Stocks Catch-Down To Credit As Silver Surges

Tyler Durden's picture

We noted yesterday the growing disconnect between stocks and credit - today saw stocks start to play catch-down. High-yield credit (specifically HYG - the bond ETF) has fallen four days in a row - its biggest four day plunge in over 2 months (with today's drop the biggest single-day drop in almost 4 months) amid mega volume. VIX (another notable disconnect) continued to push higher (above 14% for the first time in 3 weeks). Treasuries had been leaking higher in yield on the week (30Y +8bps as FOMC hit) but slid lower as the post-FOMC day wore on. The USD weakness (led by significant strength in CHF and EUR) supported precious metals (and commodities broadly) but not stocks. Silver are up almost 3% on the week (and Gold outperforming USD's implied shift). Homebuilders faded from the open with all the QE-sensitive sectors (Materials, Energy, and Discretionary) all red on the week now. It would appear that bonds recoupling (higher in yield) with stocks was the end of the catalyst for this run higher for now as divergences are appearing everywhere.


S&P 500 futures went red on the week at the close...Worst day in a month!


Something unusual happened... the S&P 500 futures fell from the EU close to the US close...

Trannies lost their way today - and are beginning the reversion...(YTD performance for the mahor indices - except RUT sorry)


and YTD performance for financials...


As post-FOMC saw stocks losing the bonds rallied...



It would appear that GDP was today's early trigger for the PMs...


FX markets saw USD weakness continue - led by quite serious strength in CHF...which seemed to trigger off the start of bad news from Italy...


Divergence #1: VIX vs Stocks


Divergence #2: HY Bonds vs Stocks


Divergence #3: Credit Spreads vs Stocks


Divergence #4: Gold and Stocks/Bonds


Source: Bloomberg and Capital Context

Capital Context (@CapitalContext) LLC is the leader in integrating credit-market data to actively trade equity markets. From our world-renowned intraday 'CONTEXT' and 'SPY Arb' models to the daily long-short equity portfolio, sector-weight updates and tactical asset-allocation strategies, Capital Context offers sophisticated hedge-fund strategies to the active trading community.


Bonus Chart: RIMMberrrr....

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
The worst trader's picture

Gotta love Santelli!

debtor of last resort's picture

Silver is the trigger. The brick in the methmouth. Bitchez!

caimen garou's picture

sing it again ben so we can have another surge in pm's!

Random_Robert's picture

Precious metals...?


ANY metals, bitchez...


Long steel shovels, iron rebar, nickels, lead and brass....



Broccoli's picture

Long growing your own food, distilling your own liquor, and killing your own meat.

Freddie's picture

Is "killing your own meat" like beating it?

akak's picture

You know, that which does not kill your meat only makes it stronger.

css1971's picture

'sall just transient factors, right in a jiffy.

disabledvet's picture

Gold had it's first good day in forever. Should be interesting to see how the already slammed gold mining stocks respond...clearly you want to sell those dogs since they've missed the whole rally upward. Pay me in gold Barrick if you want me to buy. While I'm not out of individual names I am out of the indexes...and after today's "we're all in denial here" Fed stsaement I think I'm ready to make some predictions: first, tax revenues will surprise to the upside big time, second the next GDP print will be horrible, third the Fed will announce a 500 billion dollar plan to buy up student loans, fourth their will be a raft of "municipal hiccups" resulting in a major blow up-probably Illinois but also in many other places 5 Europe is going to massively double dip sixth Israel will be forced to "evacuate somewhere sixth the North Koreans will test a massive hydrogen bomb successfully and seventh the USA will be "in big in Mali."

adr's picture

If I had a lot of cash I would have shorted RIM going into today. I follow the actual product, not the hype and every leak of BB10 made it look like it could have competed in 2008. Hope is a funny thing, it works until reality slaps you in the face. Well some investors made a killing riding the RIM wave up, but that's over. Eventually you need to accept reality.

Other than Amazon of course. The face has been slapped around so much that it makes Rocky after a fight look good. Justice would be a 75% cut in the stock, but Bezos blow jobs must be the greatest on Earth.

quadcap's picture

Everybody here loves to beat up Amazon, because of the ridiculous stock price, but the fundamentals are really strong.  Continuing YOY revenue growth, even in 2008 and 2012 when other retailers got hammered.  The sales tax thing is a hidden blessing for them, because it enables them to put forward deployed fullfillment centers close to their customers and kill the competition with free same day delivery.   This barrier to entry will give them a de facto monopoly position in e-commerce.   As a customer, I find them to be true to their claim of being the most customer-centric company, and I don't think they really care about the stock price, it just doesn't enter into their calculations, except, I guess, for RSUs.

The stock should be a short, by all rights, as it was in 1996, when I lost money shorting it ($14B market cap with $2B negative stockholder equity!), but don't blame Amazon for the Fed's money pumping operation and the greater fools that pile on to the "momentum" trades.

JohnGaltsChild's picture

Blythe Masters ain't gonna like this...............

GNWT's picture

party like it's 1999...


with the Silver Liberation Army...


falak pema's picture

who wants to buy gold coins at 40% discount ! :

PETER SCHIFF: I'm Selling Gold Coins At A 40% Discount - Business Insider

3 million $  stash.

klockwerks's picture

I checked that out today from Peter, 5.5% over spot but look at what gold did today. Didn't seem like such a hot deal today with the gold price going up like it did. When the price goes down some he will be OUT OF STOCK. I was ready to jump on that early on today but watched that price go up and backed off

fiddler_on_the_roof's picture

Several months ago, when ZH and all here were trumpeting that EU is going to disintegrate and making fun of EURO currency, I warned that EURO is the best managed currency irrespective

of the individual countries. They are the nearest hard currency of all there out.


At that time EURO was at $.125. Now it is $1.35. I won't be surprised it goes to 1.50 and above.

EURO shorts will eat shit..

"orly" was brave to short EURO 1 months ago..?

plata pura's picture

not iffin carlo slim and the persians go forward with plans on backing currency by nobility. over

silverdragon's picture

Come on Silver, kick arse and take names!

silverdragon's picture

Silver, go and find that Fiat, f*ck it and find then some more.

plata pura's picture

whilst the gift'd pamphleteer al gore gives hint on the precious' highest and best use he nary made mention of the secret @ ft knox. alchemy of gold, platinum, palladium and rhodium replicated by sub atomik replicators; silver impossible.........

silverdragon's picture


You are retarded!