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Tale Of Two Markets (Again)

Tyler Durden's picture




 

The US equity market continues to boldly go where no other market is willing to go (Dow outperforming EuroStoxx by 850bps this year). European stocks and bonds (+30-45bps) are down notably on the week (and year in some cases); Treasury yields are 4-6bps lower on the week; the USD is up 0.6% (as EUR bleeds a little lower into tomorrow's ECB); and Gold is up 0.6% (oddly with the USD) on the week; but US equities are unchanged with Staples and Industrials holding gains on the week. Today saw credit markets and treasuries pushing notably risk-off as stocks oscillated around unch on the week - pushing to the day's highs into the close on the back of yet another vol-selling ramp. Equity volume was average and trade size was lower than average as cash S&P and Dow managed small gains and Nasdaq a small loss as AAPL gave back its 'buyback rumor' gains.

 

Treasuries and Credit notably more risk-off vs Stocks and Vol...

 

leaving the S&P 500 unch for the week...

 

though breadth was weak once again...

 

but the USD is up for the week...

 

and Gold is up on the week...

 

and Treasury yields down for the week...

 

as stocks certainly seem on their own from shortly after the European close once again today... as Capital Context (@CapitalContext) LLC's ETF SPY Arb model (left) indicates, today saw US equities notably more exuberant than the rest of the market capital structure and while CONTEXT (right) was more correlated - overall, risk-assets are less excited than US equities in general. The tactical asset allocation model remains market-neutral (based on credit's divergence).

 

This inexorable rise in stocks to start the year is not unusual - though this is now the best in years...

AND the most disconnected from other asset classes...(HY notably divergent from previous years)

 

Source: Bloomberg and Capital Context

 

Bonus Chart: We've seen this disconnect before...

 

Bonus Bonus Chart: In case you had any question as to this market's schizophrenia... a favorable ruling (via Flagstaff vs AGO) helped the ongoing MBIA vs BAC court battle smashed MBI's share price up over 15% - but BofA's also rose!! Teflon market...


 

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Wed, 02/06/2013 - 17:22 | 3221319 willwork4food
willwork4food's picture

Stocks are so....yesterday.

Wed, 02/06/2013 - 17:23 | 3221321 mayhem
mayhem's picture

are they going to meet in the middle? Hard to imagine a breakout without some political smoke and mirrors but anything is possible.

Wed, 02/06/2013 - 17:28 | 3221339 Dealer
Dealer's picture

Kevin Henry was up on the wheel today.

Wed, 02/06/2013 - 17:28 | 3221340 km4
km4's picture

more stocks should go private like DELL just did which will diminish power of Wall St. and expose the real US economy rather than the mostly fake one that Wall St and federal goverment drive

Wed, 02/06/2013 - 18:44 | 3221547 otto skorzeny
otto skorzeny's picture

best bet is to take your company public-run up the stock on bullshit #s(a good old mob bust-out), put out a bunch of shit #s and short the shit out of it and THEN go private

Wed, 02/06/2013 - 18:48 | 3221559 a growing concern
a growing concern's picture

I bet some asshole banksters are gonna be calling you up real soon to come work for them.

Wed, 02/06/2013 - 17:30 | 3221349 Squid Vicious
Squid Vicious's picture

if gasoline prices shoot up 15% - but no one on CNBS notices, did it really happen?

Wed, 02/06/2013 - 17:34 | 3221358 lesterbegood
lesterbegood's picture

A bit off topic...someone betting big against the banks:

http://www.businessinsider.com/massive-options-bet-against-bank-etf-2013...

Wed, 02/06/2013 - 17:57 | 3221409 Village Smithy
Village Smithy's picture

Probably complete BS designed to create another layer of shorts that can then be run to make things go even higher.

Wed, 02/06/2013 - 18:06 | 3221427 Melson Nandela
Melson Nandela's picture

shorts are making more money than longs on the Russell 2000 for the last few days, and that always leads...a short term top is here. MAX 1520 on the S&P.

Wed, 02/06/2013 - 19:59 | 3221722 Village Smithy
Village Smithy's picture

I hope that you are right. we need to get back to reality so that we can rebuild.

Wed, 02/06/2013 - 17:54 | 3221400 Village Smithy
Village Smithy's picture

The PDs  just need another week to 10 days of selling to the muppets (it takes a little longer these days now that no one watches the cheerleaders at CNBC) and they will have ridden Bernanke's gift to the top. After that an "event" will occur that "no one could have seen coming".

Wed, 02/06/2013 - 18:03 | 3221420 Melson Nandela
Melson Nandela's picture

Tyler forgets the second hedge fund roach hotel (Russell 2000 & Russell 2000 futures). When Carney & BOE stand pat, and Draghi doesn´t cut rates Euro will soar and Markets wll tank. Ben, JCB & BOE are in full easing mode, Carney will wait unti he takes office to do anything. Draghi is German. Central Bank manipulation is near the end of its lifespan. I am short the close today, the cracks are showing through the plaster. ...

Wed, 02/06/2013 - 18:29 | 3221495 Conman
Conman's picture

Markets so great even algo firms are laying off - bye bye knight captial?

http://lwd.state.nj.us/WorkForceDirectory/warn.jsp?printacrossID=1&Start...

Wed, 02/06/2013 - 18:47 | 3221520 devo
devo's picture

I think the market is somewhat rational. Simple question of whether you would rather own shares or dollars. Not sure it matters long-term as the govt is going to take both away. All roads lead to buried gold.

Wed, 02/06/2013 - 18:50 | 3221567 a growing concern
a growing concern's picture

Pb Au Ag Cu

 

That's diversification.

Wed, 02/06/2013 - 19:10 | 3221578 devo
devo's picture

I've been waiting since October for my C&R license (is this a normal wait?).

Wed, 02/06/2013 - 19:20 | 3221642 Joe moneybags
Joe moneybags's picture

I've been waiting even longer for my 2013 Mayan calendar.

Wed, 02/06/2013 - 18:58 | 3221588 disabledvet
disabledvet's picture

not a technician but that last chart says "buy MBIA" and "sell BofA." That loss of Saturday delivery is a MASSIVE hit to the American economy. I took note that the Postmaster General called it cost "reduction" and not a "savings." This might not sound like a big deal to some but to me that says "the loss of Saturday is permanent." Stab America in the back in the "very, very, very, very, very, very, very, very, very" first innings of a Total War and...well, let's just say I didn't agree with the Banker Bailouts either. Anywho "the Federal Government is in the very first innings of figuring out how to pay for it all"...hat's off for them actually trying. They don't have a choice...for the amount being spent currently we should spaceships that fly to Mars and back on a daily basis. I will be watching the elections in Italy VERY closely. I really feel like these "financial weapons of mass destruction" as Warren Buffet called them "are ramped up and ready to fire." We've lost all our cities up here so...well, "i would recommend someone start studying how well being merely greeedy" matches up against simply ONE of these things. If you're looking for answers as a "cub scout journalist" i would recommend starting with Ireland...proceed to Portugal...with a final stop in Greece. And well people do the math on the energy numbers figure "the total supply on hand" number they might want to add "how much supply we actually have in the USA should a solar panel capable of powering that new Cadillac engine" (let alone the existing Honda Insight or Toytoa Prius) would mean "and then do the math." You do have me on the whole "but that product doesn't even exist" thing...but hey, the people who have already developed and built it have already figured it out "and told Wall Street and the Pentagon accordingly."

Wed, 02/06/2013 - 19:01 | 3221599 devo
devo's picture

How is the loss of Saturday delivery a massive loss to the economy?

Wed, 02/06/2013 - 19:25 | 3221657 Conman
Conman's picture

Jobs. Postal union is already threatening to sue.

Wed, 02/06/2013 - 20:20 | 3221776 El Hosel
El Hosel's picture

pushing to the day's highs into the close on the back of yet another vol-selling ramp...  On the back of our favorite Vol selling central banker. Benny has your back Bitchez, cover your front.

Wed, 02/06/2013 - 20:25 | 3221785 Silverhog
Silverhog's picture

Do I need 3D glasses for this?

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