Another "High Volume Dip To Low Volume Rip" Rotation

Tyler Durden's picture

Thanks to Draghi's jawboning the correlated risk-off rampage that occurred into and through the open of the US day-session (as EUR plunged 200 pips) sent S&P futures back well below 1500 on serious volume. Of course, that was unacceptable and once Europe closed and POMO was done, S&P futures began their VIX-coupled liftathon. By the close, S&P cash ended just in the red for the week again - within a 3pt range of closes (1511, 1512, 1509) in the last 3 days. Risk-assets in general were more correlated early on in the dip and then de-correlated (surprise) as stocks lifted. ETFs across rates, stocks, vol, and credit held together; but the underlying markets did not play along as the USD flatlined and Treasury yields only rose modestly as stocks surged this afternoon. Gold and silver ended the day down (after a flurry of dips and rips as Draghi spoke). A late-day, well-timed AAPL press release provided some impetus, pushing Tech almost into the green on the week (as only Staples are so far). European stocks, bonds, and credit are all red for the year; US credit is red for the year; US macro is red for the year; and US stocks continue to believe (SPX +6%) - even as the USD (+0.5% YTD) has the biggest 4-day jump in 7 months!


This is not rotation - this is a difference of opinion over risk... Credit is red from the start of the year, equity - not so much...


S&P 500 futures saw huge volume on the downswing and then nothing on the way back up to UNCH on the week... (green is above average volume and red is below average in the lower pane)


and it all happened after Europe closed and POMO ended...


ETFs in general across the capital structure clung to their 'far-value' as Capital Context's SPY Arb indicates below. However, the broader CONTEXT model shows the afternoon ramp was far removed from FX and rate movements...


The USD is up 1.26% on the week (and EUR 1.8% down vs USD)


- the biggest 4-day rise in the USD in seven months!!


Source: Bloomberg and Capital Context


Bonus Chart: AAPL rallied (on its 3rd try) to the top of its post-earnings gap-down levels...

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Tsar Pointless's picture

Bernanke Bux. Get some!

HedgeAccordingly's picture

100% someone front ran a big ticket to buy bonds by selling stocks.. when that ticket was near filled. they flipped and covered - Q4 EPS $0.35 vs. $0.19 Est. Q4 Rev $304M vs. $280M Est.

$TLT vs $SPY 1 min | TLT closed RED |

Racer's picture

I have enough toilet roll for now thank you very much

bobthehorse's picture

So when is this big crash finally going to happen?

I've been waiting.

My popcorn is ready.

Let's get on with it.

camaro68ss's picture

its all transitory, bennys got it under control. I hear there installing a new printer thats 2x faster then the last one.

Everybodys All American's picture

The con game continues for another day to absolutely no ones surprise.

SemperFord's picture

OT but anybody following this? Cops have shot 2 ladies because they were driving a similar vehicle


His Manifesto...

Cheshire's picture

Anybody see Amex`s 4pm swing? Maybe, there is a half second of reality when markets start and stop·

Hedgetard55's picture

The value of Ben's freshly printed dollars, their purchasing power, is stolen from all other dollars. There is no free lunch. Since the dollars came from nowhere, they must steal value from somewhere else.

John Law Lives's picture

Nothing to see here.  This is an efficient market that promotes fair and open price discovery...

Removing finger from throat and washing the vomit off the keyboard...

FUBAR every day.

John Law Lives's picture

I use a finger to clear out the bigger chunks so I don't choke on them.

This goddam "market" is such a goddam joke.

chump666's picture

EUR sell off was nothing, holding above the 50ma as you would expect, it pops above the 100ma, short squeeze.  DXY is bid becuase the commodity complex is being smashed again, China.  A currency that is being blown to sh*t because of this = AUD.

Central banks have to keep this market bid, but the problem these diseased a-holes have is the global ecomomy is worst than 2008, so if stocks tank now, will be a slap in the face to those idiots and also cause a straight up knock out to the so called recovery.

Artificial market through and through. 

Orly's picture

Aussie has been deserving it for months.  A move to below 1.02 is absolutely no surprise...before it moves back to 1.10.

EJ ramps to 140 in the interim, Cable balks and grinds the dust before Carney has to earn his salary.  UJ 110 maybe?  Higher?

Too much available cash on the sidelines, a la Japanese pension funds, my 403b.  Crushing US money markets (Great Rotation!  Ha!).  SPX 1650 before the real meltdown, as mom and pop sweat bullets and try for some kind of return in their old age- just before they're taken out to the barn.

Fekkin' disgusting!

Think it is Their concern?  Think again.  It's pathetic but I have to take care of mine and mine alone.

What a sorry state, Chump.  What a sorry state.  Berlin, 1919...

"New York, DC, wake up!  You are dancing with Death!"


DUNTHAT's picture

The currency market is starting to exhibit some disturbing trends.

Is this the beginning of a race to the bottom?  Last time this happened we had a depression.

Orly's picture

Commitment of Traders?

Are you even for real?

Orly's picture

Well, it seems to me that the action in the foreign exchange of late has had very little to do with commitment of traders and more to do with massive threats coming out of central banks.

Just saying.

Maybe in a couple of years, the metric may be useful but right now, it's not very helpful at all.


chump666's picture

South America inflation spreading like wildfire hitting Mexico, home of the nutcase narco's:

Sellers abounded in other local markets, as the peso weakened to close in Mexico City at MXN12.7290 to the U.S. dollar, compared with MXN12.6890 Wednesday, and government bonds relinquished some recent gains, pushing yields higher after an inflation report showed the consumer price index rising 0.4% in January against expectations of 0.32%.
Nomura said in a report that the higher inflation "closes the door" to an interest rate cut in March by the Bank of Mexico.

thismarketisrigged's picture

it was truly laughable how this market was down at a point, dow -135, s&p -18 and nasdaq was -- 35 i believe at its lows, and somehow dow finished only down 42, s&p down 3 and nasdaq same.


its truly remarkable.


the question is this. the global economy is worse since the last crisis in 08 and it is obvious that central bank intervention does not really solve any of the real problems, except inflate stock prices.

However, how do they justify doing this again when the market tanks, because it will clearly have shown that the economy still stinks and that montetary policy is not the answer. that will be interesting. 


im just waiting for the fed to withdraw, at least this is bernankes last year. hopefully we get a more hawkish fed chairman next year

disabledvet's picture

again "everything has been at correlation "1" for some time now. the question is "who's it gonna be this time?" Europe looks like TOAST to me...Spain and Italy both at the same time? I really don't see what Draghi can do but "watch and pray." Sure..."move to cash"...(dollar surges)..."but that's just for starters." Next stop is a massive move into Uncle Gorilla paper as "some country somewhere" blows up (Argentina?). In the meantime "us 'Mericans" are just skating away "on the thin ice of a new day." don't know why i'm not more worried...we'll see how the "retest" works through...the totality of demand in the USA is internal and has nothing to do with exports...will 1Q be solidly negative? i think that a "low to buy" though?. Have to wait 'till we get to that bridge first. Then again...the market just might not correct period and "the 4Q negative print was just a blip." shall see...

Grand Supercycle's picture

DOW monthly chart shows impending Wile E. Coyote drop.

It doesn't take a genius to realise this chart will end in tears.