Equities Fade To Red As Gold, VIX, Bonds Signal Weakness All Day

Tyler Durden's picture


US equities tried to escape the draw of a strong Treasury market and weak gold market all day but kept being dragged back to reality (with a late-day dive on decent volume making the most interesting moment of the day). The day-session range was relatively low but volumes were ok as we leaked lower on the day. NASDAQ was the weakest (thanks to AAPL's push back towards it 'generational low') and TRANS outperformed - but the latter was playing catch up to the rest from yesterday's weakness (still lagging on the week). S&P futures clung to VWAP most of the afternoon in a rather uneventful day even as VIX pushed 0.5 vols higher to close above 17% for the first time in three weeks - notably divergent from stocks. EUR strength (+0.8% this week!), while modestly supportive, has largely decoupled from equity movements this week as correlations across risk assets have dropped notably.

S&P 500 Futures closed back below the 100DMA as they just could not escape the pul of Gold and Treasuries tick for tick moves today...



and broadly speaking equity markets recoupled with one another today... down 0.5% to 0.9%


and VIX is sending signals that fear is growing...


and FX dispersion is high as EURUSD leads the way... (we can only think repatriation flows into the year-end are dominating - as it seems the EUR strength- USD weakness, equity strength correlation has broken)...


and cross-asset class correlations have collapsed...


AAPL was notable today - bleeding all day and following its fade from VWAP game again... down almost 4% from yesterday's highs now.


What was most notable was the huge spike in average trade size (middle pane) - something we saw just recently as we topped out...


Credit moved with stocks all day.


Charts: Bloomberg


Bonus Chart: NFLX +14.5% squeezaplaooza as an unknown price was paid for Disney's content at some point in the future... on the highest volume in over two months!


Bonus Bonus Chart - wondering why EURUSD is holding in? Not an explanation but it seems like European sovereign risk has been 'managed' back to its 'managed' FX risk - as the recent correlation between the two has become very high...

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Tue, 12/04/2012 - 17:28 | 3033578 Al Huxley
Al Huxley's picture

Just a shout-out of thanks to my friends at the bullion banks who coordinated today's sale so I could pick up a few more coins in advance of Basel III on Jan 1, 2013.  Thanks Jamie! (You too, Blythe!)

Tue, 12/04/2012 - 17:36 | 3033597 Confundido
Confundido's picture

Are you sure they are bullion banks? Sounds more like gold paper banks to me...

Tue, 12/04/2012 - 17:38 | 3033601 Karlus
Karlus's picture

From a "mysterious" Asian, to boot.



Tue, 12/04/2012 - 17:46 | 3033621 Al Huxley
Al Huxley's picture

They sell the paper and buy the physical gold.  But since I get the same opportunity to buy the physical at a discount, I really owe them a thank-you for driving the price down.  Of course, come January the sales will most certainly be over, so I'm trying to convert as much as possible now.


BTW dont think for a second that Jamie, Blythe, Warren Buffet, Lloyd, and unnamed and unknown others in the .01% aren't loading up on PMs now, and haven't been for years.  They may be ammoral, but they're not stupid, and they own the system.

Tue, 12/04/2012 - 17:30 | 3033585 The Shootist
The Shootist's picture

Wake me when the interesting shit happens. And I'm not talking about Cairo.

Tue, 12/04/2012 - 17:32 | 3033591 Catullus
Catullus's picture

Wow. Pandora. Short sellers getting desperate. Can we just end AH trading already? We all know it's manipulated beyond reason at this point.

Tue, 12/04/2012 - 17:33 | 3033593 buzzsaw99
buzzsaw99's picture

t-bonds suck, gold rulz. lmao bitchez

Tue, 12/04/2012 - 17:35 | 3033598 Cdad
Cdad's picture

European sovereign risk has been 'managed' back to its 'managed' FX risk

I'm not at all sure what that means...but I did laugh out loud at the thought that Euro Sovereign risk is "managed."  As much so as US T bills are currently reflecting "market rates."

Tue, 12/04/2012 - 17:38 | 3033599 gjp
gjp's picture

The short squeeze machine is the only thing working for Wall Street these days: NFLX, FSLR, CMG, AMZN, these are your leaders.

Tue, 12/04/2012 - 18:17 | 3033692 tawse57
tawse57's picture

I thought NFLX shot up on news of the Disney deal and not because of a short squeeze? I am asking not saying?

I thought NFLX short squeeze was over after that guy announced he had bought a big chunk of shares a month or so back?



Tue, 12/04/2012 - 17:38 | 3033602 Bastiat009
Bastiat009's picture

If gold goes down because of weakness, then it's either time to drop gold, all of it, or the weakness is not that weak.

Tue, 12/04/2012 - 17:43 | 3033611 Karlus
Karlus's picture

I think the logic they are trying to sell is that if we go over fiscal cliff (and debt celing or whatever) then gold will sell off and money moves to the safe haven of "the dollar"


I dont think I buy that. I dont like the drop on Au (I think it should be flying since the presidental "erection") but at the same time, Im not going to freak either.

Tue, 12/04/2012 - 17:42 | 3033607 Boilermaker
Boilermaker's picture

Except for the Russel 2K.  Evidently, that's the new 'battle ground' for the FED.

Why...I don't fucking know.  But, they're pumping the shit out of it for the last week.

Tue, 12/04/2012 - 17:47 | 3033625 the not so migh...
the not so mighty maximiza's picture

If they pump it to much they will wear it out, jeeze don't they know anything.

Tue, 12/04/2012 - 17:51 | 3033636 michiganmaven
michiganmaven's picture

I have noticed the EXACT same thing... it just will not go down.. even today when the ES finishes towards its low (2 points off the days low or so) the TF rallies almost 1% .... far more than any other index... been that way for over a week...ever since Boehners comments about a "deal" that were then recanted the next day... never gave anything back (yet).

Tue, 12/04/2012 - 17:46 | 3033618 Samsonov
Samsonov's picture

Year-end macro themes, all discussed and all understood by visitors here, will maintain consistent down pressure on the market for the remainder of the year at least.  The lethargic action suggests, at least to me, that no major swoon will be forthcoming.  I intend to dip my toes back in when those long-awaited earnings revisions come in, because, long term, Bernanke does have my back.

Tue, 12/04/2012 - 17:48 | 3033627 Al Huxley
Al Huxley's picture

Unless you're in the upper echelons at Wall Street, Bernanke most certainly does not have your back.

Tue, 12/04/2012 - 18:10 | 3033676 Samsonov
Samsonov's picture

Middle echelon here.  What I mean is that he's stabbing the dollar in the back to make it appear that stocks are doing well.  Short of having stacks of gold coins hidden above the bathroom exhaust fan, it's all I can do to maintain purchasing power.

Tue, 12/04/2012 - 18:56 | 3033773 Al Huxley
Al Huxley's picture

Agree, as long as you can dodge the landmines in the equities world.

Tue, 12/04/2012 - 17:54 | 3033643 michiganmaven
michiganmaven's picture

I am not so sure you do not see a big movve to the downside before Jan 1 - hope is pwoerful but so is despair... we are just about all out of hope for a deal in the next week... better get cracking politicians... or do they all suddenly believe that going over the cliff is a "good idea" (as stated by none other than "yee-haw" howard dean himself).

Tue, 12/04/2012 - 17:50 | 3033635 indianajohns04
indianajohns04's picture

What's up with the Dec Vix Futures being so much lower than spot price? Can't catch a break with my gambling addiction to VXX!!

Tue, 12/04/2012 - 18:40 | 3033734 chump666
chump666's picture

Rangy and distorted markets. HFTs are still supporting all MA's on all markets, longs on the  EUR/GBP - which looks perilous.  AUD went bid after central bank (Aust) cut rates.  A strange move on a diminishing yields and fading bond markets (Australia is done once the extent of China deflationary chaos is reveled re: stock market).

Stocks look stretched to f*ck, from Nov lows, Gold looks like a sell on the downside if the DXY is ready to break out (liquidation trade).

ECB is a joke with their EUR support.  I hope inflation takes Europe off the map as the citizens wheel out thousands of guillotines from beneath Paris, and start chopping the heads off of ALL the idiots that have sent Europe further into it's madness.

Thank you.

Tue, 12/04/2012 - 19:19 | 3033809 StoleYourMoney
StoleYourMoney's picture

$VIX getting ready for the cliff after the cliff

Wed, 12/05/2012 - 00:11 | 3034702 MFLTucson
MFLTucson's picture

The Jewish manipulated American fraud in Chicago fucks with PM once again as the confetti from their master is used to steal wealth from others.  (Kitco has the audacity to run a story about an unidentified Asian seller, another piece of American propoganda) This has been their history throughout the world and I do not believe the American people will stand for much more of this tribe of liars and cheats (Blankfied/Dimon), then again, I never thought the American people would be stupid enough to re-elect this clown act.

PS: keep an eye on the good job the Obama team has done in the middle east as Oil will push up  over $200 a barrel and he will again blame Bush and Chris Mathews and Warren (cant tell the truth) Buffett will agree,

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