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Market Recap: 1.13.2011

Tyler Durden's picture




 

Goldman's Henry Bowe summarizes the day's key events

Modest selloff in equities today, which is actually somewhat surprising. Better global backdrop: European sovereigns tighter. Domestic conditions encouraging: weaker USD + lower rates. Easy to chalk weakness up to disappointing claims data, but those early losses were actually recovered by midday. So looking at the macro dashboard what sticks out? Munis. MUB retesting the lows as plans for new muni bond ETFs are scrapped. Remember too that muni bond funds have recorded eight-straight weeks of outflows according to Lipper data. SPX closes down 2 at 1284. The DOW closes down 24 at 11732. The NASDAQ closes down 2 at 2735.

The VIX closes up a modest .15 at 16.39.

Focus remains on EURO in FX today as the short-squeeze continues. Three-big figures today in EURUSD. Approaching serious resistance however – 55d, 100d, 38% FIBO, DeMark, January high. And the supply has finally started to come in front of it. Still, the level of conviction is much lower here than when spot was sub-1.30. That’s what five big-figures in four days will do I guess. Though the USD did weaken across the board, today really was about EURO outperformance – the single unit made gains against every currency I have on my board with the exception of HUF. Makes sense given hawkish comments from Trichet and the subsequent selloff in euribor.

This week’s much talked about European supply came to an end today as Spain auctioned 3bn 5yrs and Italy sold 6bn 5yr/15yrs.  The Spanish supply was less well received and both countries widened from the tights of the day while bunds and USTs rallied outright. Treasuriescontinued to rally on what felt like a short squeeze into the 30y auction causing it to tail by 2.5bps.  The market traded well on the follow on as focus returned to the respite from supply for a few weeks and the sizeable buybacks ahead. 7s were the best performer on the day rallying 7.4 bps while 2s and bonds were only 1.6 and 2.4bps better respectively.  In swap space we saw fast money going both ways in 5-10 yr spreads, as well as net better paying in 30yr spreads from both real and levered money.

In commodities, oil about 50c to $91.40/barrel, with a big drop following the close on news of the postponement of a refinery shutdown. In addition, the Brent / WTI spread has widened to levels unseen since early 2009 (-$7.25/barrel). In metals, gold traded in perplexing fashion given a backdrop of USD weakness (down almost 1% to 1374 despite a near 2% rally in EURUSD). Technical congestion around these levels isnotable. Ags continued their upward climb today, maintaining momentum from yesterday’s bullish USDA report. Both corn and soybeans rallied to their highest prices since 2008 (corn up 1.82% to $6.425 / bushel and soybeans up .071% to $14.16 / bushel).

After opening a touch tighter,credit sold off with the weaker than expected claims data and slide in stocks bringing a bid for protection into the market.  Despite the general market weakness, there continues to be some demand for front end risk.   IG widened 0.5bp to 84.75 and HY dropped 3/8 to 103 3/8.

Tomorrow brings a slate of US data – CPI, retails sales, and IP – along with inflation numbers out of India and the Eurozone

 

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Thu, 01/13/2011 - 19:54 | 874812 Harmonious_Diss...
Harmonious_Dissonance's picture

The last couple of days have been hard on the 'ol US dollar! I don't understand the Forex, it moves according to the tides? Is there some conjuction of saturn? Silver got taken down a notch today as well....hmmm

Thu, 01/13/2011 - 20:08 | 874816 hambone
hambone's picture

Why is this still called a "Market" recap?

It's time for a rename for what was formerly known as the "market". 

Ideas???

POMO-a-GOGO?

Fraudcap?

Giveaway-all-you're-$-2-PD update?

Thu, 01/13/2011 - 20:20 | 874879 small watcher
small watcher's picture

Dissociative economic fixation?

Thu, 01/13/2011 - 20:34 | 874925 hambone
hambone's picture

Honey, is that you? 

That one must have been submitted by my wife.

Thu, 01/13/2011 - 20:02 | 874825 99er
99er's picture

SPX

A newbie's Elliott Wave count. No grief, please, but constructive comments welcome!

http://99ercharts.blogspot.com/2011/01/spx_29.html

http://www.zerohedge.com/forum/99er-charts-0

Thu, 01/13/2011 - 20:16 | 874864 Ferg .
Ferg .'s picture

Looks like a clean count to me . Despite all this irrational bullism I think a lot of people don't realize that according to the charts we're still in a correction within a bear market .

Thu, 01/13/2011 - 20:16 | 874865 Ferg .
Ferg .'s picture

Looks like a clean count to me . Despite all this irrational bullism I think a lot of people don't realize that according to the charts we're still in a correction within a bear market .

Thu, 01/13/2011 - 20:40 | 874941 99er
99er's picture

Double thanks.

Thu, 01/13/2011 - 21:39 | 875065 Ras Bongo
Ras Bongo's picture

Clean count from March 2009 but the FIBs should be counted from the 2007 Super-Cycle top.

Thu, 01/13/2011 - 23:23 | 875246 99er
99er's picture

Thanks for the suggestion. For anyone interested in seeing how counting is open to broad interpretation, see here.

http://kennystechnicalanalysisblog.blogspot.com/2011/01/stock-market-con...

Thu, 01/13/2011 - 20:04 | 874836 dearth vader
dearth vader's picture

Interventions recap?

Thu, 01/13/2011 - 20:07 | 874840 goldmiddelfinger
goldmiddelfinger's picture

I can't change my avatar. website managers need oxycotin relif

Thu, 01/13/2011 - 20:31 | 874915 rosiescenario
rosiescenario's picture

....whatever happened to silver today??????? Weak USD, but down she went?

Thu, 01/13/2011 - 20:55 | 874973 RobotTrader
RobotTrader's picture

Gold and silver stocks destroyed.

Semis were Heatmapped in advance of INTC.

Retail and banks pretty much flat.

Dow and Transports both pinned at the highs, no divergences yet.

Asia still strong.

Thu, 01/13/2011 - 21:04 | 874989 hambone
hambone's picture

No gratuitous cleavage or heaving mound o' breast?  This is a new, more focused Robot...going for Trader of the year 'eh?

Thu, 01/13/2011 - 21:37 | 875060 rosiescenario
rosiescenario's picture

"Gold and silver stocks destroyed"

 

...yes we know that...the question asked was why in the face of a weaker $$??

Thu, 01/13/2011 - 21:11 | 875008 lsbumblebee
lsbumblebee's picture

Gold drew a picture of a rocket ship, then did it's impression of a drunk with an etch-a-sketch. Officials assure this normal behavior and no cause for alarm.

Thu, 01/13/2011 - 21:14 | 875013 hambone
hambone's picture

That's crazy shit - you know once inanimate objects start drawing and doing impressions, TSHTF.

Thu, 01/13/2011 - 21:36 | 875056 lsbumblebee
lsbumblebee's picture

Please remain calm sir. I can assure you the shit has in no way come even close to hitting the fan.

Thu, 01/13/2011 - 22:34 | 875157 wswarrior
wswarrior's picture

The DOW has not fallen below 40 points since 11/30.  Let me repeat, in 31 trading days, the DOW has not closed 40 points down or more once.  Further, it has only had one trading day during the same period where it has traded down more than 25 points.  How is that nobody questions this, even bull markets have profit taking.  Mind you that this rise has taken place as the Euro has tanked.  

Fri, 01/14/2011 - 00:08 | 875302 X. Kurt OSis
X. Kurt OSis's picture

Since you boys spend so much time trashing the squid, the squid has decided to cut you all out of the market all together by no longer allowing any dips to fuckin buy (bitchez).

P.S. First post here. I think I'll stick around.

P.P.S. My real answer is that since the floor was taken out on the VIX by the Fed and given the slope of the vol curve, the algos will only bid up the stock market. We can all go home now. The machines will take it from here.

Kurt.

Fri, 01/14/2011 - 06:08 | 875550 sheep92
sheep92's picture

You are right about the vol curve but fail to understand the consequences.  While the curve remain steep the  absolute level is falling rapidly and the buildup of positions must be very large indeed.  We are setting up for an 'event'.  The carry on short vxx is on the order of 10% a month and like a moth to a flame the herd has been drawn in sure that they can hedge on the way down should anything happen.  How quickly they forget the flash crash.  The machines defintely will take it from here.  The only thing really in question is when and where.

Fri, 01/14/2011 - 05:37 | 875542 nontaxpayer
nontaxpayer's picture

So where is the flow of cash going, everything seems to be softish or down?

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