Stocks And Bond Yields Play Catch Down To Gold's Friday Weakness

Tyler Durden's picture


Friday's afternoon avalanche was unevenly distributed across asset classes with Gold and Oil leading the move lower, the USD limped higher, and until late in the day, stocks and Bonds meandered along together. Equities' late-day plunge saw it catch down to Gold's move and this morning we see the USD and US Treasuries rallying and resyncing to the rest of the asset classes. Volume is leaching away now that Europe is closed and correlation across asset-classes is on the rise as they now seem range-bound. The most notable 'divergences' are among the various ETFs as VXX (volatility) is rising notably, HYG (credit) is losing ground, and TLT (rates) are rallying while SPY (stocks) are unchanged...


Cross asset-class convergence following Friday's divergences...


but ETFs are divergent...


and summarised in the chart below...


Charts: Bloomberg and Capital Context

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Mon, 11/05/2012 - 13:56 | 2949111 firstdivision
firstdivision's picture

Window dressing for tomorrow is all.  After 4pm tomorrow, all bets are off.

Mon, 11/05/2012 - 14:05 | 2949141 Dalago
Dalago's picture

Remember remember the fifth of November
Gunpowder, treason and plot.
I see no reason why gunpowder, treason
Should ever be forgot...

Mon, 11/05/2012 - 14:09 | 2949148 vix is for kids
vix is for kids's picture

Not quite up to the Limerick King's work, but a nice effort.

Mon, 11/05/2012 - 14:20 | 2949192 Dalago
Dalago's picture

Its from v for vendetta

Mon, 11/05/2012 - 14:37 | 2949214 crusty curmudgeon
crusty curmudgeon's picture

Happy Guy Fawkes Night everyone!

Let's all celebrate by ending voluntary servitude...

Mon, 11/05/2012 - 14:24 | 2949209 Sweet Chicken
Sweet Chicken's picture

WOOSH right over your head

Mon, 11/05/2012 - 14:13 | 2949162 Conrad Murray
Conrad Murray's picture

The live streams are up. I sure hope nobody blows up Parliament...

Mon, 11/05/2012 - 13:57 | 2949112 slaughterer
slaughterer's picture

All that red shadow below $0.00 on the SPY arbitrage model is Kevin Henry's work.  

Mon, 11/05/2012 - 14:00 | 2949126 crusty curmudgeon
crusty curmudgeon's picture

It looks like that sea monster (in 2nd chart) is about to snap his mouth closed.

Mon, 11/05/2012 - 14:03 | 2949135 flacon
flacon's picture

You're right. Looks like the angler fish from Finding Nemo:



Mon, 11/05/2012 - 14:22 | 2949199 slaughterer
slaughterer's picture

Problem is that TLT (part of the sea monster upper lip) will probably remain open if the other part of the lip (ES/SPY) closes.  

Mon, 11/05/2012 - 14:05 | 2949138 TeamDepends
TeamDepends's picture

Anyone who believes the numbers on the screen is a moron.

Mon, 11/05/2012 - 14:17 | 2949179 tooriskytoinvest
tooriskytoinvest's picture

MUST-READ: The World is Getting Robbed: Bailouts Going to Money Laundering!!


Mon, 11/05/2012 - 14:17 | 2949184 Quinvarius
Quinvarius's picture

I can't speak for the average investor, but I rebalanced in favor of gold after the beatdown.  Seemed like an overdone pull back after a breakout from a year long consolidation wedge to me.  But, I am mediocre at timing paper gold prices.  I just got a slightly better price than last week is all.

Mon, 11/05/2012 - 14:24 | 2949210 q99x2
q99x2's picture

There is Ralph's supermarket weakness on the west coast. Due to Sandy all stores are closed.

Mon, 11/05/2012 - 14:30 | 2949236 Quinvarius
Quinvarius's picture

My overall view is that about the time JPM lost 7 billion dollars the banking system started icing over again.  I see some things on money supply charts that I thought were flukes, but they remain on the charts still.  yes.  I have no doubt they were connected issues as 7 billion absolutely had to be the collateral for 280 billion in other trades.  QE3 was mostly the paint job on the JPM bailout.  It was legitimizing deals the Fed already made.  Now the system needs a QE4.  A real bailout.  Which makes me laugh because it is every bit as predictable as QE3 was.  The Fed is doing everything it can to lower inflation expectations as it prints untold amounts of money.  The Hurricane is a fantastic cover for QE4 in the form of secret unannounced loans.  IMO, the temporary check on gold is proof that there is something massive being done in the form of money printing behind the scenes.

Mon, 11/05/2012 - 14:41 | 2949283 crusty curmudgeon
crusty curmudgeon's picture

I remember reading about one of the ways Weimer was made worse...because the moneyprinters believed their own lies that there was no significant they were empowered to print more.  A bit of a vicious circle.

"History doesn't repeat itself, but it does rhyme." 

Mon, 11/05/2012 - 16:33 | 2949647 leadingmarkets
leadingmarkets's picture

Anyone try trading penny stocks? I found

Mon, 11/05/2012 - 23:27 | 2950805 geoffr
geoffr's picture

So how is Apple a huge bubble, but gold not if I am to follow the thinking on this site? (Full disclosure: I like both and would like to buy both on their downturns.)

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