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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Mon, 02/04/2013 - 18:43 | 3214624 RockyRacoon
RockyRacoon's picture

It's been "Soon" for way too long now.  Wake me up when it's imminent.  Or, better yet, the day after.


Mon, 02/04/2013 - 17:58 | 3214486 Bokkenrijder
Bokkenrijder's picture

"Gold rallies..."

Really? Gold rallies? Where? When? With the best will of the world, but I don't see a "rally." I merely see the price bounce back a couple of Bucks to where it was earlier this morniing....

Mon, 02/04/2013 - 18:06 | 3214509 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

First, you are fighting day trading Tyler, better know as Nic Lenoir.  Second, gold was up $7 while stocks were down 1% in the US and 2% in europe.  In the face of a stock sell off, $7 higher is fine. 

Slow and steady wins the race.

Mon, 02/04/2013 - 18:21 | 3214554 fuu
fuu's picture

Ah thanks for that clue.

Mon, 02/04/2013 - 18:31 | 3214599 fonzannoon
fonzannoon's picture

If we get anything more than a 3% pullback I will be shocked. Why spend so much time trying to get the herd to stampede back into the market only to possibly scare them away so quickly?

Mon, 02/04/2013 - 19:50 | 3214827 BeerBrewer09
BeerBrewer09's picture

yup. they are looking for upward movement overall. this is how wealth is made. the market will go higher. plus people are so fucking dumb, they'll never complain about $5-$8 bread as long as it appears like their 401k is "making them money"

imho, there is no fucking way they will let the market drop.

Mon, 02/04/2013 - 18:51 | 3214640 Lmo Mutton
Lmo Mutton's picture

Silver Bitchezzz!!!

Mon, 02/04/2013 - 18:51 | 3214643 chump666
chump666's picture

I'd be careful, this could be a bear trap.  See what Asia does, they go down over 2% across the board, Europe opens 2% gap down, EUR tanks more (on corruption in the Italy, Spain allegations, the Germans are going to love that).  We might have a solid sell off building, 1% sell offs on US markets are nothing with crazy money printers lurking.

30yr bond tanking on Friday was a good indication that the US bond markets could be under strain despite QEforever.  We could have a huge wipe-out coming, that may stay wiped for a while.


Mon, 02/04/2013 - 19:49 | 3214824 Kingkongballs827
Kingkongballs827's picture

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Mon, 02/04/2013 - 20:08 | 3214892 chump666
chump666's picture

Hell yeah.

You know the gun that I really like is the SCAR MK17 that the special boarder patrol guys use.

Mon, 02/04/2013 - 20:01 | 3214873 thismarketisrigged
thismarketisrigged's picture

Asia will almost certainly sell off tonight as they usually follow the u.s markets and european markets.


however, all there needs to be is 1 stupid false rumor tomm in europe about how everything is ok, etc, and europe will be up nicely, which of course the u.s will follow as well.


lets hope europe is as bad as it seems and we see a global collapse. couldnt happen to better ppl a big crash

Mon, 02/04/2013 - 22:31 | 3215251 chump666
chump666's picture

HK is selling hard like the good old days (2012 before July and then after CB madness), DXY has slight bids, Futures are bid.  Market could be trying to correct, with POMO expectations securing bids on futures - a short trade looks perilous at this point. 

But revenge is building.

Mon, 02/04/2013 - 23:02 | 3215310 americanspirit
americanspirit's picture

Theories aside the world is sliding toward collapse and gold/silver are the only refuge. The only issue is how long it will take how many people to realize this and act. At that point those who already own physical gold/silver will face a difficult decision - how to realize the value of their assets without exposing themselves to risk.

Mon, 02/04/2013 - 23:03 | 3215312 Nid
Nid's picture

US Eq spiked immediately after today's close...just like last Thurs. They'll open the DOW up 150 tomorrow.

Mon, 02/04/2013 - 23:36 | 3215399 FearedDevil
FearedDevil's picture

not realy a gold rally - still waiting for some important channels to break in gold before I get excited.

Mon, 02/04/2013 - 23:52 | 3215438 Overfed
Overfed's picture

I could swear I read an article the other day about all of the folks jumping back into retail stocks due the rally since the beginning of the year.

I guess that is how muppets are slain.

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