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Market Plunges As European Crisis Is Back

Tyler Durden's picture


JPY saw a massive correction today - gaining 3% against the USD - its biggest single-day gain since May 2010 - dragging all the carry traders with it. S&P 500 futures volume exploded to its highest since the rally began in November as it broke its uptrend and slumped 40 points from its intraday highs. VIX's term structure collapsed to its flattest in 18 months as spot surged above 19% (no - everyone wasn't hedged). The Dow, S&P, and Nasdaq are all red for the month and even the Trannies are almost unch. Treasuries soared with 10Y ending -10bps (after being +4bps at its worst of the day). Gold and Silver surged (with the latter testing near $1600 again) as WTI dropped 1%. Homebuilders (not helped by lumber's price collapse) dropped 3.5% but every sector was ugly today and closed at its lows.

S&P futures lost their gains for Feb, broke their uptrend dramatically on heavy volume and large trade size, and are heading towards QE3 levels...

S&P 500 futures crashed 40 points from intraday highs


The month of Feb just went red...


VIX term structure collapsed and VIX rose to its highs of the year...

Stocks finally caught down to Bonds' 'implied' weakness into the closing minutes as Gold held up near its highs of the day...

FX markets were a mess... EUR dumped over 1%...


as JPY exploded around 3% higher on the day - implying a serious session for Japan overnight...


Gold and Silver gained almost 1% on the day - even as the USD rose - but WTI dropped back towards $92...


Cross asset class correlation surged as the slide accelerated late on and stocks caught down to Capital Context's CONTEXT model...

And finally, the exuberance of the equity market is catching back down to the less sanguine credit market just as we suggested...

Bonus Chart: While we have been told to expect a 13,000 Nikkei 225 level by the end of March - and we are sure Abe and his pals are watching FX markets closely - today's 3% crash higher in the JPY against the USD will have a few hearts racing as Japan opens this evening. Based on the last few weeks of highly correlated action between the Nikkei and the JPY, the current levels would tend to imply a drop of over 600 points on the main Japanese equity index or around 6%. Cue, BoJ nomination withdrawals in 3...2...1...

Japan closed happily higher last night, safe in the knowledge that all is well and fixed in Europe...


How things change...


Charts: Bloomberg

So to summarize, this is what just happened courtesy of Brokers with Hands On Their Faces

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Mon, 02/25/2013 - 17:10 | 3275102 Motorhead
Motorhead's picture

It's the weather.

Mon, 02/25/2013 - 17:27 | 3275188 TruthInSunshine
TruthInSunshine's picture

Fret not. Bernanke's 'Virtuous Circle' macroeconomic toolbox will levitate every "market" and "asset class" indefinitely and make every "investor" a winner (no more business cycles, falling markets, asset classes or losing sides of trades in Bernanktopia).

Step right up.

Mon, 02/25/2013 - 17:31 | 3275215 francis_sawyer
francis_sawyer's picture

LMAO ~ Gotta LOVE those stock footage pics of traders with their heads buried in their hands...


ht Tyler(s) ~ nice add, always good for a few laughs

Mon, 02/25/2013 - 17:33 | 3275227 saints51
saints51's picture

Made my day also. hahahahahaha mother fuckers!!!

Mon, 02/25/2013 - 17:40 | 3275239 francis_sawyer
francis_sawyer's picture

Comedy Central couldn't touch ZH with a 100 foot pole...


Umm ~ perhaps RHETORICAL, but notice that all the American Flag patches have gold fringe around them... Just sayiin'

Mon, 02/25/2013 - 17:40 | 3275254 BKbroiler
BKbroiler's picture

better a bunga bunga than a banker, says the people of Italy.

Mon, 02/25/2013 - 17:44 | 3275274 BoNeSxxx
BoNeSxxx's picture

"Gold and Silver surged (with the latter testing near $1600 again)"

The latter?  I WISH!

Mon, 02/25/2013 - 17:48 | 3275302 saints51
saints51's picture

@Francis - Nope it couldn't touch it. We must of got our red arrow by one of those cocksticks in the pictures. hahahahahaha bitch!!! Not our fault you buying at retail prices.

Mon, 02/25/2013 - 17:51 | 3275316 NotApplicable
NotApplicable's picture

Dem flags are to remind dem of the "freedom" they enjoy.

Mon, 02/25/2013 - 17:59 | 3275373 saints51
saints51's picture

must pay tribute to the crown.

Mon, 02/25/2013 - 17:53 | 3275334 Pseudo Anonym
Pseudo Anonym's picture

good eye

American Flag patches have gold fringe around them... Just sayiin'


Mon, 02/25/2013 - 18:03 | 3275391 francis_sawyer
francis_sawyer's picture


Mon, 02/25/2013 - 18:03 | 3275392 francis_sawyer
francis_sawyer's picture


Mon, 02/25/2013 - 18:35 | 3275510 Stoploss
Stoploss's picture

A gold fringed flag represents no nation and no constitution.  99% don't know that. Including the Congress.


Fits perfectly with the current coup.

Mon, 02/25/2013 - 17:42 | 3275262 DollarMenu
DollarMenu's picture

Could it be the Full Moon?

Mon, 02/25/2013 - 19:42 | 3275751 Tango in the Blight
Tango in the Blight's picture

They should just take some happy pills and stay positive. Remember a pessimist is never right!

Mon, 02/25/2013 - 17:32 | 3275221 Stoploss
Stoploss's picture

Shit it's hot in there! 

JPY on FIYA!!!

Mon, 02/25/2013 - 17:39 | 3275250 mind_imminst
mind_imminst's picture

This is a great sarcastic post, but there is definitely truth to it. The governments of the world and markets are addicted to central banker largesse. Steep drops in the market will be met with more printing and deficit spending. It has "worked" for 4 years. Every 5 to 10% dip is met with new avalanches of liquidity. Yes, they can print (and borrow) infinite amounts of digital fiat and the nominal price of stocks will continue to soar (long term). I am hanging on to my short position until we get into that 5% to 10% drop range, then I am going cash out and go long with leverage on the S&P in a strenuous attempt to stay ahead of inflation with my "play" money.

Mon, 02/25/2013 - 22:04 | 3276193 Buck Johnson
Buck Johnson's picture

The faces say it all, where screwed.

Mon, 02/25/2013 - 20:04 | 3275814 GOSPLAN HERO
GOSPLAN HERO's picture

A crop failure in the USSR caused this! 

Mon, 02/25/2013 - 17:10 | 3275105 bank guy in Brussels
bank guy in Brussels's picture

Damn right euro crisis is back !

Euro break-up process has started ...

Thank God !

Mon, 02/25/2013 - 17:11 | 3275106 RockRiver
RockRiver's picture

Bernank will save us


Mon, 02/25/2013 - 17:31 | 3275219 fourchan
fourchan's picture

He is saving us, by killing us.

Tue, 02/26/2013 - 01:08 | 3276664 goldfish1
goldfish1's picture

Preserve the forest by cutting it down and replanting.

Mon, 02/25/2013 - 17:35 | 3275233 JustObserving
JustObserving's picture

Bernanke has to start printing $150 billion a month to levitate this market and at least $50 billion a month for Europe.  All those idiots worried about the printing ending soon will change their tune tomorrow.

QE forever.  Gold to $2000 and silver to $40 easily this year.

Mon, 02/25/2013 - 17:54 | 3275346 Five8Charlie
Five8Charlie's picture

Gas to $8/gal.

Mon, 02/25/2013 - 17:11 | 3275109 swissaustrian
swissaustrian's picture

Seems like the 2007 records are gonna be with us for a while longer

Mon, 02/25/2013 - 17:11 | 3275111 Shizzmoney
Shizzmoney's picture


Mon, 02/25/2013 - 17:11 | 3275112 natronic
natronic's picture

Back?!?!?!  I never realized it was gone.

Mon, 02/25/2013 - 17:11 | 3275113 Nothing To See Here
Nothing To See Here's picture

Italy is just an isolated case. Believe us, Greece, Portugal and Spain are totally different.

Mon, 02/25/2013 - 17:31 | 3275216 Winston Churchill
Winston Churchill's picture

Lest we forget:Italy,France,Cyprus,Malta are so totally different as well.

Mon, 02/25/2013 - 17:48 | 3275304 Vooter
Vooter's picture

Ireland is SUPER different...

Mon, 02/25/2013 - 17:35 | 3275234 JR
JR's picture

Reuters --ROME | Mon Feb 25, 2013 3:54pm EST

“A bitter campaign, fought largely over economic issues, made some investors fear a return of the kind of debt crisis that took the euro zone close to disaster and brought the technocrat Monti to office, replacing Berlusconi, in 2011.

“The projected results showed more than half of Italians had voted for the anti-euro platforms of Berlusconi and Grillo.”


Mon, 02/25/2013 - 17:12 | 3275114 Euro Monster
Euro Monster's picture

Guess who's back, guess who's back! Rooooar! Was here all the time by the way!

Mon, 02/25/2013 - 17:12 | 3275115 Calidreaming
Calidreaming's picture

ABOUT FUCKIN TIME!      FUCK YOU BERNANKE!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Mon, 02/25/2013 - 17:34 | 3275228 Kaiser Sousa
Kaiser Sousa's picture

Hey Cali..

thats trademarked...check please...


Mon, 02/25/2013 - 17:12 | 3275119 Debeachesand Je...
Debeachesand Jerseyshores's picture

I think it was those topless Italian female protesters that cause the slide today.

Mon, 02/25/2013 - 17:40 | 3275256 NotApplicable
NotApplicable's picture

I thought they were Ukranian? Or have they branched out?

Those ladies were some fighters. I LOLed hard at the one upside down in the police vehicle halfway out of the door. Had she been successful, she'd landed right on her head.

Too bad they aren't this engaged about something real, rather than fake elections for a fake government.

But hey, topless protesters keep the facade all shiny too!

Mon, 02/25/2013 - 18:19 | 3275450 tenpanhandle
tenpanhandle's picture

ahem...in the interest of staying fully informed, please direct me to these...ahem...historical documents.

Mon, 02/25/2013 - 18:57 | 3275590 francis_sawyer
francis_sawyer's picture

The Ukranian ones at Davos were hotter...

Mon, 02/25/2013 - 17:13 | 3275122 francis_sawyer
Mon, 02/25/2013 - 17:18 | 3275123 Number 156
Number 156's picture

Someone set the curtains on fire.

Even Karl Denninger set his tickercon to 1.

We will have to see how the Asian markets take this. IMHO, If they go down more than 2% average, run.

Mon, 02/25/2013 - 17:21 | 3275163 buzzsaw99
buzzsaw99's picture

Even Karl Denninger? That dude has been on defcon infinity for like fifteen years.

Mon, 02/25/2013 - 17:43 | 3275270 Number 156
Number 156's picture

Even Karl Denninger? That dude has been on defcon infinity for like fifteen years.

Maybe I havent been around long enough. I've never seen him put it on 1.

Mon, 02/25/2013 - 17:12 | 3275125 fuu
fuu's picture

Maybe gold leads.

Mon, 02/25/2013 - 17:13 | 3275127 thismarketisrigged
thismarketisrigged's picture

so fucking happy we are red for the month. i love this bloodbath, it was so fun watching all the red across my level 2 trading platform throughout the day, specifically the final hour.


asia is going to get slaughtered tonight, and if this bouscolini guy ends up winning, watch out, europe will implode.


bernanke speaks tomm and wed, as we speak, benny boy is prob changing up his speech and reassuing his bank buddies that he will continue qe for the immediate future.


also, fuck goldman sachs, so satisfying seeing that stock the entire day drop over 4 percent. 

Mon, 02/25/2013 - 17:17 | 3275150 francis_sawyer
francis_sawyer's picture

 "Have you tried 22 tonight?"

~ Rick Blaine

Mon, 02/25/2013 - 17:13 | 3275131 edb5s
edb5s's picture

VXX to the moon!

Mon, 02/25/2013 - 17:13 | 3275132 BlueStreet
BlueStreet's picture

Back up the truck, at least for today.  Fuck you B.B! 





Mon, 02/25/2013 - 17:14 | 3275135 Frastric
Frastric's picture

Interesting that the Dow made an intra-year high this session before reality bited...

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