Trannies Suck Stocks Higher As Risk-Assets Flatline

Tyler Durden's picture

UPDATE: With GOOG and IBM earnings (details below), futures are pushing higher still after-hours

Lowish volume and low average trade size was all that was required to march stocks up to recent highs on the back of more VIX compression and vol term structure steepening. Today was one of the most-disconnected day in a while between equities (and vol) and the rest of the market with the USD practically unchanged, Treasury rates lower, and high-yield credit flat. Commodities pushed higher on the week with Silver outperforming (+1.2%) as Oil broke back above $96 and the Energy sector led stocks along with Utilities (safety?) and Materials. Tech was weak as AAPL plunged early on - only to recover back above VWAP into the close. The Dow Transports have been the corner-piece of this rally as it would appear AAPL's loss is rail-cars and airlines gains. Up 12 of the last 15 days and +19% in the last six weeks, we note the last time this index surged on this scale was in April 2010 (when we saw realized vol for the index also plunge to record lows such as we have now) - and this happened...


 

And the phrase of the year has clearly been - BTFD!!

 

As The Trannies linearly lift and AAPL dumps...

 

With the S&P 500 bumping against the up trend line again and again...

 

The disconnects were remarkable today... this is in ETFs (with VXX and SPY tracking perfectly as HYG and TLT entirely ignoring the risk-on mentality...

 

and the USD disillusion, Treasury bid, Gold sagging into the close was completely ignored by the flow into stocks...

 

which is clearly indicated in the following charts:

 

FX markets were noisy as JPY strength (sell-the-news on a delay to 2014 of open-yended support) and GBP weakness (as King brings the UK into the currency wars) weighed modestly negatively on the USD...

 

and yet another day when the indices led and underlyings did not follow as breadth was very weak...

 

Charts: Bloomberg and Capital Context

 

Bonus Charts: IBM After-hours - filled the $204 gap to mid-October (fading now)

  • Q4 revenue $29.3 bn, vs Exp $29.08 bn
  • Q4 gross margin 51.8%
  • Q4 software revenue +3%
  • Backlog at Dec 31. $140 bn
  • Q4 services revenues -2%
  • Sees 2013 Adj EPS at least $16.7 bn, Exp. $16.64 bn