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...