'Technical' Ramplosion Ends With Stocks "Off The Highs" And Credit "At The Lows"

Tyler Durden's picture

Within a few minutes of the day-session open, US equity markets decided today was the day to test the Election highs and QE3-announcement lows. Starting with a little jog, the chatter gathered pace as weak data was dismissed, eyes kept focused on the prize of running the stops above the Election highs leveraging the pre-FOMC 'habit' and hope of a fiscal cliff resolution. This was not to be. VIX was the leverage tool of the day early and led (beta-adjusted) stocks higher until the explosion of volume at the highs with shorts giving up amid a plethora of big blocks suggesting pros selling into that auctioned strength. The straw to break the rally-camel's back was Harry Reid's comments and sure enough we rotated all the way back down to the day-session open's levels. While all this excitement was occurring, risk-assets twiddled their thumbs in general, snickering the impetuous youth of the exuberant equity market and the pundits admiration that 'well, the market knows that a deal will be done'. Into the close, S&P futures ramped up to VWAP settling their at the day-session - only to extend a little after the close.

 

Quite a day in S&P 500 futures...

 

Vol was the leverage, high yield credit the reality and stocks swung from euphoria to reality on and off in the afternoon...

 

Across broad risk assets - this equity dislocation was very obvious...


 

It made some sort of 'technical' sense that we would auction up and retest these levels but the professional activity up here (signaled by the blue bars h/t@eminiwatch) tend to suggest this was not a start but an end of a run...

 

Treasury yields pushed higher on the day but chopped around with stocks in the afternoon.

 

Commodities saw early weakness flatten out, Oil recouple with Silver on the week and then Gold and Silver limp higher all day... Gold/Silver?Copper all closed red on the day

 

By the close of S&P 500 futures, the market had crept back up towards the highs of the day in a stealthy VIX-crushing way - as the volatility index ended the day -0.5 vols at 15.57% (its lowest in December).

 

AAPL had a good day - but closed well off the highs - pulling back to VWAP by the close.

Charts: Bloomberg and Capital Context

 

Bonus Chart: Ridiculous Closing ramp with perfect DEJA VU from yesterday in terms of volume, average trade size, and performance... last few minutes of yesterday and today...