Stocks Drop Most In 2013 As Gold Is Crucified On The Death Cross

Tyler Durden's picture


A strange sea of red inhabits the screens of many traders and investors across the USA this evening, and all it took was for the FOMC to hint that the punchbowl will have to be taken away at some point in the future. Biggest jump in VIX in 2013; biggest plunge in Homebuilders in 8 months (as TOL misses and Starts were ugly); biggest dump in stocks in 2013; Gold plunges to $1565 and suffers Death Cross; USD soars and crosses above its 200DMA; and oil has frantic flash crash early on. Not a pretty day as stocks drop below the lower edge of their up-trend channel for the year and test critical support amid the highest volume of the year. The four words on everyone's lips this evening: Where is Kevin Henry?

S&P 500 futures uptrend is broken...


and remains at a critical support...


as Gold 'death crosses' - with its 50DMA crossing under its 200DMA...


Stocks still have quite a way to go to catch down to credit for the year but our HYG-SPY compression trade is doing well so far...


and VIX seems far less excited - as today saw its biggest snap higher since the 12/28 fiscal cliff concerns...


Homebuilders were monkey-hammered its 50DMA


As the initial selloff in rates post-FOMC hurt Utilities but then the hawkishness sent risk-on sectors reeling...


USD soared as GBP was dumped early on - post FOMC strength was sustained...


Charts: Bloomberg and Capital Context

Bonus Chart: If credit turns out to be even modestly correct - which we have seen again and again - then the following relative sector rich/cheap from Capital Context provide some insight into just how frothy stocks have become (relative to credit). Remember this is not saying that, for instance, the S&P is 2.1% overpriced - it is saying the S&P is 2.1% ahead of credit markets (and as selling progresses so credit will likely feel further pain). The biggest divergence is in homebuilders...

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Wed, 02/20/2013 - 18:02 | 3261299 BigDuke6
BigDuke6's picture

Very interesting.

Thu, 02/21/2013 - 01:20 | 3262346 dr.charlemagne
dr.charlemagne's picture

If the Fed stops printing, the US government will default, the dollar will collapse and gold will be the only salvation.

Wed, 02/20/2013 - 17:27 | 3261177 Randall Cabot
Randall Cabot's picture

Who's Ethel Merman?

Wed, 02/20/2013 - 17:32 | 3261195 Charles Wilson
Charles Wilson's picture

John Galt's party doll?



Wed, 02/20/2013 - 17:40 | 3261223 falak pema
falak pema's picture

she thought she was Jonny weismuller but she floated like the titanic before the ice  and sang like the mermaid. 

She was lucky the shark, JAws, never got to her! 

Wed, 02/20/2013 - 17:40 | 3261225 Temporalist
Temporalist's picture

Everything's Coming Up Roses

Wed, 02/20/2013 - 19:01 | 3261467 EclecticParrot
EclecticParrot's picture

(Sigh)   Guess it's time for me to start using the 50+ section of ZH  ...

(damn youngsters, when I was your age we didn't have computerized trading; if we wanted to buy a stock we trudged through 2 feet of snow with a wheelbarrow of cash to the broker's office, which was always on the 15 th floor.  And please don't post another entry asking "what's a wheelbarrow?" I feel old and useless enough already ...)

Wed, 02/20/2013 - 17:29 | 3261189 adr
adr's picture

It's ok, I'm sure there will be an invisible catalyst to pump ES up 50 points overnight again.

Remember that morning that launched the two months of lunacy?

Wed, 02/20/2013 - 17:29 | 3261190 Melson Nandela
Melson Nandela's picture

tomorrow all the lemmings will be buying the dip. just a short term trading opp., as always. but now i am really relaxed shorting around 933 on the /tf when it double tops. today was a preview of the future...still a few weeks away....

Wed, 02/20/2013 - 17:33 | 3261199 Spastica Rex
Spastica Rex's picture


Wed, 02/20/2013 - 17:38 | 3261206 falak pema
falak pema's picture they say in french meaning...being duped.

goldilocks down to 1578...

Wed, 02/20/2013 - 17:55 | 3261267 jimmyjames
jimmyjames's picture

goldilocks down to 1578...


Actually a low so far of 1558-I have 1556 as support--the same price as 6 short months ago-

Guess we'll have to wait and see about duped huh--we'll talk then?

Wed, 02/20/2013 - 17:57 | 3261278 falak pema
falak pema's picture

talking is free!

speculating isn't...I know...trying to protect hearth n home.

Wed, 02/20/2013 - 18:07 | 3261318 jimmyjames
jimmyjames's picture

talking is free!

speculating isn't...I know...trying to protect hearth n home.

Not a worry in the world...God

Wed, 02/20/2013 - 17:34 | 3261205 alien-IQ
alien-IQ's picture

Tomorrows "surprise" "better than expected" (wink wink nudge nudge) employment numbers will probably send the S&P soaring to glorious new highs because...just fuckin because ok?

The S&P just barely broke below the 10DMA for only the second time in 2013 and is still miles above the 50DMA.

Wed, 02/20/2013 - 18:01 | 3261295 Village Smithy
Village Smithy's picture

I tend to agree. After what we have witnessed over the last 4 years (ie. the conversion of the Russell 2000 to the Obama 2000) I don't think we will return to reality without some major conflagration.

Wed, 02/20/2013 - 17:35 | 3261209 hannah
hannah's picture

man if gold went down to $300 i would buy a shit load....! gold being forced down in price is a good thing......

Wed, 02/20/2013 - 17:40 | 3261224 Dr. Richard Head
Dr. Richard Head's picture

Unless one took delivery of $250k gold last month after paying late December prices.  Potato, potahto, I know, but it still would fucking hurt when looking at these numbers......

Wed, 02/20/2013 - 18:18 | 3261354 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

This is one of the few things that scare me about the precious metals buyers.  

That and the belief that falling prices proves phys and paper are disconnecting somehow which leads to falling comex prices being proof that buying gold/silver yesterday was smart.

It gives me that split second pause and makes me wonder what else these guys aren't thinking about.  I get that in the long run a 10% correction or ever 20% correction means nothing, but its like the further it falls, the more I hear about how the cartel is really on the ropes now. 

If gold falls below $1,500 I would expect mass suicides among commercial comex short sellers according to this narrative.

Wed, 02/20/2013 - 18:27 | 3261381 hannah
hannah's picture

listen dick head...can i call you dick head..? anyway. when the shtf and paper money is worthless, gold will be worth how much an ounce...? if anyone is buying gold for short term trades well they will be whipsawed many times before the collapse.....

Wed, 02/20/2013 - 18:45 | 3261415 Lore
Lore's picture

Put it this way. Taking physical out of the system, nobody can Corzine your ass, and it's easy to sleep at night.

Wed, 02/20/2013 - 17:36 | 3261210 giggler123
giggler123's picture

Well if they are gonna give Germany back their gold, they are gonna have to buy it on the open market, heaven forbid.  That means prices have to come down?  Browns bottom.  300$US/oz keep it comming...

Wed, 02/20/2013 - 17:37 | 3261214 Ned Zeppelin
Ned Zeppelin's picture

Explain how to play HGY-SPY compression trade.

Wed, 02/20/2013 - 18:12 | 3261338 Panafrican Funk...
Panafrican Funktron Robot's picture

I know you got down arrowed, but it's actually a good question.  The "duh" answer would be long HYG - short SPY, but this rests on the assumption that corp bonds are going to hold up better than stocks.  If you buy into the idea that bonds are a bigger bubble than stocks, then you would hate this trade.  

Wed, 02/20/2013 - 17:38 | 3261220 Uncle Zuzu
Uncle Zuzu's picture

Think of a long gold position as an act of revolt against the Fed.  Of course, not all revolts succeed.  Many get crushed.

Wed, 02/20/2013 - 17:41 | 3261227 Piranhanoia
Piranhanoia's picture

You are invited to the biggest sale since ATT in the 1910-20's or Xerox in the 1960's. You don't have to bring anything but cash and trade it for something that isn't paper this time. The legendariest of traders said this was going to happen when the bottom fell out of the unicorn positivity support division of your governedmints.  He said it will indicate a 180º shift.  You only lose if you buy paper during the change, or jump ship in mid ocean.  Relax and enjoy.  Remember, no zombie hunting.

Wed, 02/20/2013 - 17:43 | 3261233 Iam Yue2
Iam Yue2's picture

Where's Hugh Hendry?

Wed, 02/20/2013 - 18:33 | 3261393 reload
reload's picture

Alass poor hugh?

long gold - short s&p will not have been a good start to 2013.

But don't forget he's good at building positions through options strategies. So probably it is not as ugly as it could be - don't worry about him too much!

Wed, 02/20/2013 - 17:43 | 3261234 PUD
PUD's picture

Do you know how many times over the years I've heard the terms "critical support" and "death cross"?  Do you know how many times they were predictors of the future even in the short term?

There is no such thing as any widely known t/a. it is an irrational construct

Not saying that we don't go to dow 400 in the 100 bear market...I believe we do...but technical analysis is voodoo and meaningless

Wed, 02/20/2013 - 18:55 | 3261441 Lore
Lore's picture

I tend to agree, but they would argue that your sentiment is toppish because it "fits the current wave 3 of a 5 wave non-confirmation...." Anyway, the interpretation is always backward-looking. Show me one chartist who could really use a chart to predict market events. I'll stick to voodoo and astral projection.

Wed, 02/20/2013 - 17:45 | 3261240 bnbdnb
bnbdnb's picture

Gold always leads.

Wed, 02/20/2013 - 17:46 | 3261244 PUD
PUD's picture

no it doesn't. no two times and situations are ever the same. we are at a truly unique crossroads in human history let alone market history. relying on any past performance is a sure fire way to blow yourself up

Wed, 02/20/2013 - 17:52 | 3261255 bnbdnb
bnbdnb's picture

Stops / limits help.

Its been working. And if I am wrong, it won't be the first time.

Wed, 02/20/2013 - 17:46 | 3261242 Miss Expectations
Miss Expectations's picture

So I ask myself, would I trade 100 gold eagles for a $150,000 house?

Wed, 02/20/2013 - 17:55 | 3261268 falak pema
falak pema's picture

where can you find a 150 000 $ house? Not even in spain today, inspite of crash.

Wed, 02/20/2013 - 17:58 | 3261280 Temporalist
Temporalist's picture

You could get 150,000 homes for 100 eagles in Detroit.

Wed, 02/20/2013 - 18:26 | 3261377 aardvarkk
aardvarkk's picture

I bought a pretty nice 3 bed 1.5 bath house in August for $112,000.  Single car garage, but fenced back yard, nice neighborhood and full basement.  House prices in flyover country aren't what they are on the coasts...never have been.

Wed, 02/20/2013 - 18:39 | 3261405 FeralSerf
FeralSerf's picture

There's plenty of them in California, even in some pretty nice areas in the central valley.

Wed, 02/20/2013 - 18:48 | 3261427 WillyGroper
WillyGroper's picture


Thu, 02/21/2013 - 02:36 | 3262429 delacroix
delacroix's picture

Wed, 02/20/2013 - 20:13 | 3261653 HoaX
HoaX's picture

So I ask myself, would I trade my nice 150.000$ FIAT bought house in Southern Europe, with a good quality watermine and a fertile plot of land plus plenty of sun for your gold when the shit really does hit the proverbial fan?

Or heck, even trade one of my nice egg-laying hens for a single one of your eagles?


Wed, 02/20/2013 - 21:32 | 3261861 jomama
jomama's picture

houses don't heat/maintain themselves.  neither do livestock.

it's nearly impossible to envision what barter trade would be like if the shit really did hit the fan globally.  i'll stick with something far more portable.

btw, your avatar suits you quite well.

Wed, 02/20/2013 - 22:10 | 3261929 HoaX
HoaX's picture

Thx for the compliment I guess.

Livestock tend to heat themselves quite well as a matter of fact when provided a bit of shelter. So does my house with a bit of wood in the fireplace. Southern Europe doesn´t equal Siberia as you might know, hence my reference to a place like that to buy property.

Your avatar suits you rather well too by the way, since that will be what you are going to end up looking like if you go all-in on gold or silver ;]

Wed, 02/20/2013 - 23:19 | 3262117 jomama
jomama's picture

4/10 on the trolling attempt.  but i am interested in one point of yours: that is where in southern europe you can buy a house with property enough for livestock and access to cords of wood for 150,000 bennybux?

Thu, 02/21/2013 - 10:41 | 3263080 HoaX
HoaX's picture

With the way you are debasing your currency compared to the Euro, I have to admit fewer and fewer places rapidly.

For the rest, do your own research. I know a couple places on the top of my head where you can find a decent house, with solar panels, a windmill, generator, it´s own watermine plus a stream and 1+ hectare of fertile land, part of it forest for +-100k Euros.

Wed, 02/20/2013 - 17:47 | 3261245 busted by the b...
busted by the bailout's picture

If they don't stop the sequester soon, recession is locked in.

The Fed's plan is beginning to wobble.

Wed, 02/20/2013 - 17:48 | 3261250 PUD
PUD's picture

If they stop the sequester then oil goes to $150 and the usa credit rating goes down several notches

Wed, 02/20/2013 - 17:48 | 3261247 SumSUN
SumSUN's picture

I bought silver egles today up here in White Rock B.C. for $32 canadian!  It feels like it is 2011!



Wed, 02/20/2013 - 17:52 | 3261260 PUD
PUD's picture

I count 5 previous "uh ohs' on the chart where the line was broken and "critical support" was taken out...then the market went on to new highs...just saying....charts do not predict anything. They tell you where you've been and nothing more

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