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A Game Of Two Halves As Equities Tumble To Risk Reality

Tyler Durden's picture





 

Leveraging EUR strength (USD weakness) in the US-open-to-EU-close to ramp stocks to highs was rapidly followed by a collapse back to reality in US equities from EU-close-to-US-close. Just remarkable. Treasuries and FX markets were much less exuberant over the entire lack of news that drive the S&P up over 20 points from open to EU close and sure enough - helped by the obvious desperation of a 'failed' Yellen-threat - equities retraced it all; ending the day back near the recent lows. Stocks once again tested the bottom of Draghi's Dream and rejected it; commodities were mixed and very dispersed with Copper and Silver swinging wildly (up on the day) even as the USD ended the day practically unchanged. Tech and financials are the losers still on the week as AAPL clawed its way back to marginally green by the close with the magical $545 level now critical four days in a row.

Remarkably, equities exuberantly accelerated away from reality to the European close and then gave it all back to close in line with risk-asset-reality...

 

A game of two halves indeed for today - separated perfectly by the correlation between EUR strength in the EU hours (repatriation flows) correlated with risk-on which suckers stop-runs in equities... then fades as the real sellers of strength on earnings and fiscal cliff realities take over...

 

Commodities went wild today... the pre-opening monkey-hammering suggests someone (or two) got the tap-on-the-shoulder we suspect...

 

and AAPL seems to be building some real tension at $545 (four days in a row we have seen closing VWAPs around that level)...

 

and it seems like all NFLX needs is an OPEX to un-pin itself from this new regime...

 

and despite Ackman's protestations, JCP dropped another 3% on the day (gradually catching down to its single-digit CDS-implied valuation)

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: The Jawboning is officially over...


 


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Tue, 11/13/2012 - 17:22 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Selling, but who, or rather what algobot and primary dealer is getting the call, as in margin call?   Thoughts?

Tue, 11/13/2012 - 17:25 | Link to Comment slaughterer
slaughterer's picture

ZH should report on the BAC-MBI story.

**

Tomorrow is lock-up expiry on massive amount of FB shares.

Tue, 11/13/2012 - 17:27 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Indeed.  Don't spook the sheep, I am already on the other side of the boat.

Tue, 11/13/2012 - 17:28 | Link to Comment redpill
redpill's picture

Dear Major Stock Market Indices,

Remember to make sure you don't wind up in an uncontrollable spin before you get down to the altitude where you should be.

Sincerely,

Felix Baumgartner

 

Tue, 11/13/2012 - 18:09 | Link to Comment Cdad
Cdad's picture

Ummm...I like those uncontrollable spins.

Tue, 11/13/2012 - 17:52 | Link to Comment duncecap rack
duncecap rack's picture

I was hoping they would report on MBI BAC also. I couldn't quite figure out how paying par on the bonds would be to BAC's benefit. Wouldn't that be a big expense to prevent the bondholder haircut?

Tue, 11/13/2012 - 19:18 | Link to Comment ShrNfr
ShrNfr's picture

It is big enough to force a block on a class in a bk or otherwise. That may be all that matters.

Tue, 11/13/2012 - 17:22 | Link to Comment So-Crates_Johnsen
So-Crates_Johnsen's picture

Ancient Greece, bitchez!

Tue, 11/13/2012 - 17:23 | Link to Comment I am more equal...
I am more equal than others's picture

light the fuse - bernake is going to blow!

or is that suck?

Tue, 11/13/2012 - 17:26 | Link to Comment LongSoupLine
LongSoupLine's picture

like i said at 11:42am, when the "market" was in a "rally"...

 

 

"the day's not over yet"

Tue, 11/13/2012 - 18:44 | Link to Comment westboundnup
westboundnup's picture

You called it.

Tue, 11/13/2012 - 17:27 | Link to Comment azzhatter
azzhatter's picture

but......but.... we're going to be the world's largest oil producer in 5 years. and we have Ben "Fuckstick" Bernanke

Tue, 11/13/2012 - 19:13 | Link to Comment Winston Churchill
Winston Churchill's picture

Five years is a long way off.

May as well be a 100.

Or is that five years after Obummers second term ?

Tue, 11/13/2012 - 17:36 | Link to Comment VonManstein
VonManstein's picture

Whats most interesting is that USD is also being faded so it seems. SPX gave it all back today but EUR AUD NOK even CAD.. not so much. rather much higher than they were before we got the equity and FX spike

Also DAX is outperforming SPX by a wide margin now YTD.

I think this is slowly becoming a big deal, RBA interest rates are at 3.25% and "the market" finally seems to be paying attention to this fact.

DXY is in a rising wedge and looks topish. i say down tomo.

NZD AUD still above breakouts. NOK rangebound to flat and the EURUSD isnt really moving, it is sort of confirming the market term "priced in" horrible ZEW didnt do much today.

US is in trouble across the board basically. im thinking a short SPX and short USD (via FX and PMs) trade could work on both fronts

Tue, 11/13/2012 - 18:28 | Link to Comment chump666
chump666's picture

The market is hedged on DXY strength and scalping equities (mainly HFTs) on the MA's, selling into the close.  The FX yielders are safe havens only because bizarrely the iron ore spot price rose whilst China iron ore imports have collapsed and the USD is bid.  Overall it looks primed for a major sell off, Yellen's jawbone three months ago would have given us a 60+ rise n the Dow, it went the other way.

So, you would be better at buying USD and selling equities on rallies etc.  For all the bears waiting patiently to short this beast, just the timing...damn f*cking timing.

Tue, 11/13/2012 - 17:32 | Link to Comment slaughterer
slaughterer's picture

Ackman on CNBC defending JCPenney: the CNBC hosts treated him like a dog.  Everybody wants to see swarmy Bill get taken to the shed.  

Tue, 11/13/2012 - 17:35 | Link to Comment fonzannoon
fonzannoon's picture

Geithner jumping in now on the cliff. Tomorrow down huge. You heard it here first. Or not down huge. You heard it here first too.

Tue, 11/13/2012 - 17:35 | Link to Comment fonzannoon
fonzannoon's picture

dup

Tue, 11/13/2012 - 17:38 | Link to Comment azzhatter
azzhatter's picture

Couldn't happen to a bigger prick

Wed, 11/14/2012 - 00:13 | Link to Comment jeff montanye
Tue, 11/13/2012 - 17:40 | Link to Comment adr
adr's picture

Don't worry. Obamaclaus has got your back. If you lose it all in the stock market you'll get an Obamaphone under the tree.

For Hanukkah, everyone who was good will get 10 free days of congressional inside trading information. 

Tue, 11/13/2012 - 17:42 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Nasty day for the Fed.  The CBs have their work cut out for themselves.  If buying toxic asets isn't enough, and rhetoric isn't enough, then what is? 

Is there anyway the Fed and all CBs get the flow of fiat, the volacity of the money supply, up enough to feign investment? 

This will be their onlyoption now.  That or the whole fiat ponzi collapses, and the "science" of economics with it.

Tue, 11/13/2012 - 17:43 | Link to Comment fonzannoon
fonzannoon's picture

Until treasuries start selling off the ponzi goes on. They may have lost the stock market but as long as that money floods to bonds I'm sure they are fine with it.

Tue, 11/13/2012 - 17:50 | Link to Comment Yen Cross
Yen Cross's picture

Strong $ is just global uncertainty Fonz. Thats why P/Ms and commodity metals are moving up with the usd.

 There isn't any faith in the usd, it's just liquid. treasuries are yoked because, everyone perceives a return.

 

Tue, 11/13/2012 - 17:56 | Link to Comment fonzannoon
fonzannoon's picture

Yen is the $ really strong right now? I don't watch FX everyday but it seems like AUD/CAD etc are holding their own. Just my opinion but I think the 10yr could get under 1.5% in the next week.

More interestingly you shorted volatility?

Tue, 11/13/2012 - 18:05 | Link to Comment Yen Cross
Yen Cross's picture

 Dollar is strong in a , "global print fest".  No, $ dollar is the biggest ponzi of them all!

  When every CB is in full print mode, the dollar is a "dollup of shit" that you can hold...

Tue, 11/13/2012 - 17:53 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

So as long as the CBs, who print fiat hand over fist, can continue to do so to purchase the bonds issued by the Treasuries of the Nation-States, then the ponzi will go on?  What happens when counter parties decide to pull out of the scheme, as China and Russia have done via the UST issuance?  Then each of the CBs buy their Treasury debt as the sole buyer.

But then the confedence of the sheel game is gone.  And when the con game is gone, nothing is left.  And when nothing is left, with a ponzi that is backed by nothing, then the game is over.

Please finger where we are on the timeline.

Tue, 11/13/2012 - 17:58 | Link to Comment fonzannoon
fonzannoon's picture

IMO we are in stage 1. That's when the stock market drops dead. Step 2 is when gold breaks free from all this bullshit and runs over 2k like it's nothing. Stage 3 is when someone...China or someone big starts dumping treasuries out in the open. The fed comes running in and buying them and gold goes parabolic. That is the end game. Paper fails at that point.

Tue, 11/13/2012 - 18:42 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

1)  Happened in 2008 when stocks collapsed and the whole shitshow of massive easing started.

2)  Happened in 2009 when gold broke it's nominal highs of $1k and never looked back.

3)  Happened last year when Russia and China began unwinding their UST positions.

Tue, 11/13/2012 - 18:47 | Link to Comment fonzannoon
fonzannoon's picture

If that's true and this is what it looks like after stage 3 I am buying the dip. They have held gold in check and propped stocks up (until now) with the illusion that they still can somehow undo this mess. They have not had bullshit called on them yet. Not yet.

Tue, 11/13/2012 - 17:43 | Link to Comment HaroldWang
HaroldWang's picture

CSCO and probably some positive Cliff comments could spark a big oversold rally tomorrow. 

Tue, 11/13/2012 - 17:46 | Link to Comment Rathmullan
Rathmullan's picture

could of told you that. LaGarde had on the hermes scarf today, not the bvlgari. (how do ya pronounce "bvl" anys how?)

Tue, 11/13/2012 - 17:48 | Link to Comment Venerability
Venerability's picture

Nonsense.

The Market "tumbled," because there's another Auction tomorrow, and the Ninnies just can't summon up the cojones to stop acting by Rote, even when it is so dangerous to be cowardly right now.

ALL PPT's - everybody's PPTs - just need to let Gold, Silver, and Brent escalate for an entire day without impediment - even actively boost them themselves.

Intervene to keep Euro at least flat, try to goose the Loonie and the Rupee and maybe the Nordics and the Peso.

In other words, keep up all the leading indicators for Risk On for an entire session beginning-to-end, and I guarantee everything else will follow.

Otherwise, the "Vigilantes" and the HFTs and outright Organized Crime groups now following them around the Market will squeeze every last drop out of every last day, hoping to precipitate a Flash Crash, their Nirvana.

 

Tue, 11/13/2012 - 17:49 | Link to Comment Overflow-admin
Overflow-admin's picture

Yellen Headlines:

"That was not a joke!"

Tue, 11/13/2012 - 18:21 | Link to Comment DirkDiggler11
DirkDiggler11's picture

This "market" is total BULLSHIT ! It's like watching Terminator 8, the last of the machines battling each other to rape the last human corpse.

Stock Markets- Rigged more ways than Obumma has free phones and govt cheese...

Commodities Markets- Rigged so bad even the mob is envious ....
Oh, and a nice shout out to Mr Dimon and all my friends at JPM - thanks for putting Silver on sale again today, I appreciate the opportunity yet again to keep my stacks growing at an even cheaper price

Wed, 11/14/2012 - 08:44 | Link to Comment Grand Supercycle
Grand Supercycle's picture

WILE E.COYOTE crash update:

When EURUSD hopium finishes, SPX downtrend can resume.

http://trader618.com
http://tinyurl.com/ZH-Forum

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