Another Day, Another Equity Divergence

Tyler Durden's picture

It would seem that the only 'asset' that finds the weak macro data this morning and deterioration in European sovereigns as a signal for risk-on is US Equities. While early on VIX gapped higher, it has recoupled in a compress-a-thon dragging stocks to the highs of the day as the USD drifts sideways and Treasuries are bid. Whether equity index strength is the long-AAPL hedgers unwinding (as AAPL is down 2% from its opening levels and sub-$500 once again), we can only stare in amusement at the low-volume liftathon that is exciting all around (especially the energy sector as oil hits 4-month highs).

Cross-asset divergence...


and across the ETFs... VIX is holding it all up..


Aggregating the risk-assets (right) and ETFs (left) we see stocks in a world of their own since right before the European close...

Another low-volume stop-run? or this time it's different...

Charts: Bloomberg and Capital Context

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Gypsyducks's picture

Banksters massaging their long Feb. crude position for the 2:30 future expiration....

Divided States of America's picture

Obummer mentioned that stock markets are at 5 yr highs in his speech. Guess he thinks that is a barometer of his success as a president. What a douche.

Dr. Richard Head's picture

If only the pucking fublic would understand nominal vs. real. 

FL_Conservative's picture

They might if you put it in terms of American Idol.

Boris Alatovkrap's picture

Screw is Amerika Idol! Billy Idol is Rocks!

withnmeans's picture

A little off subject, I was reading the article in Bloomberg news, about how the housing market sales were down. Of course they have to have a B.S. "fixer" saying it is because of the lack of housing on the Market "typical of Bloomberg to make this assessment".

I know most all of the ZHers drive cars and have eyes, we all notice that there are more houses for sale then ever as you can drive down about any street and see at least one or two houses for sale. Also if you take a look at any realtor's ad, they have a common theme as well "PRICE REDUCED". Then if you go as far as checking the listing and comparing it to the Court House tax roll, Hmm, it comes out less then what it is valued for.

Furthermore, I find it very hard to believe that Housing starts far outweigh the birthrate. Our population here in the states grows by about 220,000 per month, yet housing starts are from 600,000 to 900,000 units per month.

Now I find that approx 220,000 people needs to be cut in half to make a family "man, woman, make couple". Now of this 110,000 couples "of which maybe 50% of them even build a house", cannot make 600,000 to 900,000 housing starts "PER MONTH"

Brokenbroker's picture

Dont have the exact figures in front of me but thought i would help. The actual number per month have been about 60k per month. The basically multiply by 12 to get seasonal ANNUALY adjusted numbers . Which means in the winter when houses are not usually started they multiply by more than 12 and in the spring when most houses are started they multiply by less than 12. What they add in the winter they have to remove throughout the year. Watch how bad the spring is. Building has been horrible in everywhere but the warm states and the seSonal adjusmtn was way too much in the past couple months and so the give back will be huge in the march and april months. It actually has been improving but that was a bounce and over this year it will not continue to improve but will flatline or dip again. But it isnt 900k permonth it is simply like 60k times (12) x sa (1.25) and in spring x 12 and .75. Hope that helps. Housing has done better but it is super fragile and When then recession gets serious this year it will rollover a bit and god (ben) forbid interest rates rise!

Jake88's picture

happy days are here again whoopee! It is good to be president.

Say What Again's picture

I'm tracking the Avg Trade Size on the ES at the 1 minute level right now.  There is an interesting pattern of HIGH volume coupled with SMALL Avg Trade Size, followed by LOW volume coupled with LARGE Avg Trade Size.  Also, the peak volume bars have each had less volume.  This is all happening just as the ES reaches its "X Week/Month/Year all-time high."

Don't know what this means right now, but wanted to throw it out to the group for comment.

slaughterer's picture

It is all perfectly set up for AAPL earnings to take ES above 1500.

Jake88's picture

or trigger the correction

francis_sawyer's picture

 "As goes January ~ so goes the year"... Wait for that tired old meme to start trolling out in 5...4...3...2...

jubber's picture

Every index in the world was down this morning  UK time, the DAX has been trying to sell of now for two weeks only to ne dragged back up everyday by the US insane market.

FL_Conservative's picture

Where else are all those excess reserves going to go? 


BTW, FUCK YOU Obama, Bernanke and Mary Shapiro..

Cdad's picture

Mark it...this sick puppy is about to roll over hard.  Already started, in fact.  

At some point, you would think "the market" would like to seek out some remnant of its former credibility.  You'd think...

SheepDog-One's picture

I'd think so, but all kinds of weird things happen in Fantasy Land.

SmoothCoolSmoke's picture

10: 30 ramp today....right on the dot.

Village Smithy's picture

"Takin' a pretty big lead-off now, almost darin' him to try and pick him off". This is all the result of the TBTF moral hazard situation. These pigs know they cannot lose. Keep pushing in more chips (aka free Fed dollars) knowing you either get out with a big win or you just phone Ben and get a bailout if you were too slow and greedy. In the meantime we pay when the crash comes and economic termoil ensues. This is so fucked.

Jason T's picture

per Martin Armstrong on the 17th referring to the Dow..

The Daily Bearish Reversals at 1330955, 1329335, 1312900, and 1309480. The key days ahead will be 01/23 with high volatility starting 01/24.


If tomorrow is a down day and Thursday is a big down day..

FL_Conservative's picture

Is he related to Louis Armstrong?  Because this doesn't seem like a wonderful world.

market le pew's picture

No, to Lance Armstrong. He must be high on something, Markets don't go down any more.

Dr. Richard Head's picture

I see dollars of green....from the printer they flew

Primary dealers.....scream fuck you

And I think to myself.....what a fucked up world.

GernB's picture

Nice. Now that song is stuck in my head. Thanks.

monopoly's picture

It truly is amazing but shorting this market has been suicide. Spoos 1500, here we come. As we print more and more where is the phony paper going to find a home? Right here. But for me, you can have AMZN I will stay with physical gold, silver and good miners. 

No shorts.

Village Smithy's picture

It's only profit if you sell and you can be sure these guys aren't in it for the dividends. The TBTF are all in for the same reason, to participate in the fed sposored ramp-a-thon. When that reason ceases to exist they will be all out all at the same time and then look out below. Sorry pension muppets, sorry mutual fund muppets, sorry taxpayer muppets.

GernB's picture

This is the only analysis you need.

Gypsyducks's picture

If you can't beat 'em join 'em?

market le pew's picture

Can someone wake me up please when there's something new? It's the same story Monday to Friday.

Never One Roach's picture

Is there any way we can force those rates even lower?

electricgorilla's picture

The Fed is now playing a real scary game trying to suppress volatility to pump up the market. This coiled spring of volatility is going to erupt soon. This little game is near its end in my opinion. Just when everyone threw in the towel and believed the fed can keep its hands on the wheel and control this market....the car hits ice and we spin out of control...

GernB's picture

The market is just waiting for that one guy who says "hey look the emporer has no cloths."

Jake88's picture

sure... but when? tomorrow? next month? next year?

SheepDog-One's picture

Only about 3% more and we blast thru the last ridiculous bubble top equity market levels! Wheee!!

The worst trader's picture

Suprised the spender n chief didn't say " its a good time to buy a house"

spanish inquisition's picture

Looks like someone has programmed an algo where the cost of diverging a low volume market is less than the profits of being positioned to reconverge. 

thismarketisrigged's picture

lol at this ''market''. what  a fucking joke.


home sales down, richmond fed at worst level in years? no problem, market is green and will prob just get greener towards the close.


even a stock like caterpillar, which had as bad of news over the weekend as possible, rather than being down 3-4 percent at least, its pretty much flat. vz misses earnings badly, dnt worry, thats good for a green day.


we can all just wait for that time when the market finally comes to reality and it tanks so fast that all these bankers will lose there money like in 08, but hopefully this time no one will bail them out.


o and fuck you obama you fucking piece of shit, you are the worst thing to happen to this once great country. you make jimmy carter look like abe lincoln, and fuck you bernanke, just keep printing and taking away what was once a real stock market.

Arbman's picture

Could someone please tell me what the ticker symbols are for the first chart?


I don't see the point of posting those charts always that small and in such a bad resolution quality.


It's the same with the charts here:

You cam't read "CESIUSD" on those pictures. Bloomberg doesn't offer free CESIUSD-data any more. Can someone provide a source for free Citigroup Economic Surprise Index data?

Or does every reader of zerohedge have a personal Bloomberg terminal for 20k USD per year?


Another question: (just in case anyone really answers my post, what I actually doubt but let's give it a try. One never knows.)

How is that SPY ARB - Model calculated?

Is it really just a regression of VIX TLT and HYG against SPY?

I mean how do You decide what starting point of time to take to make plots like that above?

It really heavily depends on the starting point of time how the resulting chart would look.


Any sensible answers would be greatly appreciated.

joego1's picture

I don't completely understand all of this other than then fact that it bites really hard sometimes.

Arbman's picture

I tried to plot the second chart:

I used 1-minute data available at google finance but I get a slightly different result:


That plot could easily look totally different if I just took another starting point of the plot. For instance if I took not 15:40 (CET) but 15:30 (CET) it would already look totally different.

So what's the point in comparing those indices in such a way?

Arbman's picture


Why the hell do I see my plots in the preview but there are no images in the final comment?

What is this shit?