What Comes Next: 1518, 1517, 1519, 1520, ...

Tyler Durden's picture

Volumes were pitiful once again and while the range picked up a little (after yet another top-side stop-run) average trade size remains falling as equities appear all gung ho on the surface but the S&P 500 has closed the day session in a 2 point range for the last 4 days - 1518, 1517, 1519, 1520. All this as Treasury yields have actually been bleeding higher (+6-8bps this week), USD flat, Oil up 1.5%, and Gold and Silver -1.5%. Homebuilders remain in a high-beta world of their own +3% on the week with all the other S&P sectors between -0.25% and +0.75% (as Tech is dragged lower along with AAPL again). S&P 500 futures saw quite a drop intraday (9 points high to low) which is sad to get excited about but the ubiquitous VWAP ramp into the close saved the day and limped us into the green on the day (which was oddly accompanied by a huge sell block volume in AAPL). VIX pushed back up to 13% and credit made some more correction back up to stocks right at the close. The last 3 days in ES have seen the lowest aggregate volume in six months - not exactly the new bull market meme?


It seems the sequester is being priced into defense stocks - but the rest of the market (bonds and stocks) are ignoring it for now...


Volumes are dismal up here in stocks and we are just treading water...


and close up tody shows that there was some notable institutional selling at VWAP - not something we have seen much of this year...


as sectors remain highly correlated - aside from the squeeze holding in from yesterday in Homebuilders...


Treasuries had an ugly day as 10Y broke above 2% once again...


FX vol remains active - with USD reverting back towards unch on the week (and GBP leaking notably weaker)...


Charts: Bloomberg and Capital Context


Bonus Chart: HYG is pulling rich to its fair-value as we suspect more of the world is waking up to the long credit short equity arb - at well over 3 sigma rich, it's worth a half-unit risk in our view Buy 3 units HYG, Sell Short 1 unit SPY...


Bonus Bonus Chart: Equity vol is extremely cheap relative to credit vol currently - suggesting a short HYG straddle vs long SPY Straddle...

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Jason T's picture

..waiting for something to go kaboom is all I can say. :/

RockyRacoon's picture

Duck and cover!  Yep, I actually am old enough to remember the drills.  There were also displays in the parking lots of shopping centers for fallout shelters.  You could walk into them and select your model for installation on your very own property.  Weird times the cold war.  Preppers weren't depicted with tinfoil hats back then.

Say What Again's picture

Take a look at the $SPX index on a 15 minute basis and tell us what you see.

VonManstein's picture

SPX 1480 next week!

Mr Lennon Hendrix's picture

Who cares?

Seriously, who fucking cares anymore?  Stocks up....stocks down....Yen down, dollar down, dollar up, euro down....

Bonds up, then down....

Who fucking cares when the Central Banks have everything on a string.  We all know the only investment is gold and silver bullion.  If anyone is still toying around with stocks while Rome burns they should ask themselves why they like the fire when there are green pastures elsewhere.

SheepDog-One's picture

Seriously....I spent the last 2 years buying crates of ammo, now I'm selling them for double. Screw these idiotic rigged stawk markets.

you enjoy myself's picture

SPX 1480 next week!

i'd like to believe that, but 1560 is probably more likely.  AMZN, LNKD, etc aside, this persistant ramp job isn't because of mistaken earnings expectations.  its because $85B a month is being sloshed into the banks/funds and levered to the gills.  that's not ending any time soon.


Randall Cabot's picture

Feb. 13, 2013

Wharton School economist Jeremy Siegel, author of two classics, “Stocks For the Long Run” and “The Future for Investors,” is one of America’s most respected financial minds. He recently told cable channel CNBC that Dow 15,000 was “definite,” with 50-50 odds of Dow 17,000 by year-end 2013.

He even doubled down in Kiplinger’s: “My Dow 17,000 projection may turn out to be too timid.” Now that’s real bull, a 20%-plus gain for 2013.


buzzsaw99's picture

>2% on the 10y ugly? Why I remember not too long ago it was ~ 3.5% and everyone was saying it can't go any lower. those people look pretty damned stupid today.

SheepDog-One's picture

1 point per day till the year 2525....if man is still alive!

The Heart's picture

What comes next?

How about experiencing first hand every human emotion one can in an instant?

What comes next.:



"Second, I was told all the listening into people's conversations and reading of the emails, people don't really need to worry about that.  The intelligence officer said "Yes, they are, BUT they don't give a Sh** about all of our opinions.  They care about money.  They are paying attention to the big corporation phone calls and emails and to know who is making a big money deal with who, so they can make money off that information."  He said "The rest of it is boring to them and they couldn't care less what people think.  It is all about money."  He said all that is going on from the top down is not about money, it is simply about Control of the people.  They have more money than they can ever spend it is the control and power and making downtrodden slaves of the people."


Time to go cry into the the Sun for what all our family gave so America could be free, and a place of sanity to grow up in for their children. Sad unreality that it is now facing a babylonian evil govt declaring WAR on it's own citizens, set up to happen and helped by every evil force in the world that stands ready to pillage the beast after it kills itelf.

One day at a time...may some day sanity prevail again in a corrupt world about to kill itself.

Insanity does as insanity is.


BlueStreet's picture

TG for Backpage on days like these.  

suteibu's picture

Like watching an explosion at 100,000 fps.

Sudden Debt's picture


gotta.... keep... interest... rates ... low.... must ..print....uuuurrrrrggggg.......

They'll soon print for sure :) they can't have interest rates go up and risk deflation. They'll never allow it.

El Hosel's picture

... Well, looks like boyz are linning up for another squirt to 1540 or so based on the late day jamm. The roller coaster has been jugging slowly up the hill from 1350 (Dec 31 2012), the ride down will be much more exciting. Of cousre that kind of thing is not allowed at this time.

John Law Lives's picture

"It seems the sequester is being priced into defense stocks - but the rest of the market (bonds and stocks) are ignoring it for now..."

The ONLY thing that seems to be "priced into stocks" is the Chairsatan keeping his goddamed lead foot on the gas pedal.

chump666's picture

Awaiting the retail fleece that may not happen, I am skeptical a flood of dumb money will enter the market now.  It's just a HFT and a leveraged up Wall Street trading on central bank hopium.  That is it.  If this thing decides to try and break out again, it's 2007...then onto 2008.



fonzannoon's picture

anyone watching all these stocks getting destroyed ah? wow.

Cunnial's picture

Bonus Bitchez...!

razorthin's picture

The ES is at the top resistance of a rising wedge formed from the 2011...

Oh forget it.

rokka's picture

Wow, ZN said something useful about trading. 

JJSF's picture

Posts like this are the reason i come to ZH. But we dont see as many of them lately.

Please Tyler, solid market analytics posts like this more often..


The HY/S&P has been screaming at me for a couple weeks now. Take a 5 year chart and you wont see a spread this wide.




orangegeek's picture

SP500 hourly caught in 20 point range - for the last three weeks.




This market is going nowhere fast.  One last push up before the collapse.

MFLTucson's picture

Yes, the American shit on Wall street is doing all they can to hold up the only economy we have left!  One built on fraud and deception!  Great Job Obama!