Electile Dysfunction – Market Just Couldn't Keep It Up

The early day surge in stocks and commodities (and sell-off in bonds) managed to get S&P 500 futures up to their 50DMA and the pre-NFP levels (which coincides with Bernanke’s Bottom). Volume surged on the way up there and once hit we faded all the way back to VWAP (surprise!) retracing the knee-jerk spike as no news was discounted back out (and equities reverted to where risk-assets in general had been waiting). Commodities followed a similar path up but held on to their gains – especially Gold. Somewhat worryingly (given their dominance in fund holdings) for the market, GOOG and AAPL were both red. Today seemed much more about algos and technicals than about election bets – especially given the somewhat anti-consensus moves early on – and on the basis of that, the fade into the close suggests risk-reduction was the game plan for the big boys, even though we end the day in the green in the major indices. The USD is practically unchanged on the week with stocks and commodities up and TSYs down.


S&P 500 futures knee-jerk ramp followed by leak back to VWAP perfectly


Leaving stocks bouncing down from Bernanke’s Bottom once again…


and Financials unchanged since QE3 and Healthcare the only sector in the green…


and early equity exuberance faded bacdk to reality across the rates. volatility, and credit markets…


Bonds and Stocks recoupled from yesterday’s divergence but Gold outperformed…


Commodities spiked higher as Europe closed and held those gains…



Treasuries are set to rally if seasonals are anything to by – and the rally is even more impressive in election years (blue) relative to all years (green)…


but as Citi note – the difference between a Democratic victory and Republican victory is notable…


And equity market complacency in the short-term is remarkably high in options land – and we note that VIX options term structure is its flattest in over 15 months – as the front of the curve rises (not back-end dropping) dominated by short-term hedging around the election (VIX near is 19.24%, VIX far is 17.42% – i.e. Inverted)…



It may seem odd to claim today was not a risk-on day – as we are being taught by the mainstream media – but ion the basis of the no volume ramp and higher volume leak back, the technical levels of the peak, the weakness in critical leaders (GOOG and AAPL), and strength in Gold (safety) suggests this was not about any size looking to add – in fact we would argue the spike was much more useful for those looking to exit on size.

As Maria B might say ‘off the highs’…

Charts: Bloomberg and Capital Context

The Little Picture: The Six Most Important Counties

Overwhelmed by the information overload? Drowning in a sea of demographically sliced-and-diced exit-polls from every polling booth in the nation? Have no fear, Citi has created the ultimate election night cheat-sheet of the bellwether-est counties in the swing-est states. As they note, over the past three elections, these counties’ vote totals have been very close to the statewide results, and they’ve picked the statewide winner each time. This makes them early indicators of the electoral vote winner in their states. Whether a Sun Belt growth county, an exurb, a middle class university area or a Midwestern farm community, all these areas are representative of key demographic groups wooed by both the two parties over the past decade.



Source: Citi

Evidence of Electronic Vote Fraud Pours In from Both Liberal and Conservative Sources

Ron Paul supporters, progressives and the mainstream media have all discussed the potential for vote fraud.

A global internet voting company headquartered in Spain recently purchased America’s dominant election results reporting company.

The Wall Street Journal wrote in a 2008 article entitled, “Will This Election Be Stolen?“:

And then there are the e-voting machines. Since early voting started recently, worried voters have reported seeing their votes flipped from Barack Obama to Mr. McCain in West Virginia and Texas.

We reported in 2006:

The non-partisan and highly-respected government agency, the Government Accountability Office, verified that the electronic voting machines used in 2004 were wide open to fraud, and that fraud likely occured in Ohio, Iowa, Nevada, New Mexico, and other states.


The security flaws in electronic voting machines are so complete that anyone can instantaneously install software which will change the vote counts. See this New York Times’ Magazine analysis, and also E-Voting Machine an Easy Hack from Wired Magazine.


Exit polling data shows that there was vote fraud.


And Robert F. Kennedy Jr. and leading reporter Greg Palast have shown that the emperor’s cronies intentionally spoiled, rejected, purged and otherwise refused to count enough ballots to take the election away from Kerry (not that I like Kerry). See also this article.


Moreover, And spend 10 minutes at this website and you’ll realize that electronic vote fraud is not some raving conspiracy theory, but is real.


Indeed, the following headlines from the last two weeks hint at the magnitude of the fraud:

In this 2012 election, reports of electronic vote fraud are now pouring in from both liberal and conservative sources:




“Experimental” software patches on Ohio voting machines may sway the vote.

And Steve Watson notes:

Multiple reports of electronic voting machine irregularities have begun to pour in from all over the country as Americans take to the polls today.


Voters in Hamilton County Indianapolis were forced to wait for 30 minutes to begin voting because the machines were not working when the polling station opened.


The AP reports that “cards used to clear tallies from machines before voting begins were improperly programmed,” meaning that around 500 machines had to be “reset”.


The Toledo Blade reports that some 100 voters were unable to cast ballots this morning in Bedford, Ohio, because a voting machine was not working. Officials said that a memory card had to be replaced. Long lines led to people walking away.


In Dubuque, Iowa, more voters were delayed when machines failed to operate for around 45 minutes after the polling station opened.


Reports from across North Carolina, one of the key swing states, are pouring in suggesting that voting machines are flipping votes from one candidate to the other.


In Greensboro, “a voter complained that they tried to vote for Mitt Romney three times but that the ballot cast was instead for Barack Obama. Other voters in Guilford County and in some other parts of the state said they experienced similar issues.”


In Charlotte, another voter reported the same problem.


In Rehoboth, Massachusetts problems with voting machines were also noted. The machines officials are using are 14 years old, according to the report. Problems were also reported in Tewksbury, Massachusetts.


In Milford Township, Pennsylvania, three voting machines stopped working after just one hour of voting. After a technician got them working again, one of them broke down a second time, causing waiting voters to begin discussing their distrust of the machines and the potential for voter fraud.


In Crawford County, problems with machines were also reported. They had not been set to the correct time, so were unable to be used for a short period of time.


In Missouri, the Secretary of State’s office has been forced to respond after numerous voters claimed that machines were flipping votes for Romney to votes for Obama.


In Pittsburgh, voters have reported multiple problems with voting machines.


In Sandy Springs, Georgia, hundreds of people were delayed when voting machines went down at around 11 a.m.


In Nashville, Tennessee, technical issues with the machines were reported by many voters, while in Chattanooga, machines malfunctioned, meaning some voters had to put their ballots in the machine without them being scanned.


In Fredericksburg, Northern Virginia, hundreds of voters were turned away as all of the electronic voting machines at one polling station failed to operate. Polling workers only had 50 paper ballots available. Worse still, some voters who used the machines were told that their votes would not count if they had placed them before 8am.


In Spartanburg County, South Carolina, voting machines have failed to work all day and election officials have twice run out of paper ballots.


In Faulkner County, Arkansas, machines were reported inoperable.


Some areas in Virginia reported voting machine problems.


Voters in California have complained that voting machines switched their votes for Obama to Romney.




Last week this same problem was reported in six other states.


In Ohio, a lawsuit has been filed following the installation of software into voting machines by the state that experts say could allow “back door” vote manipulation by non-election board officials.


Green Party candidate Robert J. Fitrakis filed papers yesterday in federal court in Columbus, seeking an order blocking the use of the machines and the software in vote counting. Named as defendants in the case are Ohio Secretary of State Jon Husted and Omaha,


Nebraska- based Election Systems & Software Inc.


As we have routinely reported during elections, electronic voting machines have caused significant problems. Many security experts are adamant that the machines can easily be hacked, and past cases have shown that vote fraud has been facilitated by the use of electronic voting machines.

Meanwhile… In Cupertino

While the equity market is blissfully holding its no-news gains, everyone’s favorite hedge fund hotel just hit the lows of the day… Having tested up to the 200DMA, AAPL is now leaking back under Friday’s closing VWAP… Need moar channel-checks and $1111 analyst price-targets on TV stat!


Today saw once again a vertical rally up to VWAP (red) and then volume fade and now we are losing yesterday (yellow) and Friday’s (blue) closing VWAPs…



At some point the humans will become aware of the Algos and we suspect a sinularity will occur…

Gossip and views about privacy, gold, wealth, asset preservation