Vol Dumped; Stocks Pumped; Treasuries... Jumped?

Tyler Durden's picture

S&P 500 futures lurched in a vol-driven mania above their implicit QE3 highs (stop-run) and yay verily there was much rejoicing as cash S&P 500 reached closing levels not seen since December 2007. The only trouble with all this jubilation - Treasuries rallied all day (so no 'Great Rotation'), high-yield credit was having none of it, and AAPL positively hated it (though financials had their best week since the stress tests in March). Average trade size surged as did volume into these highs and as we noted before, the VIX term-structure is now at its steepest in 5 months - as hedgers shift their positions out past the debt-ceiling deadline (and implicitly crush short-term vol spurring the rally further). But, into the close, S&P 500 futures were decidedly skittish as it appeared we ran out of greater fools for a few seconds at the close (via @nanexllc $1.1B worth of $SPY and 25,000 eMinis in last few seconds). Equities pulled away from the rest of risk-assets in the last 30-minute ramp closing the week right at the QE3-day highs, with the USD +1% on the week.

Seems like Volatility and Stocks synced but Rates and credit ain't buying it...


leaving ES at QE3 highs (but plenty of size and blocks up here again)...


With Dow Transports up 6% on the week and the Russell +5.6%...


Even as risk-assets in general did not play along...


and Credit was not playing along at all!!!


Financials look a little ahead of their credit cousins once again here...after the biggest week since Stress Tests...


and AAPL was just hit at every VWAP retrace - ending the day down almost 3%


The USD ended the week 1% higher (with JPY down 2.58%!!)...


Charts: Bloomberg and Capital Context


Bonus Chart: US Financial stocks are now well ahead of their credit-inspired moves (just as they were during the stress test idiocy)...





Bonus Bonus Chart: The last time the S&P 500 futures were this net long was in Q4 2008 - and this is the pattern of the S&P 500 and net long/short that played out...

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whatsinaname's picture

Why so many negative articles on bonds in the MSM ? I figured the Fed would actually prefer lower rates ? Why would banks want higher rates ?

buzzsaw99's picture

tough to sell ir swaps without the requisite fear. tough to make money trading fixed income if everyone sits on their hands. banks make money on the churn. they also like the duration arb play. buy cheaper, flip to the fed. there are a million scams.

GetZeeGold's picture



Push this pile of crap over there.....move that pile of crap over here.



scatterbrains's picture

well for one Wild Bill wants you to sell them while he loads long before the next risk flush.

disabledvet's picture

This is a great point and right up there with "copper as an economic indicator." the theory that "low rates are a problem" when running trillion dollar deficits is so ridiculous it really does bare repeating. OFTEN. Gold WILTED this week...which given the macro view strikes me as beyond odd and in need of..."a calling." To call such price action in gold negative for equities is to give lie to the whole rhetorical endeavor. "From Greater Fool theory to Greater Lie theory" without even bothering to question "why all the stupid impoverished people out there?" No news there is there...

SheepDog-One's picture

Stocks 'full-retard' AGAIN? Naaahhh cant be!

Cdad's picture

Check what happened after hours in futures and on the SPY...you know, after printing that five year high close on the S&P everyone was cheering for.

chubbar's picture

Everyone who would like to tell Congress to lay off the gun ban routine, please follow this link to the "take action" center and there is an already filled out email if you fill in your area code and personal info. Please inundate these assholes trying to circumvent the constitution!


PAWNMAN's picture

Would like to see a chart of the various banks derivatives exposure. How big would that sheet of paper have to be?

W74's picture

It's almost ¾ of a quadrillion.

Last reliable number I saw was 685,000,000,000,000.

World GDP, meanwhile is aprox 72,000,000,000,000. or about 9.5 years worth of dirivatives.

swissaustrian's picture

Silver closing green after beeing down 3%.

Boilermaker's picture

Wow.  Very surprising.  I would have never guessed it.

So...the FED is buying stocks?  I never made the connection.

LongSoupLine's picture

Eat shit Bernanke. Fuck you and your goalseek fucking assholes at FRBNY. Fucking pricks.

LawsofPhysics's picture

There are no "markets", only the moneychangers.  Hedge accordingly.

max2205's picture

To see the manipulation (or 401k $ pouring in) is an amazing sight

scatterbrains's picture

I think the PPT broke their VIX pump tool when stepping back and looking at the over all affect this last desperate act has had on SPX....



Freddie's picture

Where do you think the RUT and SPX are going after this big fake gap up?  Thansk.

scatterbrains's picture

SPX low 1200ies  possible 1150 but it could get real ugly. 

 Instead of polar shifts peeps should be looking for mid east oil shifts out from under the protective blanket of a bankrupt USA to the nuclear protection of Russia or China.  When you look at what BB is doing at it's lowest denominator he's basically calling Saudi/Kuwait/Qatar etc a bunch of pussies.. in so many words he's telling them "blow me you weak little pussies"  I can print money and buy your natural resource with it and you little chumps better like it or else. How long before just one of them threatens to bolt? who knows? Maybe the threat of such a switch behind the scenes puts a gun to his head and forces him to stop the bullshit.  I suppose as long as we can stir up the Sunni / Shiite tensions we can buy time.  Something is going to blow  though, it has to.

Freddie's picture

I could be a stud in that get up.

Evil Charlie Mungo, Warner Buffert's devilish crony, said gold was a barbaric relic that could be sewn into clothes like the Jews did. 

Maybe we will need to do that when NoBama and The Ben Bernank come for our gold.  Charlie said this whilst wearing his glod slippers and wearing his gold Depends.

Sadly i lost my few gold dubloons in a boating accident.

swissaustrian's picture

That's a sign of a gold bubble in India.

q99x2's picture

At this rate the market will be up 236% by the end of this year. End the FED.

swissaustrian's picture

COMEX registered gold inventory at lows not seen since late 2011:


Silver not so impressive...

DowTheorist's picture

GLD is also losing inventories. Normally, contrary to common wisdom, it tends to be bullish for gold and mark an intermediate bottom



DowTheorist's picture

technically the charts have been screaming weakness in bonds well before the FOMC minutes were disclosed. As soon as December 18, bonds became bearish technically:


Furthermore, the BLV (long-term bond term bond ETF) / GLD (gold ETF) ratio is very close to turn bearish, which means stronger gold and weaker bonds.

All in all, the technical picture for bonds is bleak.

orangegeek's picture

NASDAQ100 weekly climbs almost 5% this week.




Raising taxes, and continued government over spending - bullish.