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FedSpeak Fails To Lift Stocks - Gold & Bonds Bid

Tyler Durden's picture





 

Despite a late-day surge on chatter from Fed's Williams, equities could not catch a bid. VIX was plundered for protection, surging to the highs of the year (above 16%) as S&P futures saw the biggest volume of the year as they held below the lowest uptrend-channel from the November lows. The Dow and the S&P bounced off unchanged for the month of Feb but the Nasdaq remains red - Materials are down over 3% as Staples are up 3% on the month (Tech/Disc/Energy unch). Gold and Silver managed solid gains on the day even as the USD pushed higher (up over 1.1% on the week even as JPY strengthens) and Oil and Copper had notable down days. Treasury yields slipped lower (-3bps) and credit markets underperformed stocks. The S&P is back at its 2011 highs in terms of Gold, and rolled over today. Cross-asset-class correlations rose all day as broad risk-off was very evident. We suspect the drop in the VIX into the close was short-term protection unwinds along with actual exposure reduction (which we saw at VWAP).

 

S&P futures lifted on Fed's Williams jawboning desperation but faded back below VWAP into the close on huge volume...

 

S&P futures lost the low end of their uptrend...

 

VIX has surged in the last two days - even with the pull back in the last hour...

 

but it appeared like this was short-term protection being unwound as underlying portfolios were right-sized. Materials are suffering in February and Staples doing great (for now)...

 

Credit and equity continue to converge...(though we note the last time HYG's intrinsic value was bid like this - red oval - we saw it drop back quickly also)...

 

Oil and Silver have recoupled on the week as the PMs rallied on the day...

 

even as the USD pushed higher - though flatlined for most of the US day-session... (up is USD strength on the chart)

 

Seems we await China/Japan once again tonight for follow-through..

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: It seems the equity market priced in real terms has found a ceiling for now...

 


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Thu, 02/21/2013 - 17:15 | Link to Comment Dr. Engali
Dr. Engali's picture

Get to work Mr. Chairman.....this is the deflation you are looking for.

Thu, 02/21/2013 - 17:37 | Link to Comment Xibalba
Xibalba's picture

Samson slayed minions with a jawbone from an ass.  Fed is an ass for sure, but slays no minion with it's jawbone

Thu, 02/21/2013 - 17:52 | Link to Comment economics9698
economics9698's picture

Where's Alan Greenspan when you need him?  /sarc

Thu, 02/21/2013 - 19:40 | Link to Comment johngaltfla
johngaltfla's picture

 

The Stock Market Crash of 1999 repeats in 2013

 

I'm just sayin'....chart patterns are pretty damned similar.

Fri, 02/22/2013 - 10:52 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Charts don't matter.  History doesn't matter.  It's different this time.  For now, anyway.

Thu, 02/21/2013 - 17:15 | Link to Comment FROZENOJFUTURES
FROZENOJFUTURES's picture

lol btfd

Thu, 02/21/2013 - 17:27 | Link to Comment Caracalla
Caracalla's picture

BTFD is dead.  The market is going down.  No QE puts the bears in charge.

Thu, 02/21/2013 - 17:31 | Link to Comment ptoemmes
ptoemmes's picture

STFR - Short the Fucking Ramp(s)?

Thu, 02/21/2013 - 17:56 | Link to Comment The Juice
The Juice's picture

STFS - Sell to Fucking Stackers

 

Thu, 02/21/2013 - 18:07 | Link to Comment McMolotov
McMolotov's picture

KTFB - Kill the Fucking Bankers

Thu, 02/21/2013 - 17:39 | Link to Comment EclecticParrot
EclecticParrot's picture

"Smarter than the av-er-age bear."

     - Yogi F. Bear

Thu, 02/21/2013 - 17:53 | Link to Comment CH1
CH1's picture

No QE puts the bears in charge.

Perhaps so, but how sure are you that no central banker, by any back-door method, won't toss in ten billion a day to keep the juicing going? 

Thu, 02/21/2013 - 23:38 | Link to Comment Edward Fiatski
Edward Fiatski's picture

Hold on... I'll get my kinky leather cop hat.

Just so you know, as the Master Papa Bear, I what you all in LATEX for today's round, bitchez.

To everyone else, who are undoubtedly still glued to CNBC: Welcome to reality, gimps.

Thu, 02/21/2013 - 17:18 | Link to Comment Cursive
Cursive's picture

"They" are going to trot out a lot of people create sellable rallies to unload "their" shit inventory of stocks.

Thu, 02/21/2013 - 17:22 | Link to Comment ebworthen
ebworthen's picture

The last time Gold went through the "death cross" of the 50 DMA crossing the 200 DMA was when equities had their 2008 Oct.-Nov. swoon.

Another article on ZH close to this one showed risk aversion in the FX markets.

I know the FED is propping the markets, and wouldn't short here, but perhaps the huge correction is imminent (despite Ben"Bunga-Bunga"mosche bullshitting about AIG on CNBC.

Thu, 02/21/2013 - 18:01 | Link to Comment Just Ice
Just Ice's picture

I could be totally off base but I suspect at this point the Fed would rather treasuries break out upside from current basing/consolidation and resume an uptrend (taking rates back down)...as opposed to perpetual uptrend in stocks being of primary concern.  Treasuries normally would've taken off with last couple days pullback in stock indices but so far they're a bit suspicious, (much like equity bears have become conditioned to expect jam jobs undoing any stock declines).

Thu, 02/21/2013 - 18:12 | Link to Comment Go Tribe
Go Tribe's picture

The last death cross was on April 18 of this year.

Thu, 02/21/2013 - 19:39 | Link to Comment Just Ice
Just Ice's picture

Ahead of your time

Thu, 02/21/2013 - 19:42 | Link to Comment ebworthen
ebworthen's picture

I think you are right for the 20 or 30 DMA crossing the 200 DMA.

I was talking about the 50 or 60 DMA crossing the 200 DMA which is a bigger downtrend.

Some good charts here:  http://www.kitco.com/charts/techcharts_gold.html

Thu, 02/21/2013 - 17:26 | Link to Comment busted by the b...
busted by the bailout's picture

The Fed's point of diminishing returns has been exceeded and it may turn negative.

I think even many on Wall Street are getting sick of the centrally planned nanny economy.

Real men yearn for reality.

Bring it on!

 

Thu, 02/21/2013 - 17:34 | Link to Comment hapless
hapless's picture

Real men don't yearn.

Thu, 02/21/2013 - 17:48 | Link to Comment busted by the b...
busted by the bailout's picture

OK, how about hanker for reality?

 

Thu, 02/21/2013 - 17:58 | Link to Comment ebworthen
ebworthen's picture

"I hanker for a hunk'a, a slab or slice or chunk'a, I hanker for hunk'a cheese!"

http://www.youtube.com/watch?v=U3jgo5ea_zc

Thu, 02/21/2013 - 18:04 | Link to Comment McMolotov
McMolotov's picture

That was the first thing I thought, too. God I feel old.

Thu, 02/21/2013 - 18:19 | Link to Comment Karlus
Karlus's picture

Real men take scores

- Neil McCauley

Thu, 02/21/2013 - 17:55 | Link to Comment WTF_247
WTF_247's picture

They are only turning negative because the algo free money train is grinding to a halt.  So much competition and the yeilds are dropping - it is becoming harder and harder to make a lot of money with algo fighting algo.  Without the public in there its essentially a zero sum game.

 

Thu, 02/21/2013 - 17:29 | Link to Comment JustObserving
JustObserving's picture

US deficits are running at $1.2 to $1.3 trillion a year and unfunded liabilities are running at $6.9 trillion a year.  That is a net total of $8.2 trillion a year.  How can the Fed ever stop printing?  Who will buy US treasuries?

Look for Fed printing to continue through 2014 while they protest loudly about the printing at every Fed meeting.  They will have printed $5.6 trillion by then.

When things get serious, you have to lie.  The Fed has been lying for years now.

If you want the truth, invert everything the Fed says.

Fri, 02/22/2013 - 10:58 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

The FED has to lie.  Or not.  If you discerned their true path, your actions would invalidate their policy.  Can't have that.  Except if you are connected.  The connected get the playbook in advance.  Because if the connected didn't prosper at your expense, then the world would collapse.

Remember, we're at war, so mum's the word, OK?

Thu, 02/21/2013 - 17:30 | Link to Comment thismarketisrigged
thismarketisrigged's picture

its so fucking funny how these douchebags on all networks, and all analysts in general consider these past few days a ''selloff''

 

the dow has not even fallen 1 percent either of the days, and the s&p has lost 25 pts total the past 2 days. this is nothing, yet i guess when the fed continues to pump fake money into the market, these are considered major losses.

 

the only sector that has been down the past few days respectfully is the nasdaq, otherwise its all bullshit.

 

u look at europe, they have been have days of down 2 plus percent, 3 percent, that although i would not consider a major selloff, are notable moves. down .77 pts on the dow is nothing, yet assholes on tv make it seem like this is the correction.

 

hopefully this is the beggining of something more substansial, but it was comical that today despite horrible economic news pretty much everywhere, the dow finishes down only 46 pts while the s&p finishes down 9 pts. i got a good laugh out of that. as long as that fucker bernanke is pumping the market, i guess no worries.

 

fuck u obama and bernanke, i wish the worst on both of u guys, and all other fed members.

Thu, 02/21/2013 - 17:43 | Link to Comment a growing concern
a growing concern's picture

Makes you miss those 4-5% down days, doesn't it?

Thu, 02/21/2013 - 18:01 | Link to Comment WTF_247
WTF_247's picture

That is because the funds are still hiding in many names and thinking to just keep adding.  There is very little net selling going on.  The Fed has essentially broadcast that anything that happens they will continue to pump the market.  So participants have removed any risk based metrics and gone all in long.  They do not bother with economic analysis any longer - bad = good, good = good - just put another 100k into the vwap buy algo and go to lunch.

It's like always bringing a parachute onto a private plane just in case of engine failure but not realizing the gas tank is leaking and the plane is about to blow up.

Thu, 02/21/2013 - 17:39 | Link to Comment A. Magnus
A. Magnus's picture

Either the 'white shoe boys' at Goldman Cartel and Co. are stacking like crazy on the past month's PM beat downs, or the Asians are stacking, or both. I wonder if the beat-downs are the result of the Chinese threatening to detonate the bond market unless ChairSatan Bernanke keeps the prices nice and low for mass buying...

Thu, 02/21/2013 - 17:45 | Link to Comment Quinvarius
Quinvarius's picture

The gold raid has the stench of nefarious accumulation.

Thu, 02/21/2013 - 17:45 | Link to Comment Al Huxley
Al Huxley's picture

Nice going Fed shitheads - looks like you can't say 'things look like they're getting better, we'll be able to stop handing out the free money soon' without breaking the markets - who'd of thunk, huh?  Why would you even say shit like that?  You know the market's basically just a bunch of fucking free money junkies now, jonesin' for the next POMO fix - oh yeah, gotta let your bullion bank buddies close out those short positions on the Comex. 

 

Go fuck yourselves - you want the market up, time to pony up more free $$$.  You'll need them anyway, to keep buying all those fucking Treasuries.

Thu, 02/21/2013 - 19:02 | Link to Comment chump666
chump666's picture

Tuff luck you dumb ass central banker losers. 

Thu, 02/21/2013 - 19:48 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Having just returned from 2014 -- the not-too-distant future for Earth's 2013.02.21 -- I can tell you that the inner club of Central Bankers (NY, London) will first convince the G7 (G8 minus Russia), then the G20 bankers that these problems "can only be solved globally and in unison"

The current 2013 process of sequential-sovereign-currency-inflation (taking turns of circling the drain) is part of this, and part of the learning process of Follow The Leader.  The move will be toward a globally coordinated monetary system -- a fiat system of SDRs -- but based on all their fiats.  Politicians in the indebted nations and their bankers will LOVE this.  Tax payers (debt slaves)... not so much.

The camp of non-indebted nations will resist the SDR of fiat-debt & enslavement and, at the urging of BRIC countries, will seek monetary policy based on a basket-of-PMs-standard.  So will libertarian-thinking people in the G7.  Libertarians resisting the global union will be branded more than 'obstructionist' and will be dealt with in the media and by LEAs/military.  But let's not drone on.  Kirk out.

Fri, 02/22/2013 - 12:23 | Link to Comment DowTheorist
DowTheorist's picture

The last chart is interesting: it suggests stocks could be making a top and gold could be making a bottom.

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