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Volatility Hammered As Stocks And Bond Yields Close At Highs

Tyler Durden's picture




 

For anyone watching the last hour or two of today's market, there was plenty to entertain. VXX (the implied vol ETF) collapsed in a haze of glory dragging stocks to the highs of the day with financials seeing their best day in three months. Treasury yields, Gold, and Stocks have all recoupled from the election and perhaps that is what this bond weakness is related to (as for example LQD fell to 3 month lows today, while HYG remains close to record highs). Stocks closed at Thursday's highs amid heavy and large size trades - the vertical rampathon (or inverse Baumgartnering) suggests a quiet market desparate to auction to stops. The USD ended unch, as did Gold while 30Y added 8bps as testicular fortitude appeared under pressure today. Perhaps Citi should downgrade AAPL every day? Today's #Teppergasm (h/t @gubbmintcheese) saw the NASDAQ back to unchanged for December and Citi up a measly 13.3%.

The S&P 500 futures were relatively entertaining today - kissing VWAP twice before accelerating 10 points in the afternoon to close at the highs...

and what that rampalicious liftathon looked like up close and personal - two words - Linear Awesomeness...

 

which leaves S&P futures at a key crossroads...

 

For the month of December, today's ripfest dragged the NASDAQ back to unch as Trannies lead...

 

Stocks, Bonds, and Gold all recoupled post-election...

 

Today was crazy in the afternoon - after being well correlated early, volatility was crushed and managed to drag stocks (and High Yield) higher into the close...

 

Financials had their best day in three months - in celebration of Dick Bove's resignation we assume...

 

Charts: Bloomberg

 

Bonus Chart: Financials In December... Citi +13.3%... awesome...

 

Bonus Bonus Chart: HYG vs Fair-Value divergence - seen that before last week, didn't end well...


 

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Mon, 12/17/2012 - 17:33 | 3072611 Dr Paul Krugman
Dr Paul Krugman's picture

My AAPL position is still looking good.  The recent rise in the market is evidence that we have found a growth trajectory we charted many years ago, after the '08 market failure.  Consumers are stimulating sectors of the economy, yet not all is well.  Now that Bernanke and the Fed understand they can not do anything stupid like the ECB and raise rates they should do more and add more stimulus to their books.  It is not enough to end this depression.  We must end it now!

Mon, 12/17/2012 - 17:46 | 3072731 LawsofPhysics
LawsofPhysics's picture

Yes please, my commodites portfolio has had a banner year.  Bring it!!!

Mon, 12/17/2012 - 19:01 | 3072981 adr
adr's picture

Who up-voted the nonsensical drivel. Growth trajectory?

Please the only consumers spending are the top 15% who saw their already outrageous net worth explode thanks to Bernanke, and the bottom who saw their pockets overflow with welfare dollars thank to Obama.

Great way to grow an economy through hard work, huh Krugman.

Or should we all just take welfare and invest it in the stock market for the full on ponzi circle jerk. I should quit my productive job and go on welfare. Then I can take every welfare dollar and invest it in Apple. After seeing the 200% annualized returns, I can sell 20% of my portfolio every month to pay for anything I wish to buy. Nobody will actually need to work in America, everything will be produced overseas and we can buy everything on Amazon, that can ship from Mexico using robots instead of humans to deliver the packages. Why burden anyone with actual work.

OH HOW GLORIOUS EVERYTHING WILL BE!!!!!!

 

Mon, 12/17/2012 - 21:14 | 3073352 knukles
knukles's picture

Lotta trolls and paid for shills from the perceptions management factory.  Up-vote him enough and the rest of the place leaves in disgust, another alternative forum effectively shuttered.

Mon, 12/17/2012 - 19:32 | 3073068 malikai
malikai's picture

Not that it matters to you, Dr. but others may be informed by viewing the comments in this link.

https://itunes.apple.com/gb/app/os-x-mountain-lion/id537386512?ls=1&mt=12

Mon, 12/17/2012 - 20:10 | 3073171 ball-and-chain
ball-and-chain's picture

I keep waiting for the collapse.

I have to hand it to the neo-liberals.

They've got the balls in the air like expert jugglers.

Their model seems to be turning America into the new Japan.

Death by slow cuts.

http://www.angrysinner.blogspot.kr/2012/12/yesterday-i-hiked-ten-miles-through_17.html

Tue, 12/18/2012 - 05:16 | 3074097 dogfish
dogfish's picture

The new MDB.

Mon, 12/17/2012 - 17:17 | 3072613 jeff314
jeff314's picture

they have to kill volatility or if it flies the market will crash...

Mon, 12/17/2012 - 17:19 | 3072621 Gmacks
Gmacks's picture

And the bond bubble goes......pop!

Mon, 12/17/2012 - 17:39 | 3072702 THX 1178
THX 1178's picture

I hope so. I seriously caint wait.

Mon, 12/17/2012 - 19:23 | 3073033 WhiteNight123129
WhiteNight123129's picture

It is not popping yet, a great time to add more shorts would be if some really nasty development occur in Europe, then massive knee jerk rally in Treasuries, at that point you can short copiously.

The bond market has another 5 years before US goes bankrupt. It will be interesting and a protracted fight back and forth, it will be exhausting for sure.

 

Tue, 12/18/2012 - 00:20 | 3073799 Gmacks
Gmacks's picture

There is no way the bond market will continue like this for another 5 years. It wouldn't be a bubble if so. I agree this could be a head fake but I'd give it 2-3 years max.

Mon, 12/17/2012 - 17:20 | 3072623 DavidC
DavidC's picture

Can someone explain that please?

DavidC

Mon, 12/17/2012 - 17:21 | 3072629 101 years and c...
101 years and counting's picture

VIX opex tomorrow.  this happens every month.  3 days prior to OPEX, short UVXY or buy XIV.  this should have started on Friday but TPTB couldnt begin their normal friday rampathon as 20 children were slain.  really quite disgusting, but this is what you should expect from Wall St.

Mon, 12/17/2012 - 17:50 | 3072745 DavidC
DavidC's picture

So tail wagging dog again?

DavidC

Mon, 12/17/2012 - 17:24 | 3072632 buzzsaw99
buzzsaw99's picture

gold is algo driven just like stocks. good luck suckers!

Mon, 12/17/2012 - 17:24 | 3072636 GernB
GernB's picture

So we're back to "all the same market?"

Mon, 12/17/2012 - 17:26 | 3072638 WhiteNight123129
WhiteNight123129's picture

Testicular fortitude, you need a lot to short the treasuries, but if you can endure pain you win. Time to play cat and mouse with the treasuries soon and tactically cover a bit if further weakness continues before the Fed comes back to torture the bond vigilantes. But the resistants always win, some die along the way if they are too aggressive and do not run up the hills for cover after a small guerilla win. But the movement wins. Bernanke can not win, his bonds are junk securities and he knows it, the guerilla fight with the Treasuries is far from over. It will be an epic battle, but the treasuries will be bankrupted unless Congress and the Fed have a Ron Paul epiphany.... For now it is fight club.

 

 

 

Mon, 12/17/2012 - 17:27 | 3072651 buzzsaw99
buzzsaw99's picture

lulz

Mon, 12/17/2012 - 17:39 | 3072695 WhiteNight123129
WhiteNight123129's picture

for now it is small lulz, one day it will be a giant satanic LULZ after another 7 years battle, and the one who will have survived the many raids from teh Fed while figuring out the counterparty risks in that trade and the way to by-pass an eventual short on treasuries (yes there is a way to bypass an eventual ban on short treasuries) will keep laughing until they get internatlized in a Sanatorium....

 

 

Mon, 12/17/2012 - 17:40 | 3072699 ptoemmes
ptoemmes's picture

I love the smell of burning bonds in the morning.

 

It smells like...victory.

 

Some day this bond war is going to end.

 

http://www.youtube.com/watch?v=bPXVGQnJm0w

Mon, 12/17/2012 - 17:29 | 3072661 gjp
gjp's picture

Another outrageous day.  Go home have a drink get ready for the next one when you wake up.  Markets are marching to PTB orders, don't get in the way.

Mon, 12/17/2012 - 17:31 | 3072669 Winston Churchill
Winston Churchill's picture

I'm getting the impression that Zimbabwe Ben and the PPT has lost it.

Mon, 12/17/2012 - 17:36 | 3072685 LouisDega
LouisDega's picture

Where is my financial advisor Robo? He or she is late

Mon, 12/17/2012 - 17:41 | 3072709 lemarche
lemarche's picture

Yeah it seems that a QEX every 3 months does stimulate a bit the stock market in the end... no matter how much less so the economy... let s see if that rally on thin air this afternoon will hold tmrw...

Mon, 12/17/2012 - 17:44 | 3072724 Godisanhftbot
Godisanhftbot's picture

 The only sellers were Peter.

Mon, 12/17/2012 - 17:44 | 3072726 bnbdnb
bnbdnb's picture

CITI = the new GS

Mon, 12/17/2012 - 17:45 | 3072729 slaughterer
slaughterer's picture

DO NOT SHORT UNTIL AFTER THE "JOINT ANNOUNCEMENT" OF THE EXTENSION OF THE MIDDLE CLASS TAX CUTS.  

EOM. 

Mon, 12/17/2012 - 18:34 | 3072904 Squid Vicious
Squid Vicious's picture

not sure about that, my call is these whores are gonna drive us off the "cliff" then rush back to that hellhole on the Potomac in January to "save" us ... just a question of when the "market" realizes this and takes the obligatory dive, enhancing the saving us "MEME" in early 2013

Mon, 12/17/2012 - 17:52 | 3072752 NaiLib
NaiLib's picture

It's BONUS Time folks!! With maginal buyings we can get our 20% of this years profits. :):)

Mon, 12/17/2012 - 17:56 | 3072763 SheepDog-One
SheepDog-One's picture

Bernank Clownbux liftin all boats, but for how long?

Mon, 12/17/2012 - 18:03 | 3072792 otto skorzeny
otto skorzeny's picture

BAC has got rid of all the shit on their books-BUY! BUY! BUY!

Mon, 12/17/2012 - 18:12 | 3072820 Squid Vicious
Squid Vicious's picture

where the f is robotarder... it's not a real rally unless he chimes in with some bullish nonsense

Mon, 12/17/2012 - 18:27 | 3072888 LawsofPhysics
LawsofPhysics's picture

He is a rear view prognosticator, he'll be here tomorrow to predict today's rally, don't worry.

Mon, 12/17/2012 - 18:33 | 3072905 bullet
bullet's picture

robo is working a double shift at McDonalds today...

Mon, 12/17/2012 - 18:28 | 3072886 Market Efficien...
Market Efficiency Romantic's picture

Tyler, with the somewhat specific lingo, you do a pretty good job of running under the NLP radar. Not that this what intended...

Mon, 12/17/2012 - 19:20 | 3073031 1fortheroad
1fortheroad's picture

And the futures run 3 handles richer? WTF

 

Mon, 12/17/2012 - 19:44 | 3073108 Squid Vicious
Squid Vicious's picture

may I ask who exactly is "richer" from the "market" priced in matzoh-confetti $ going higher?

Mon, 12/17/2012 - 19:44 | 3073117 Abednego
Abednego's picture

Do not try to predict this market - were we to value stocks based on reality what fun would that be....? When we find out that our last hero was doping it is not hard to convince me that everyone else is lying too - bout time to wak up and realize that as long as we keep doping the balance sheet we will keep winning races and the markets will never do what they are supposed to.... just the facts....

Mon, 12/17/2012 - 20:24 | 3073211 chump666
chump666's picture

volatility smashing HFTs

gotta be the next major crisis in 2013, it's unreal what they are capable of. 

IT brainacs trying to fudge the stock market.  Wow, tech sector is going down the toilet and yet we have HFTs running all the averages sucking in Wall Street longs.

Mon, 12/17/2012 - 20:46 | 3073264 luna_man
luna_man's picture

 

 

Don't sweat it!...That's ben's job!

 

It's a "short" all the way down

Mon, 12/17/2012 - 23:23 | 3073664 SmoothCoolSmoke
SmoothCoolSmoke's picture

W. T. F.   That is all.

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