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Stocks Jump Most In 5 Months But Bonds Ain't Buying It (Again)

Tyler Durden's picture





 

Best day in 5 months for stocks. AAPL jumping to one-week highs with its 2nd biggest low to high swing in 3 years. Wherever you look, the worst came first and so the talking heads re-appeared saying the worst is over and all is rainbows, unicorns, and mountains are once again molehills. Unfortunately, while ETFs were smashed higher (HYG biggest move in a year on 2nd largest volume ever back above its 200DMA, VXX crushed -9%), risk assets broadly speaking were not playing along with Treasuries especially drifting lower in yield from the European close (and EURUSD) as stocks surged to the highs of the day. Commodities soared with Oil leading the way - though post-Europe everything flattened and leaked lower. VIX collapsed 1.2vols to end just above 15% (notably ahead of stocks relatively speaking) but equity volume on the day was dismally low as S&P 500 futures broke back above the 200DMA amid larger than average trade size.

 

Bonds weren't buying the bullishness in stocks and EURUSD...

 

More broadly, while commodities soared (with Oil squeezing hugely higher)...

 

... across FX, precious metals, rates, and spreads, equity performance was uber-exuberant...

 

The last time we saw a trend divergence between HYG and its intrinsics (early September), we saw a very significant correction between the underlying and the ETF which then rapidly reverted the next day (see bullish green oval to blue oval compared to bearish red oval to blue oval). So now tomorrow we might see HY bonds bid (like CDX today) and selling (arb) in the HYG ETF itself to narrow the gap...

The HYG volume today was enormous - 2nd highest ever. The collapse in CDX spreads and this move in HYG seem massively overdone given the total and utter void of news - is this echoes of last Thanksgiving week?

Lots of 'technical' looking moves today: ES over 200DMA, HYG over 200DMA, AAPL to critical VWAP, WTI to 50DMA, EUR to 200DMA 1.28 figure...

 

This had the feel of great desparation to us - the moves too huge to be justified by any event (Greece, Fiscal Cliff, whatever - as everyone knows there is no solution in the short-term). Front-running Bernanke? Don't think so - MBS and TSYs not moving much. We somewhat jokingly comment on the hedge funds all crying out in pain at AAPL's demise - well we wonder whether this well-orchestrated massive-scale liftathon (in every direct correlated asset possible - EURUSD, HYG, Vol?) was all about enabling exits...

 

No news and no volume, it would appear, is good news for stocks.

 

Charts: Bloomberg and Capital Context


Bonus Chart: A thought about what we just did... just as we auctioned back up to Bernanke's bottom after breaking down, so this rampfest appears to be nothing but an auction to test for any follow through up to Draghi's Derriere...


 


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Mon, 11/19/2012 - 17:15 | Link to Comment Boilermaker
Boilermaker's picture

Fuck yea!

All that stuff!

Mon, 11/19/2012 - 17:18 | Link to Comment 1100-TACTICAL-12
1100-TACTICAL-12's picture

OT: could one of you stock guru's look @ the chart for (MJNA) and let me know what you think ? I bought this shit for almost nothing awile back is it ever going to do anything? TIA...

Mon, 11/19/2012 - 17:24 | Link to Comment LongSoupLine
LongSoupLine's picture

"I bought this shit..."

 

 

I do believe you just just did your own analysis.

 

sell paper, buy silver.

Mon, 11/19/2012 - 17:32 | Link to Comment ZDRuX
ZDRuX's picture

It looks like your stock is getting near a long term top, I would get out here if you could and get what you can for it. There's no action in this stock, you won't get any movement here anytime soon.

Mon, 11/19/2012 - 17:22 | Link to Comment ekm
ekm's picture

You guys have to understand that in a Pyramid Scheme when ONE ENTITY like Fed + Primary Dealers own everything and nobody else wants to buy that stuff from them, there is only one option: FORCED BUYING otherwise they all collapse as one entity.

 

In these circumstances, they have only two options:

1) Keep buying until no money left to buy or no stocks left for trading (we're close to that point)

2) Collapse 1 or 2 primary dealers to crash the market at the point where buying and selling will occur.

Remember:

- JPM swallowed Bear Stearns

- Barclays swallowed Lehman

- JPM swallowed MFG

Simple, big fish eats small fish, they still remain ONE ENTITY WITH LESS MEMBERS. It's called: MARKET CRATERING

Mon, 11/19/2012 - 17:35 | Link to Comment redpill
redpill's picture

Yeah but are you glad you called Blanchard?

Mon, 11/19/2012 - 18:55 | Link to Comment ekm
ekm's picture

???

 

Mon, 11/19/2012 - 17:20 | Link to Comment LongSoupLine
LongSoupLine's picture

Just another day for the algos to play on a pile of Bernank's funny money.

 

 

fucking retarded.

Mon, 11/19/2012 - 23:37 | Link to Comment juliawong
juliawong's picture

Funny money indeed. I wonder when they say, "Gold is king's money, silver is gentleman's money, barter is peasant's money and debt slave's money." Should they add, "Funny money is banker's money."

You know, just to update things a little.

Mon, 11/19/2012 - 17:21 | Link to Comment resurger
resurger's picture

I was shopping around the tickers, the Volume was REALLY! RAELLY Amazing for 2% jump!

IF someone does not belive that the HFT's are driving the ponzi now, when will they believe?

Mon, 11/19/2012 - 17:22 | Link to Comment kaa1016
kaa1016's picture

This is the perfect environment for a move like we have seen since the European close on Friday. I think they gun the market higher until Wednesday morning, if not through half day Friday. Just listen to all of the rhetoric regarding the fiscal cliff and the Mid East. They will do whatever they have to do to crush as many shorts as they can in a light volume week. We've seen this movie before...

Mon, 11/19/2012 - 17:27 | Link to Comment slaughterer
slaughterer's picture

We closed above ES 200DMA effortlessly.  AAPL trading off of Gundlach's positive comments on CNBC.  He set a ceiling of $575.  

Mon, 11/19/2012 - 17:30 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

I think Bernanke is scared shit-less the Black Friday will be a total dud. He's trying to bouy consumers spiriits with this ramp job.  If BF reviews are crappy....look out below the following Monday.

Mon, 11/19/2012 - 17:30 | Link to Comment I am more equal...
I am more equal than others's picture

Timmy says infinity, then it is infinity and beyond for everything.  No one dies.  Eveyone is a billionaire. 

Mon, 11/19/2012 - 17:31 | Link to Comment Yen Cross
Yen Cross's picture

 The usd/jpy wasn't buying the malarky today either. It KO'ed that 81.50 barrier yesterday then just retraced, and sat on it's ass...

Mon, 11/19/2012 - 17:34 | Link to Comment steve from virginia
steve from virginia's picture

 

Dow is still below 13,000.

 

Gold isn't buying 'it', either (+1,730).

 

More and more fraud ...

Mon, 11/19/2012 - 17:48 | Link to Comment disabledvet
disabledvet's picture

When have bonds and equities ever been "coupled" in this surge? The word "never"'comes to mind. Eventually you might be right...but when that "hi tech play Home Depot" surges over 100% in less than a year I say the Fed is unleashing a wave of infl....er, PRICING POWER. Obviously there is nothing holding back further stimulus. The Spendocrats have already said there will be no "sequestration." there is war of course...another favorite left wing enterprise. Obviously Israel is on the warpath...which will lead to greater regional conflict than already exists in my view. Frankly I think we're running out of do-overs here. All the pro's left this schtick years ago...if you stayed with it you got shit canned anyways. To top it off the totality of New York City is in need of rebuilding. That downpament isn't 35 billion but 350 billion in my book. That should be GREAT for pricing.

Mon, 11/19/2012 - 17:40 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Fed was buying in force today.  Bernanke knows that if he loses the stock market, the whole system comes crashing down.

Mon, 11/19/2012 - 18:17 | Link to Comment ebworthen
ebworthen's picture

Bernanke Bucks:  free and plentiful.

Accounting?  What's that?

Ctrl + P Bitchez!

Mon, 11/19/2012 - 17:49 | Link to Comment FuzzyDunlop21
FuzzyDunlop21's picture

Should only take 3 weeks to fade this bullshit

Mon, 11/19/2012 - 17:53 | Link to Comment q99x2
q99x2's picture

TZA tomorrow.

Mon, 11/19/2012 - 18:01 | Link to Comment fonzannoon
fonzannoon's picture

I scan some other sites where the retail sheep gather and discuss stawks. From the look of it they are all over this rally. Buying with both hands.

Mon, 11/19/2012 - 18:01 | Link to Comment ebworthen
ebworthen's picture

What a bunch of cotton candy.

Good time to sell because YOU KNOW they are going to raise capital gains taxes.

Mon, 11/19/2012 - 18:04 | Link to Comment Mark Wilson
Mark Wilson's picture

Umm, S&P 1200 is the other way. Bwaaahaha!

Mon, 11/19/2012 - 18:11 | Link to Comment chump666
chump666's picture

Big deal, selling on the DXY, flat UST trades.  This was coming and it is a nothing move on terrible volume, it is worth catching these snapback rallies, but still, even with the VIX scraping lows. No bull run here.  The fiscal cliff is nothing to worry about.  The idiots in congress are fools so they will bang out some 50/50 deal.  What will tear this market a new a-hole is war in the middle east, once Syria/Egypt and Iran create three fronts for Israel.  Therefor making the excuse that paranoid Israel always wanted to do -  bomb Iran, bringing in the US, and Iran bring in China/Russia.  Nasty beyond nasty.

Meantime...

Mon, 11/19/2012 - 18:17 | Link to Comment chump666
chump666's picture

...oil inflation/tax.

 

Mon, 11/19/2012 - 18:15 | Link to Comment e-man
e-man's picture

Surely AAPL is more important than the bond market, right?

/sarc

Mon, 11/19/2012 - 18:51 | Link to Comment sbenard
sbenard's picture

My ES tick charts today demonstrated the weakest volume I've ever seen. Thanks for pointing this out in this article!

Something diabolical is afoot!

Mon, 11/19/2012 - 20:12 | Link to Comment Shizzmoney
Shizzmoney's picture

Holiday rally (Black Friday donks).

This shit will REALLY start by January, after the holiday bullshit felt finally settles and blows away.  The 2013 unemployment numbers will NOT be pretty.

Mon, 11/19/2012 - 23:36 | Link to Comment juliawong
juliawong's picture

Double comment deleted.

 

Sun, 11/25/2012 - 07:21 | Link to Comment wandybrad
wandybrad's picture

nions are hardly the problem. The problem is they changed their product and it sux. Not to mention charging 2 times as much as their competitors for an inferior product.
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