screwed.

Fri, 11/16/2012 - 11:30 | 2987781 fonzannoon
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I am not trying to scare anyone. But if people don't wake up to all this I don't see a way around it.

Lawsofphysics just said this on another thread. A lot more eloquently than I did.

"Look people, the laws of Nature and physics make no promises reagarding anyone's survival, they never have.  Don't get mad, it is what it is.  Invest in your own employees and neighbors, you will need each other shortly.


Bloody sheep."

Fri, 11/16/2012 - 10:02 | 2987415 scatterbrains
scatterbrains's picture

If these moves were real gold would have confirmed.  The Fed and their family and friends buy or sell gold for their own accounts based on their shared insider information.  Gold is lower and so you can expect that by this afternoon all these /ES dip buyers will get their greedy little fingers cleaved off at the nubs... unless gold ramps out of no where.

Fri, 11/16/2012 - 10:03 | 2987421 Confundido
Confundido's picture

I no longer check prices. I check volumes.

Fri, 11/16/2012 - 10:33 | 2987537 youngman
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And the things that I watch...volumes are down...big...30% or more

Fri, 11/16/2012 - 10:06 | 2987430 LongSoupLine
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Wow, wait till the SEC and CFTC get ahold of the traders that did this....


and have drinks with them later this afternoon.

Fri, 11/16/2012 - 10:08 | 2987440 1fortheroad
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Thou shall NOT short this market.




Fri, 11/16/2012 - 10:12 | 2987453 Village Smithy
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Only in this insanely manipulated market could Dr. Engali and 1fortheroad both be right. Therefore the only viable position is cash and silver.

Fri, 11/16/2012 - 10:08 | 2987441 Dr. Engali
Dr. Engali's picture

Transitory...we will close lower. What robot wants to be long over the weekend?

Fri, 11/16/2012 - 10:09 | 2987446 SheepDog-One
SheepDog-One's picture

Why check computer controlled zombie stocks to 'see whats going on'...that makes no sense to me. One morning 'traders' will just be staring at a blank screen.

Fri, 11/16/2012 - 10:18 | 2987473 hero HNL
hero HNL's picture

I thought it was funny....


I was looking at CL-Jan awhile back & it suddenly took off for no appernet reason. The excuse was about Gaza & Telaviv getting is acting very strange right now.




Fri, 11/16/2012 - 10:20 | 2987482 hero HNL
hero HNL's picture

Eur, GC & PL down a lot this morning.....they should be rising if MEast were really in trouble.

Just my 2 cents.



Fri, 11/16/2012 - 10:20 | 2987485 lolmao500
lolmao500's picture

Egyptian president Mursi says Cario will not leave Gaza on its own and Israel's attacks on Gaza a blatant aggression against humanity


I wonder what will go up when Israel ends up nuking Egypt, Iran, Lebanon and Syria.

Fri, 11/16/2012 - 11:13 | 2987707 awakening
awakening's picture

'I wonder what will go up'

Death count of just about everything, including Isreali citizens.

Not all going the way of 'the chosen people' either:

Fri, 11/16/2012 - 10:31 | 2987534 mdtrader
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With the daily RSI around 30 it's no surprise to see some buyers or shorts being covered. If the market catches a bid then it could move swiftly back to 1390/1400 as the shorts scramble.

Fri, 11/16/2012 - 10:37 | 2987549 Village Smithy
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Yes, unlimited amounts of free cash available to the PDs and their algos does make shorting a risky business.

Fri, 11/16/2012 - 10:52 | 2987601 mdtrader
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Apple's RSI is down at 24. I think there's going to be a big rectracement there soon.

Fri, 11/16/2012 - 11:52 | 2987906 orangegeek
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These algos can push the market around from time to time, but the bigger trend is down.


18,500 folk just lost their jobs today - this is not a bullish action.
