Algos Take Stocks In A World Of Their Own

Tyler Durden's picture

Reid's sell-off has been entirely retraced by a Boehner-Obama double-act in which they didn't spit, scratch, and gnaw at each other. The algos have it now and so stop-runs in stocks are all that counts. Equities are in a world of their own as they decouple from everything from high yield credit to Treasuries and from oil to the USD. Correlations have dropped as we approach Reid's top - we wonder if reality will sink back in shortly. It would seem, once again, that EURUSD is the most-leveragable vehicle of the day once again... and of course this ramp enabled AAPL to get back to yesterday's VWAP.

Stocks (blue) in world of their own...

 

long-term EURUSD and stocks remain coupled but bonds have left the party...

 

as correlations (lower right) break down across asset classes and equities surge away from credit, rates, commodities, and FX markets...

 

If you are a bull it seems like HYG is better trade here; if bearish fade SPY's exuberance; or play the middle...

and meanwhile in AAPL - we retraced to yesterday's VWAP...

 

Charts: Bloomberg and Capital Context