part 2

2. What a bloodbath in commodities – Crude is down 11 Dollar on 1 day – tomorrow should be margin calls across all products and more liquidations. Horror day or week for many Hedge Funds as they were in the same long trades. ‘Bin Laden’s’ death –  a fairy tale – but still marks quite a high for many markets. 

Financials have been in a steep correction for weeks now and basic material kept markets up – well thats over as well. One big trade came back as expected as the Yen made back most of its losses, which will present a big opportunity soon selling it again short as the recent move was wave 1 and wave 3 after 2 is done very soon will be much more steep (will make a chart analysis the next days, need to see the weekly close first).

excerpt

WTI Drops Below $100, Down Almost 10% On The Day, Complete Wipeout In Euro Brent

Submitted by Tyler Durden on 05/05/2011 14:19 -0400

The anti-speculator witchhunt is bearing fruit: following the wipe out in precious metals, the next, and key, target of this commodity take down, crude, just went from triple to double digits, hitting a low of $99.70, with the $100 limit orders resulting in a surge in the USD and accelerating the drop in EUR. Stocks continue to be completely disconnected from this massive liquidation across all commodities, as every mutual fund knows all too well that Ben will always step in and make sure that the Russell 2000 never has a downtick. Yet this complete isolation of equities from other products merely confirms that not even the HFTs correlate stocks to other asset classes. It also means that HFTs are no longer present in stocks, which means that even the fake liquidity provided by HFTs is no longer there, and we will likely have a far worse flash crash the second Brian Sack loses control of the stock market.

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~ by behindthematrix on May 5, 2011.

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