Gold Rallies As Stocks Suffer Worst Day Of 2013

Tyler Durden's picture

Following Europe's worst day in months, the US stock markets saw the biggest drop of 2013 today. For those shunning the brief period, aside from 12/28 swings, this is the worst drop in the S&P 500 futures since early November on a relatively high volume day. EUR's weakness was a major driver (just as it was on the way up) jawboned by various CEOs and leaders and pressured down to almost a 1.34 handle (down over 1% against the USD as JPY gained 0.6% against the USD). Treasury yields clattered lower - to Friday's lows - and credit markets remained much less exuberant (as stocks played catch-down). Gold was relatively bid even as the USD gained, testing up to $1675.  Homebuilders continue to slip lower and with AAPL's ongoing demise, there was no OPEX/month-end pump to save Tech and implicitly the rest of the market. HY Bond ETFs and synthetics remain weak but selling is thin in bond-land - it seems everyone knows that the cash market can't stand a herd heading for the exit all at once. VIX jumped a considerable 1.75 vols to 14.65% - its highest close of the year.


It isn't much - a 1.35% drop from Friday's highs - but its the biggest PLUNGE since the year began in an inexorable rally in stocks... realized vol picked up too


As EUR weakness and JPY strength dragged the USD higher and hurt carry-funded trade everywhere...


As Stocks remain massively disconnected from credit...


as it is becoming evident that all those 'stuffed' managers are seeking alternative to hedge with - as opposed to selling down their holdings - the HY Adv-Dec line is beginning to crack...


and Gold managed gains, even as the USD gained...


as it catches up to Treasury yields and stock prices...


as VIX pushed to its highest close of the year - also notably divergent from stocks (and a motably flatter curve)


S&P500 futures held that magical 1490ish level once again - though we did not see the nortmal surge BTFD move off of it...


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: McGraw Hill gets a slap on the wrist...

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falak pema's picture

bad day in black rock; take the next train to boot hill. 

If you miss that you can catch the 3.10 to ...yu-ma-gal !

The only bourse that seems ok is the Nikkei on the rocks! I guess the sliding Yen helps.

I think I need to buy a gun's picture

all i know is gas has rallied this week at my local gas station to the tune of .45-.60 cents this week

DoChenRollingBearing's picture

Gasoline has not yet jumped in my corner of FL...

Chupacabra-322's picture

You must live in the "Dark" side of town. 

BeerBrewer09's picture

Stocks down? Print dat sheeeeiiittt.
Gasoline up? Bomb some more brown people or blame speculators.
Gold up? Dump moar shorts on the market.

People asking qustions? Show them football. If that doesn't work take their guns and internet, put them in gulag.


gg 'merica. thanks for playin.

MisterMousePotato's picture

I have been thinking about this a lot. Are not both of the following statements true?:

1. The Fed and the US government will do anything and everything (and I mean that in the strongest literal sense) to prop up the stock market. Otherwise, pension funds, public and private (but especially public) are utterly bankrupt overnight. Obviously, anything and everything includes (at a minimum) printing money and giving it to others to buy stocks, if necessary. There are even some on this website who have made a compelling case that such is already being done.

2. The Fed and the US government are actively undertaking debasement of the dollar to monetize debt and to keep the system from outright imploding quickly. Again, I have read enough articles and commentary here that I am persuaded that this has already begun, and, further, that this policy will be pursued until the very end.

I am aware that there is what appears to be a disconnect between the economy and the market; viz., the market no longer reflects the underlying economy or fundamentals of any particular company or sector, but instead is being manipulated to enrich certain individuals, prevent utter pension and system collapse, and to give the appearance (via television sound bite talking points) of normalcy or better.

Nevertheless, given the certainty of the two policies mentioned above, is it not impossible that the market will decline in any significant manner (at least nominally), and likely will provide growth commensurate with real inflation for some period of time (which may well prove to be longer than my remaining days here on Earth)?

Really, it seems like the big questions are:

1. How long? When?

2. What will prove the harbinger of real decline?

3. Will manipulation and support include all stocks (including Facebook, Netlix, Amazon, and their ilk) or just some? How to identify those that will enjoy the most support the longest?

Spirit Of Truth's picture

The sharp reversal in the stock market today, the first trading day after the DJIA closed above the psychologically important 14K mark, is an extremely ominous development IMHO.  War or a like geopolitical crisis may come next:

zorba THE GREEK's picture

We will be seeinga lot more of this scenario in the days to come.


Manipuflation's picture

Yeah, same here and we and everyone else who buys gas is caught short.

bobthehorse's picture

You want to see deflationary collapse?

Wait till Europe finally shits the bed.

Your gold won't be worth anything.

These are strange times.

thismarketisrigged's picture

bernanke will give back all losses tomm.


lets pray this is the beggining of a global sell off

Frozen IcQb's picture

Wake me up when the Dow to Gold hits 1.

DoChenRollingBearing's picture

I would buy gold before then...  And see the benefits!

Frozen IcQb's picture

Then again, the world might not be worth waking up to at that point. However, the Dow would be cheap given the blood in the streets.

Mr Lennon Hendrix's picture

DJ 10k: Gold 10k - sounds fine to me.

markettime's picture

This is the first day this year my gold holdings actually did something while the rest of the markets were down. I hope I have more days like today! 

Terminus C's picture

Assuming you have physical... you gold holdings did the same they do every other day... sat at the bottom of the lake after your canoe incident.  The nominal value doesn't mean shit.

HaroldWang's picture

All the tech darlings hit today with the "smart" money (as Pisani would say) chasing the newest helium high darling - NFLX. It's a wonderful market, or whatever you want to call it.

Al Huxley's picture

I'd like to go long NFLX, but I'm waiting for the central bank of Israel to put out some kind of word that they've established a position as my 'all clear to buy' signal.

Dr. Engali's picture

So just BTFD ahead of POMO then?

bdc63's picture

it worked all through january that way.


Al Huxley's picture

I thought every day was POMO day now.

cliffynator's picture

No, POMO took the day off today. Probably planned in advance since it was the day after the Super Bowl. Shenanigans and nonsense will resume tomorrow.

Papasmurf's picture

lather, rinse, repeat


This month's $80B hasn't been injected yet.

fourchan's picture

vix as bad as it is looks like its getting ready to break out.

Al Huxley's picture

Not when the govt is actively suppressing it.  Who would have ever guessed the day would come when the government actively manipulated the VOLATILITY INDEX as a perception mgmt/propaganda tool?  We've sure come a long way in the sophistication of the propaganda since the '1940s and '1950s.

VonManstein's picture

Not to worry. The metals, namely silver, will rocket very shortly (on any kind of sustained equity pullback) and the GSR will destroy the DXY (GSR leads and predicts DX)


USDNOK already close to low lows USDSEK also.. Its all on the way dont worry and every asset is in final stages of major pattern completion. Manipulatiors will lose.. and drag many down with them unfortunatly.

Physical only, of course

Al Huxley's picture

Of course, physical only.  Although I expect the 'price' to continue to fall as the amount of physical metal available in the market drops.  I've decided the best signal to watch is the premium at my local coin shop.  Once his supply starts getting constrained he presumably won't be willing to sell at the Comex price anymore.  That will be the tell that the game's almost done for the paper market.

VonManstein's picture

I think paper to go higher. Gold is solid surely. OI is at august levels whoevers left isnt selling, at least thats how i see it.

Silver though, i mean.. Physical situation is off the charts and the weekly oscillators are mega bullish. Two weeks i say and we go.

Stocks may run a little while from here but when metals go its be topping out time for SP/

could always be wrong like.

SheepDog-One's picture

All hinges on blatant manipulation of 'indicators' about screwed.

css1971's picture

They're playing whack-a-mole.

francis_sawyer's picture

The AFC winning the SuperBowl portends a 'losing' year for the DOW...


I remember hearing 'hard hitting' financial wizardry commentary like that on CNBS back in the day... [that's why they got paid '2&20']...

NeedleDickTheBugFucker's picture

Looks like CNBC couldn't even get the anomaly correct (they must miss Darren Rovell).  The Super Bowl indicator for the stock market is not meaningful this year.  Historically, the forecast of a down stock market for the year only applied if one of the original AFL teams won the Super Bowl.  49ers and Ravens (formely the Cleveland Browns) are both original NFL teams.

francis_sawyer's picture

That's true [caveat applies to 'original' AFL teams]... good catch!


Bullish! BTFD! :-)

Chupacabra-322's picture

You're kidding me right?  Outside of Wall Steet and the world financial markets, sports are the most rigged game in town. 

Cheesy Bastard's picture

The AFC winning the SuperBowl portends a 'losing' year for the DOW

    You are only looking at the raw superbowl data.  The superbowl is played in the winter, so after the seasonal adjustment, the niners won by a point, just as I predicted.  There are Mean Joe Green shoots everywhere, and we are approaching the season of recovery.  If one doesn't have a PHd in footballnomics (or closely related coachology) one might not be sufficiently prepared to comment on any of this, either.

francis_sawyer's picture

gotta 'earn' your 2&20 somehow...

Cheesy Bastard's picture

+1.  Flat fee + Performance based fee (+ manipulation)= no way to lose...

francis_sawyer's picture

Cheesy ~ if you look real hard... francis_sawyer does his best, FREE OF CHARGE, to help people make money every day...


Besides suggesting [all documented on ZH]:

- taking the Ravens (+400) vs. the Broncos

- taking the Ravens (+400) vs. the Patriots

- taking the Ravens (+175) vs. the 49ers

[a PARLAY that would have netted you out a 28-1 payout]...

These weren't just whimsical picks... I went into DETAIL as to why the "lines" were incorrect... I probably wrote a whole page on the Denver game... & most recently, I gave you the proper VIEW on the SuperBowl

- which amounted to turnovers & Jerome Boger penalty flags...


But people here are too worried about whether any Joos are being mis-represented to profit from anything...

francis_sawyer isn't the one trying to steal your money... But you gladly fork it over to the '2&20' theives...


Cheesy Bastard's picture

Yeah, I should have just gone with the low hanging fruit and said coach Harbaugh would win.   Do we really need to bring the Jews into every single conversation?  It gets quite tiresome. 

francis_sawyer's picture

I try to avoid it when I can, but in banking & the financial world, it's like jumping off a boat & trying to avoid hitting the water...

Manipuflation's picture

Since you put it in that context F_S>>> +1.  When you bring up the Hebrews it is not anti-Semitic in tone so much as it is fact and I think that mere mention of the word "Jew" confuses some people who then go into pre-programmed knee jerk reaction mode.  For example, I don't think we should give Isreal one red cent in foreign aid.  Cut them off.  That's not anti-Semitic either, it's just good financial sense.  And if anyone out there in ZH land thinks AIPAC isn't operating on this board..... 


Did you have a comment deleted earlier today F_S?  You posted a link on another thread but I couldn't find anything that you said that was out of line but perhaps you did cross the line?

francis_sawyer's picture



I calculate that half the VOLUME of my comments relating to Jews come about because anytime ANYONE dangles something like out there, everybody goes stark raving mad...

The ADL has gone to such extreme lengths to silence everyone on the mere mention of the subject [for 'paranoia' or whatever reason], that you have to go about EXPLAINING YOURSELF 8 ways from Wednesday in order for your comment to appear logical in context...

IMO ~ In aggregate, it's a behaviour that breeds more suspicion & contempt than it does TRUTH... But that's THEIR problem...


I don't know if any of my comments were deleted... I really wouldn't care one way or another... 'Silencing' people [in the history of the world], never ever held a candle [IN THE LONG RUN], to people who spoke the TRUTH...

Manipuflation's picture

@F_S.  I agree that the truth should not be run over for the sake of being politically correct.  You know that you are getting to the heart of the matter when you start pissing people off.  I see what it is that you are OBSERVING and commenting on which is not hate speech the way I interpret it.  All I am saying is that folks need to stop and look at what it is that you are OBSERVING. 

Analyse the data folks and shitcan the "Wo, is me because I am a Jew." meme that has been installed in your heads.  Over 50 million people died in WWII and over 20 million Russians took a dirt nap.  Yet, it's OK to sit and rip the shit out of the Russians still to this day?  I am inclined to agree with CD's first article that perhaps we should look at what we think we know to determine if we actually know something or are regurgitating political phlegm.

francis_sawyer's picture



I happen to like diversity... I think that is the STUFF of growth...

It's a hard subject for people to sink their teeth into [because it takes a keen mind to distinguish the difference between somebody NOT saying "Exterminate Them" & INSTEAD saying "I'm going to put up a fight if you try & exterminate me"]...


To give you an example... Every spring I have a fight with BORER BEES [which are a pain in the ass because I have an almost 'Swiss Family Robinson-esque' decking system]... Yet at the same time ~ they're my main source of fruit & plant pollinators...

Manipuflation's picture

I agree F_S.  You seem to have a practical understanding of the world around you through observation as well as a practical background in agronomics.  So do I.  As for the borer bees, I understand the give and take as it is economics.  Have you ever thought about honeybees as an alternate pollinator?  Or would they interbreed and create some issue?  See, this is what so many people do not understand, i.e. causal relationships.

So it is not for me, or anyone else including a .gov agency that lives 1000 miles from your place, to tell you what to do to solve the bee issue but rather for you to determine the best course of action.  I have my concerns about fipronil and honeybee Colony Collapse Disorder as I am pretty sure that the cause of CCD is extremely excessive fipronil use by homeowners since BASF started selling it to everyone, their brother and Wal-mart.  I used to refuse to sell fipronil to homeowners.  Fipronil is awesome of used properly but to let it into the hands of the average mortgaged to the hilt "homeowner" is not a good idea IMO.

No easy answer is there?

q99x2's picture

BTFD This is the last chance you may ever have.

EclecticParrot's picture

Hmm.  Well, then ...  you might want to affix the propeller even more firmly to your crown, and make sure it's spinning 'directionally correct', so's you don't miss the big rebound tomorr-y.

As for me, I just hope the dorks at Direxion 10-1 reverse split TZA soon -- even on a per share basis the paltry $11 stock price makes day-trades riskier than they need to be, today's juicy little run notwithstanding.  SSD or QID don't quite provide the same pop.  Given these things are (allegedly) designed for day trades, they should never let it drop below 25, to keep us bears happily shitting in the woods (although I guess we non-holders don't pay any fees, do we?)

Mr Lennon Hendrix's picture

5% - 10% pullback coming for equity here.  Then as Europe burns in the hearth of technocratic governments the Debt Cieling will spark new rumors of debt default in the US. 

But we know how the can will be kicked - they will print more currency, causing everything to increase in price as the fiat devalues.

Soon inflation will not be able to be masked by short positions on oil by JPM.  Soon the real costs will rise and a wrench will be throw into the mouth of the Fiat Ponzi.  Soon prices for everyday goods will make GDP negative and expose the system for what it is:  total fraud.