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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Motorhead's picture

It's the weather.

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.

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

saints51's picture

Made my day also. hahahahahaha mother fuckers!!!

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'

BKbroiler's picture

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

BoNeSxxx's picture

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

The latter?  I WISH!

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.

NotApplicable's picture

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

saints51's picture

must pay tribute to the crown.

Pseudo Anonym's picture

good eye

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


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.

DollarMenu's picture

Could it be the Full Moon?

Tango in the Blight's picture

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

Stoploss's picture

Shit it's hot in there! 

JPY on FIYA!!!

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.

Buck Johnson's picture

The faces say it all, where screwed.

GOSPLAN HERO's picture

A crop failure in the USSR caused this! 

bank guy in Brussels's picture

Damn right euro crisis is back !

Euro break-up process has started ...

Thank God !

RockRiver's picture

Bernank will save us


fourchan's picture

He is saving us, by killing us.

goldfish1's picture

Preserve the forest by cutting it down and replanting.

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.

swissaustrian's picture

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

Shizzmoney's picture


natronic's picture

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

Nothing To See Here's picture

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

Winston Churchill's picture

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

Vooter's picture

Ireland is SUPER different...

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.”

Euro Monster's picture

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

Calidreaming's picture

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

Kaiser Sousa's picture

Hey Cali..

thats trademarked...check please...


Debeachesand Jerseyshores's picture

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

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!

tenpanhandle's picture the interest of staying fully informed, please direct me to these...ahem...historical documents.

francis_sawyer's picture

The Ukranian ones at Davos were hotter...

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.

buzzsaw99's picture

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

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.

fuu's picture

Maybe gold leads.

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. 

francis_sawyer's picture

 "Have you tried 22 tonight?"

~ Rick Blaine

edb5s's picture

VXX to the moon!

BlueStreet's picture

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





Frastric's picture

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