Geithner's Farewell Present: Gold Slammed, S&P Over 1,500 On Best January In Stocks Since 1994

Tyler Durden's picture

A close above 1500, and the last time the S&P 500 managed 8 close-to-close gains in a row was November 2004 (with the 9th higher close marking the end of the run that time). The rise of the Dow Industrials is the best January since 1994 - which saw a rather painful 10% decline in Febuary. Today saw bonds monkey-hammered to catch up (yields) to equity's strength on the week. FX markets saw more JPY weakness (-1% on the week) as EUR strength from this morning's LTRO news followed on - dragging the USD down 0.3% on the week. Commodities were mixed with Oil unch on the week, Copper down (but global growth?), and Gold and Silver slammed on what looks like AAPL collateral calls. AAPL spent the day wiggling up to VWAP and getting dumped to new 52-week lows unable to get any bid and once again we saw VIX totally ignoring the equity exuberance. Builders outperformed (+3.2%), Tech underperformed (-0.4%), as trade-size and volume were relatively low. The close with AAPL smashing lower on huge volume and ES ripping to new highs confirms the pairs-trade unwind we have been banging on about.

Best January for the Dow in 19 years...but the follow-through was not so fun...


Leaving US equities the winner across broad asset-classes from the 12/28 pre-fiscal-cliff decision... USD and Gold practically unch and Silver just losing its winning spot...


AAPL was smashed into the close...


AAPL's last three minutes saw 2.2mm shares (and 133k contracts in ES) as the bulk of the trade was done at $439.90...


S&P 500 futures waivered around VWAP once again - as once again we see the trend from the US open to European close revert as POMO finished... and the late-day smash higher in ES is simply the antithesis of the AAPL sell-off as the dominance of the long-AAPL, short-ES pair is unwound en masse...



Perhaps a little clearer here...


VIX remains notably disconnected from stocks since before the AAPL earnings news...


Today's move in Treasuries was a total collapse catch-up (in yields) to equity strength on the week...


The JPY has lost 3.4% in 2 days against the USD - quite an impressive swing relatively. EUR rallied on bigger LTRO repayment this morning which given its weight dragged the USD lower and provided some early juice for risk assets...


Even though the USD only lost 0.3% on the week, Copper doubled that loss (as opposed to relatively strengthening) and Gold and Silver were slammed...


As a reminder - things are diverging!!!! US Macro just turned negative - its worst level in five months...


Charts: Bloomberg and Capital Context

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Just Ice's picture

I don't need to check the primary dealer's list.  JPM, Goldman, Citi and BofA are the big 4 of the U.S. too big to fails.  Your prediction that Merrill is about to go bye-bye is tantamount to predicting Bank of America is going down.  Very long shot prediction imo, thus my "huh?"  At some point perhaps the too big to fails will no longer be backstopped.  I do not believe that is currently the case.

Yen Cross's picture

 Truth/ I went flat late Wednesday. I missed out on a huge move. I did well earlier this month , and I'm keeping my [powder dry]

busted by the bailout's picture

She's baaack -- Goldilocks!

Nice flourish at the end, and the close above 1500 will catch some retail investor's eyes over the weekend.

It's not too late to get in! 


It's getting harder and harder to make the case for collapse.


devo's picture

I think gold got slammed because people believe the economy is fixed. "We don't need gold anymore stock market is fixed, so economy is fixed." The logic doesn't make much sense, though, because if the economy actually does improve, velocity (and thus inflation) will be rampant.This looks like herd mentality/dumb money at work.


surf0766's picture

Are the sheep all in yet?


ekm's picture

All sheep have been slaughtered.

This is wolf against wolf.

DowTheorist's picture

I don't know whether gold and silver were slammed because of AAPL collateral calls. However, gold and silver weakness was manifest technically since 12/20/2012 when the Dow theory flashed a primary bear market signal.

Furthermore, on Jan 23, the Dow Theory signaled a primary bear market for the gold and silver miners ETF.

Thus, it looks dubious to me that such weakness has been caused by AAPL collateral calls. Weakness, for reasons that escape me (manipulation, economy improving?) has been pervasive of late.



Yen Cross's picture

 And so the Chineese can't dispose of me. They  try to gain Info,

 China is FUCKED.  China {rail, electricity} is FUCKED!

Obchelli's picture

I agree with all you say but question is WHEN will this implode. And yes they manage to create stability (strong illusion of) in extremely unstable environment.

Yen Cross's picture

 I said that I was "Price action".  I lost 200 pips on the crosses. I'm not stupid.

Yen Cross's picture

   Based on the close. Borrowing rates are probably heated for the Sunday open

are we there yet's picture

It is too early to know for sure how Geithner will be remembered in history, but my take is that hw was an obedient soldier to an invisible banker darth vader.

are we there yet's picture

Wonder if the Geithner replacement is being groomed as a fall guy for when things go south.

Ned Zeppelin's picture

I have to say, I am no longer paying attention to the S&P, and can only assume that regardless of what number it says this will end badly.

BaggerDon's picture

House of Mirrors,,,,,,,,,,,,,,,,if anyone looks at March of 2009 and asks themselves why the market went up? Money printing or economy, why does the economy ever matter again....??

BaggerDon's picture

House of Mirrors,,,,,,,,,,,,,,,,if anyone looks at March of 2009 and asks themselves why the market went up? Money printing or economy, why does the economy ever matter again....??

Grand Supercycle's picture

Wile E Coyote sell off awaits...

As mentioned – central bank intervention prolongs and postpones but can not oppose natural market forces indefinitely.

Lost Wages's picture

If it's only 1994, that means we have five more years of bubble to ride! Oh yeah!