POMO-Less Day Plunges Stocks And Precious Metals. VIX/VWAP Save The Day

Tyler Durden's picture

JPY dumping early as G-20 showed they were as much use as a chocolate fireguard. Precious metals (then the rest of the commodity complex) cracked lower in the pre-open and USD strength but vol-crushing was not taking a day off and VIX-compression led S&P futures to test new highs (actually a tick off the week's highs) on dismal volume. Treasury yields pushed higher (though we note the 2s10s30s butterfly was the main carry driver). Correlations in general drifted lower as stocks slipped gently off their highs on mixed ECO data. As Europe closed, selling began but we noticed an odd thing - the selling continued - it was a non-POMO day!

Then the WMT news broke and there was no POMO ammo to soak up the selling as the stock chipped away chunks of the Dow. AAPL slid too hurting the Nasdaq. The S&P tested the week's lows (and into the red) as ES dropped over 10 points high to lows - truly terrifying in this age of 1pt close to close shifts - but sure enough, the huge volume surge into the downturn was tickled all the way back up (as stocks tried to recouple with their more exuberant VIX neighbor) and touched VWAP into the last few minutes.

VIX selling pressure into a long-weekend is not unusual but to new multi-year lows is becoming farcical. Gold -3.5%, Silver -5%, 10Y +6bps, USD +0.3%, Oil Unch, S&P +3pts, VIX -0.5vols. Quite a week of volumeless lethargy as the S&P 500 closed 1518, 1517, 1519, 1520, 1521, 1518.

FX markets saw USD vacillate modestly with GBP winning the currency war this wqeek and JPY giving some losses back..


S&P 500 futures drifted lower after the European close and saw no bid come to the rescue - then WMT hit and set it tumbling to the week's lows - of course - a late-day VIX slamming party saved the day and got stocks back to unch and VWAP...


and even though S&P decoupled level-wise - the post-WMT VIX slam saved the day...


buit today was all about Gold and Silver (and the JPY)...


Across all asset classes, Capital Context's CONTEXT model showed far less exuberance all day long and when stocks plunged on the WMT news that is exactly where they found support - before taking off into the close once again... ETFs (upper left) tracked each other well though offering a few small arb opporunitities - though overall credit underperformed once again...


Favorite tactical trade remains long 3x HYG vs 1x Short SPY...


Charts: Bloomberg And Capital Context


Bonus Chart: Quite a day of testicle-clamping for HLF shorts - ended alright once Icahn opened his mouth on TV...


Bonus Bonus Chart: Gold and Global Central Bank Balance Sheets losing their mojo for now...

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Lady Heather...UNCLE's picture

I hate to sound conspiratorial and totally reject the nonsense Gulf of Tonkin, JFK, 911 anti establishment nonsense, but I am beginning to suspect a little (only a smidgeon, mind) of  market manipulation.

Cdad's picture

<got it Tyler>

Eh?  That is unpossible. 

francis_sawyer's picture

Cut your fears... IN HALF... Due to the Chinese New Year...


Then ~ Divide by ZERO if you REALLY want to have some fun...

Randall Cabot's picture

Today, 2-15, was a POMO settlement date day from the 2-14 operation date day------do any gurus here know what day the POMO money goes into stocks??? The operation date or the settlement date???

Cdad's picture

Umm...good question.  However, also irrelevant.  There are no market rules anymore, just a wink and a nod and $2 billion a day to keep these dead banks flipping worthless stocks back and forth to one another while The BlowHorn [CNBC] perpetually repeats the lie that all is well, and our recovery is just around the corner, and the BLS and every other incompetent government agency fudges the actual economic data, and corporations GAAP their way to earnings "beats," while posting perpetually recurring "one time" charges on the non GAAP line, which is soon to become illegal to report, I think.

So who cares whether or not your bank actually has settled funds?  Just add seven digital zeros and trade way, man.


Say What Again's picture

Is there anyway someone (like Nanex) can identify who is responsible for these late day ramp-a-thons?

Basic Question: Who is buying this shit at the end of the day?

Mr Lennon Hendrix's picture

Uh, the Gulf of Tonkin was admittedly a false flag by McNamara, JFK's alleged shooter shot through a tree from behind JFK but his head went back and to the left, WTC Building 7 was the first building to ever fall due to fire, and of course there is market manipulation, it isn't hidden.

Shirakawa publically announced the BoJ was buying ETFs years ago, the BoI announced it bought AAPL last year, and the President's Working Group has been trading the markets since 1987.

Executive Order 12631--Working Group on Financial Markets:


busted by the bailout's picture

What tree?  The view from the sixth floor of the TSBDB always looked unobstructed to me.


Randall Cabot's picture

This is the book on JFK assassination, you'll know who did it after reading this book and you can read it all here:




Final Judgment is, beyond question, the most"controversial"—and certainly the most widely denounced—book on what is perhaps the most written- about subject in American history . . .

Yet, most of those who have so hysterically condemned this book have never even read it . . .

Critics viciously attack the author, but they refuse to debate him . . .

This is the one book on the JFK assassination that no major publisher dared print . . .


A. Magnus's picture

The Gulf of Tonkin was a DOCUMENTED fraudulent event. LBJ commited treason and you love him for it. If you are so dumb that you believe that 1 guy could defy the laws of physics and fire three rounds from a bolt action rifle faster than marine marksmen could do during a re-enactment of the JFK assassination there is little hope for you. If you're dumb enough to believe that 19 guys smuggled in on CIA visas, trained in US military bases and who according to their flight instructors were incapable of landing the jets they supposedly hijacked somehow got the entire US air defenses to stand down and let them hit us without so much as an interception while flying over a dozen military airbases then you are beyond a dumbass, you are a politician!

Smelling the coffee about market manipulation, while a positive first step, doesn't counteract the idiocy of the first part your statement...

Savyindallas's picture

I have to disagree-there are a lot of dumbasses who are not politicians who believe all this, While they could be learning about the truth they are instead all sitting watching the finals of Dancing with the Retards, of jacking off to some porn website or whatever.


Savyindallas's picture

Gulf of tonkin is now admitted to be a fraud (as were the false flag incidents for every war we have been in the last hundred years) If you believe the lone nut assasin theory of JFK based on the magic bullet fantasy, or the ludicrous governmet conspiracy theory on the 19 hijackers on 911-you truly are ignorant and I suggest you STFU.

Cdad's picture

JPY dumping early as G-20 showed they were as much use as a chocolate fireguard.

Lolololol.  Good line.

Funny how no one was talking $HLF after Icahn's second entirely embarrassing TV appearance on the matter.  Last night, they were paying up 24% on the news of Carl's position.  Stock closes today up 1%.  Bonus chart?

Cdad's picture

There you go...and check that $HLF volume today!  Yeah, no one was using an Icahn TV appearnce to dump stock....no...no.

I think Carl "my 13 D[ick] is bigger than yours" Icahn should be on tv EVERY DAY!

I personally think $HLF is a crap stock....but the point is made...this is how the non market works...with algo's crawling over bullshit shoveled on TV or  online, buying without a single fundamental reason...as Carl himself copped to when he admitted that he buys stock all the time without doing research.  Yeah!  Thanks for telling it like it is, Carl.  Very fucking refreshing!


jcaz's picture

Carl is already probably gone in this trade- he made his money already,  I doubt it was a coincidence that he did this interview on options expiration day.....

bonzo112358's picture

Let me be the first bear to congratulate the bulls on surviving such a brutal correction.  And did I learn my lesson?  'sigh' no of course not.  I still have yet to make that sacrifice to the short gods.  Another week of this and I may just do that. 

BooMushroom's picture

Sale today on silver, bitchez!


adr's picture

Humans sell, the algo computers buy, simple as that.

The algos are programmed to get certain stocks to a certain price at a certain time. If you get an hour or two of real selling, it just makes the algos work harder to bring the market back to where they were programmed to take it.

But, no. The regulators would never allow the market to be manipulated like that.

bonzo112358's picture

They would if the market went lower.  But because things are going higher no one is going to complain...as usual.  But as soon as the market goes down its the computers and the short sellers fault.

Harbanger's picture

You're really expecting the markets to go higher?  I think the big investors are selling their positions and cashing out.  They're shorting the markets in anticipation of a sell off.

busted by the bailout's picture

I hope you all enjoyed and profited from today's correction. 

You gotta be quick to make any money on the dark side these days. 

Sad to think, but perhaps that was our last chance?

papaswamp's picture

...and the govt added $50Billion to the debt just this week.

disabledvet's picture

The other "financial currency" (apart from the dollar) is the Yen. If that euro craters I think taking the other side of "the thundering billionaire trade" could be quite profitable actually. Indeed the collapse of the euro probably goes a long way towards explaining why the Yen has until quite recently been one of the best performing currencies (in spite of Fukushima amazingly enough. Which is yet another reason to be long in a way...can't rebuild with a worthless yen. Makes talking down the yen seem rather odd to me actually...

thismarketisrigged's picture

its gotten to a point where its comical to watch rather than depressing.


when we had that mini sell off today from like 2-315 or so, i was excited.


however, towards the final minutes when i saw the down - 3 pts , rather than just hoping it finished in the red by 10 pts, i was actually hoping it would finish green just so i can laugh, and sure enough it happened. always good for a good laugh.

EclecticParrot's picture

Yeah, the past 6-8 weeks have been the most difficult to day-trade in the past 2 years -- ludicrous volume and zero range allow the algos to stop any nascent move in its tracks, while any serious breaks seem to happen in single-candle slam moves with the immediate buy-the-new-low program (created personally by Satan) kicking in before profits can be taken.  It used to be staying out from 12:30 - 2:30 was advisable for the small fish --  now it seems this is the only time things move.  The only thing that saved me today was to go against my indicators (and trading principles) and guess at a 3:15 move back to VWAP.  As we all know, developing bad trading habits to conform with what will likely be a temporary stasis isn't worth it.  So, trade lightly, suffer silently a few weeks more, and hopefully by mid-March we'll be back to at least mediocre markets.

(In this regard, I suspect there'll be a 200+ point down move soon, only to sucker in larger shorts, after which we'll rocket to more significant highs before any true "correction" can happen.  Can't imagine the algos themselves, though inanimate, aren't sick of this 1-point per day levitation.  Even so, things seem simply tired, and I don't believe we can break sharply down purely from boredom, can we?)

SheHunter's picture

ARE there any other day traders out there besides the HFT's?  I am beginning to feel like a dinosaur.  Caution: everyone is expecting a 200 slide followed by a good ramp to the market.  Hedge hedge hedge

Lady Heather...UNCLE's picture

...re my earlier comment, I was being sarcastic ...c'mon prople, get with it