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Total Disconnect Between FX/Bonds And Stocks

Tyler Durden's picture





 

It's one of those days. The world looks on as Bernanke speaks and the S&P 500 levitates 20 points in a straight line wealth-effect-confirming way. However, it appears the FX and Bond markets just can't get excited about all this... Of course, all that matters is the foot on the neck of spot VIX (which is now back below 15%) and Bernanke's confirmation that housing has bottomed (again).

 

 

 

and the fact that S&P 500 futures just broke above the closing VWAPs from the last two plunges... look at where we bounced to on Tuesday - Monday's closing VWAP... and today, we bounced to Tuesday's closing VWAP...

 

allowing the big boys caught offside to exit?

 

Charts: Bloomberg

 


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Wed, 02/27/2013 - 13:43 | Link to Comment vmromk
vmromk's picture

HANG BERNANKE !!!!!

Wed, 02/27/2013 - 14:41 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Bernanke directed Kevin Henry to tape the "buy" button down with an entire roll of "Ashcroft approved" duct tape.

The Bernank isn't taking any chances when it comes to the risk that his "Virtuous Circle" built with uponshitload of digitized and debt derived fiatski comes crashing down before he rushes for & then slides under the exit door as it's closing (just like in a Hollywood-style ending).

Wed, 02/27/2013 - 14:44 | Link to Comment boogerbently
boogerbently's picture

The USD is down to all major currencies today, yet, gold is down. A lot.

Wed, 02/27/2013 - 14:51 | Link to Comment Mugatu
Mugatu's picture

Like it or not, Gold is in correction mode right now.  I am waiting until prices are below $1500 to buy.  Still too many gold bulls out there, and the market needs to knock a few off before it rallies over $2000 later in the year.

Wed, 02/27/2013 - 19:44 | Link to Comment hyper-critical
hyper-critical's picture

Going from 1596 to a 14-handle won't shake many bulls out - they just endured a 15% drawdown and grow more convinced by the day that things are getting worse, therefore there will be more printing, therefore gold will rise, etc (something along those lines).

As importantly, many of the real gold bulls have owned it, if not from 500, call it summer 2010, about the time 'dumb' money really started to grasp the qe thing. They're long from 1200, are 'sitting on profits,' and think it's going to play catch up to reality.

Just saying look before you leap on any pre-conceived nominal number. Shit in markets is about to get real.

Wed, 02/27/2013 - 14:52 | Link to Comment God Bless The V...
God Bless The Virtuous's picture

Hang the prick but inflict as much bodily harm as this fuck has inflicted on the working slobs of this once PROUD country!

Hey Michelle, normal REAL American's who love the Republic will NEVER be proud of the bastardization you and Barry have inflicted on the Republic. Civil War? Is that the endgame you filth?

B.T.W. Please excuse my ignorance all, but can someone explain what VWAP is and stands for?

Thankx all...

Wed, 02/27/2013 - 13:43 | Link to Comment swissaustrian
swissaustrian's picture

Perception management ahead of the Q4 GDP and initial claims numbers tomorrow

Wed, 02/27/2013 - 14:04 | Link to Comment disabledvet
disabledvet's picture

Real numbers! Wow...I thought the Wall Street was trying to ban that stuff. NEW housing has definitely bottomed...and since it will replace "old housing" (much smaller, far less costly to live in/maintain, secure,'will hold it's value better) I'm not sure that's bullish over all. Shall see tomorrow.

Wed, 02/27/2013 - 14:20 | Link to Comment Stoploss
Stoploss's picture

This is just another FED "loan explosion" day.

That's all.

Wed, 02/27/2013 - 13:49 | Link to Comment Edward Fiatski
Edward Fiatski's picture

"allowing the big boys caught offside to exit?"

Ya think, Tyler? :)

Bernanke still talking.

To the Moon and back!

Wed, 02/27/2013 - 13:48 | Link to Comment VonManstein
VonManstein's picture

If people stopped shorting this thing at any given chance and didnt dance around claiming bear victory on a 1% down day after +15% and a 1% upday in USH3 after -6.5% then this thing would come unglued much quicker.

the fact is that the market is heading for a top into march and ES 1555 will be hit at least i suspect. then US markets will decline along with the USD

why do people continue to forget the 2007 situation with falling USD and falling SPX.. its clearly in the making.

Pump and dump not finnished yet.

Deal with it

Wed, 02/27/2013 - 13:48 | Link to Comment MFLTucson
MFLTucson's picture

This whole system in the US is a fraud and anyone with a brain can see it.  It is all based upon printed money, lies, fraud, misstatement of data and outright market rigging by this Jewish Cartel.  Stocks back over 14,000 on more shit economic news and Gold down yet again on manipulation, fraud and deception by this government controlled banking cartel

Wed, 02/27/2013 - 13:49 | Link to Comment Tsar Pointless
Tsar Pointless's picture

So now it's like Monday never even happened.

I love this country. It's the greatest. In. The. World.

Wed, 02/27/2013 - 13:52 | Link to Comment Water Is Wet
Water Is Wet's picture

Everyone should have seen this 2-day lift-a-thon coming.  On all Federal Reserve days the markets will be manipulated, guaranteed;  it's a psyops thing.  If the market went down while the Bernank spoke, that would propagate the wrong message, and you sheep are fragile little creatures.

Wed, 02/27/2013 - 13:56 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Oh, believe me. I did.

Not a surprise to me at all. I've been a spectator of this game for many years now.

Plus, it's the end of the month.

Wed, 02/27/2013 - 14:18 | Link to Comment bonzo112358
bonzo112358's picture

Covered on Monday and putting the shorts back out today.  I wish I would have covered and gone long but I didn't.  I didn't think the window dressing would be this much in two days.  There's no way these fund managers want to have a negative February after their 6%+ January.  And if it really is a huge POMO day then add that to the window dressing and you get this big up day. 

Wed, 02/27/2013 - 14:41 | Link to Comment I am more equal...
I am more equal than others's picture

Knock, knock...

Bernake: Who's there?

Reality

Bernake: Go away, we are not buying or selling that shit anymore.

It is going to hurt when I come back and breakdown this door

Bernake: Be quiet....I'm the great and powerful Oz....

Wed, 02/27/2013 - 14:40 | Link to Comment q99x2
q99x2's picture

The country concept is used by the globalists to destroy citizens..

Wed, 02/27/2013 - 13:50 | Link to Comment Yen Cross
Yen Cross's picture

  Bigtime disconnect. Did risk F/X just evaporate? Where is aud,gbp,eur?

Wed, 02/27/2013 - 13:54 | Link to Comment Edward Fiatski
Edward Fiatski's picture

AUD isn't buying the Hopium, sitting at 4-month lows, barely breathing compared to S&P which is up 1% - both are usually correlated.

Wed, 02/27/2013 - 13:50 | Link to Comment nobusiness
nobusiness's picture

So over the next 2 days Who will be correct.  Balls to the wall buy because Bernacke has our back.  or what the fuck this is a fraud.  Ovbiously long term this will fail, but next 2 days?

Wed, 02/27/2013 - 14:49 | Link to Comment derek_vineyard
derek_vineyard's picture

arb it

Wed, 02/27/2013 - 13:52 | Link to Comment Ham-bone
Ham-bone's picture

Must marvel at complete capture of "markets"...utter ability to drive the "right" assets up, "wrong" assets down...Soviets, Mao, et al would be so impressed at a centrally directed society with the peoples belief they are in "charge".

Wed, 02/27/2013 - 13:52 | Link to Comment gigeze787
gigeze787's picture

Tyler,

How about a graph showing average stock market (S&P500 and Russell 2000) performance versus performace on each day Bernanke has testified before Congress or given a Jackson Hole speech since 2007?

Wed, 02/27/2013 - 13:54 | Link to Comment A. Magnus
A. Magnus's picture

Looks like they got their morning PM Donkey Punch Smackdown back on schedule today...

Wed, 02/27/2013 - 13:56 | Link to Comment Dr. Engali
Dr. Engali's picture

I hope everybody got a chance to BTFD.

Wed, 02/27/2013 - 14:01 | Link to Comment eclectic syncretist
eclectic syncretist's picture

Where's the fucking silver Bernanke, you stupid motherfucker.  Get the price down, you sack of shit, so my bid will get hit. 

Wed, 02/27/2013 - 14:01 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Indeed Tyler, its like the twilight zone. Just think about it

- ES up 1.25% - Gold down 1.25% - USTs flat - USD flat.

Bernank speaking and all is well. Sequester coming thru on Friday.

The Fed must have a "all on hands on deck" call as the Fed's "trading" staff plays whack a mole with printed money.

Play that movie alongside listening to Maxine Waters speaking to BenDover Bernanke......

Where's David Lynch when you need him ?

Wed, 02/27/2013 - 14:52 | Link to Comment SDRII
SDRII's picture

The equity scare has been just enought to back crude off which means the yen short, equity long, gold short trade can resume.

Wed, 02/27/2013 - 14:03 | Link to Comment gjp
gjp's picture

Transparently false public narrative about the state of affairs, wild swings in all financial markets, discussion (and dismissal) of bubbles back in vogue, assholes like Dimon providing the 'gotta keep dancing' quote for this cycle.  It all looks very toppy, it should blow soon.

But I would have said that three years ago.

Wed, 02/27/2013 - 14:06 | Link to Comment dragoneyes74
dragoneyes74's picture

This is why I make a sincere effort not to trade equities.  They're in a universe of their own.  Apparently, all you have to do is keep hitting the buy button on the hour, blindly, with no rationale, forever.  Pay no attention to outside reversal days, divergence, selling volume, bad news, fundamentals...  I wish I could do it, but I guess I'm not wired to trade like a monkey.  

In theory, the end of today should be a slam dunk short, but I'm not touching it.  If Congress cancels the sequester, faces will get ripped off.  I still have my eye on April-ish if it sets up like Monday.  One of these times will be a nice selloff.  But I don't care if I miss it b/c fuck equities.    

Wed, 02/27/2013 - 14:08 | Link to Comment polo007
polo007's picture

http://online.wsj.com/article/SB120424639824701397.html

The Bernanke Reflation

Naturally, the Fed and its most vocal constituencies -- Wall Street and politicians -- see nothing much to worry about. Wall Street sees a reflation as a way to ease its credit problems, as price increases ease debt burdens and perhaps reflate housing values. Congress and the White House see a way to perhaps avoid a near-term recession, which might get them past the election.

As for the Fed, its Governors are dusting off their favorite intellectual justifications. We are told that inflation isn't as bad as it seems because "core inflation" -- which excludes food and energy prices -- isn't rising as fast as the consumer price index. However, food and energy are what most Americans are having to spend ever more of their paycheck to buy. Thus the Bernanke reflation is in part self-refuting even as a short-term recession antidote, because it robs consumers of some of their discretionary income just when the economy needs it.

Meanwhile, even the Phillips Curve is making a comeback. That's the notion -- popular before it was discredited in the 1970s -- that there is a trade-off between inflation and economic growth. In its new version, argued by Fed Governor Frederic Mishkin, the Phillips Curve doesn't exist in the long term but does in the short term. Thus the Fed can afford to open the monetary flood gates now because the slower economy could lead to lower prices later this year. Then when the economy recovers, the Fed can afford to tighten money again.

This is a beguiling intellectual construct, but it puts a great deal of weight on Fed Governors to know when to tighten again. They were supposed to do something similar in 2003-2005, but they were terribly wrong. Then as now they were also dismissing such forward-looking price signals as gold and oil and instead focusing on such misleading indicators as "core inflation" and the money supply. Mr. Mishkin may be seen as a monetary wizard at the Fed, but to investors around the world he is beginning to look more like a high-class inflationist.

The people who aren't being fooled by all this are the American people. They don't pay their bills with "core" dollar bills, and they know those dollars buy less with each passing month. This explains their rising economic anxiety -- and anger -- better than trade or job losses do, especially since the job market has remained relatively healthy. Inflation is the great thief of the middle class, as even Americans who don't recall the 1970s are learning. With its all-in reflation bet, the Bernanke Fed is gambling with their money.

Wed, 02/27/2013 - 14:08 | Link to Comment pragmatic hobo
pragmatic hobo's picture

seriously ... it's end of the month ...

Wed, 02/27/2013 - 14:09 | Link to Comment nobusiness
nobusiness's picture

I guess the "Context Model" is complete bullshit as it is currently -25 points and some how by tomorrow morning it will be back to zero and the SPY will not have fallen

Wed, 02/27/2013 - 14:11 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Which one doesn't belong in line?

Wed, 02/27/2013 - 14:15 | Link to Comment thismarketisrigged
thismarketisrigged's picture

ill never understand why this market has wiped away all its losses from monday so fast.

how can we not laugh at this joke. we all want it to crash, and it will eventually, but geez, less than 48 hours from mondays close, and we are positive for week. cant make this shit up

Wed, 02/27/2013 - 14:22 | Link to Comment venturen
venturen's picture

Printed Money!

Wed, 02/27/2013 - 14:24 | Link to Comment rubearish10
rubearish10's picture

Oh yes they can! Dammit!

Wed, 02/27/2013 - 14:18 | Link to Comment w00dmann
w00dmann's picture

Mr Bernanke!  Mr Bernanke!  Joe Q Public here, sir.  Have you always been a cocksucking motherfucking shit-eating pukefuck asshat cuntbag ballsucking fuckface assclown wimp shit for brains lowlife weasel cuntcunt all your life, sir, or did you go to school for that?

Wed, 02/27/2013 - 14:32 | Link to Comment eclectic syncretist
eclectic syncretist's picture

Kevin Klein addresses chairman Bernanke

http://www.youtube.com/watch?v=XvHFqcYN3nc

 

Wed, 02/27/2013 - 14:33 | Link to Comment Orly
Orly's picture

I fail to see how any of this is helpful.  Why don't you get a tennis racket and an old bean-bag chair or something?

Or does it make you feel grown up to use dirty words?

:/

Wed, 02/27/2013 - 14:24 | Link to Comment venturen
venturen's picture

take a look at maize prices and tell me if you see any inflation http://www.indexmundi.com/commodities/?commodity=corn&months=300 ?

Wed, 02/27/2013 - 14:26 | Link to Comment venturen
venturen's picture

I say we see Dow 50000 with corn priced at $50/bushel, gas at $20/gal within 5 years! Then we can do a remake of the Les Misérables, American Style...where shall we do the executions? 

Wed, 02/27/2013 - 14:30 | Link to Comment ekm
ekm's picture

Simple answer.

There's some kind of an APPEARANCE of volume, but there's no LIQUIDITY.

Same batch of stocks bounced around primary dealers desks over and over and over and over.

Wed, 02/27/2013 - 14:34 | Link to Comment eclectic syncretist
eclectic syncretist's picture

Banks are playing hot potato with each other.  Client accounts will be the bagholders.

Wed, 02/27/2013 - 14:35 | Link to Comment mdtrader
mdtrader's picture

S&P has completed a 61.8 retracement of the entire move down from 1532. Not that it means anything these days.

Wed, 02/27/2013 - 15:27 | Link to Comment Tsar Pointless
Tsar Pointless's picture

I think I gave up on TA around - oh, 300 S&P points ago.

Wed, 02/27/2013 - 14:43 | Link to Comment More_sellers_th...
More_sellers_than_buyers's picture

If I still traded equities for a living, judging by the average size of position not hedged, and my propensity to play the short side, there is no doubt I would be dead or in an insane asylum.  They would have dragged me out of the building kicking and screaming and locked the doors

 

Wed, 02/27/2013 - 15:22 | Link to Comment WTF_247
WTF_247's picture

Every selloff this month has been undone either the same day or within 1-2 days.  In total there were only 2 down days of any non-negligible amount -- one for 10pts on ES and the other for 30pts.  Both were undone within 2 days. While I know this will not end well it is likewise extremely tough to be short - the only relief you get most days is on the open (a few names gap down) - then its nothing but buying most days.  

Wed, 02/27/2013 - 15:40 | Link to Comment thismarketisrigged
thismarketisrigged's picture

the thing is though, the buying is coming from the fed, not even retail investors. that is what sickens me. all this just to make there fucking banker friends happy.

 

i really hate the fed, i fucking hope something bad happens to these assholes

Wed, 02/27/2013 - 16:05 | Link to Comment Stuart
Stuart's picture

The puppet masters did not like yesterday's trading.

Wed, 02/27/2013 - 17:27 | Link to Comment Rodders75
Rodders75's picture

Re Gold, an interesting technical indicator is the Bloomberg Commodity Sentiment Gold Bullish index. Since the inception of the survey (April 2004) readings below 30% have marked bearish extremes and contrarian buy signals. Whenever it has moved below 30, gold has historically posted an average return of 21% on a 12-month horizon, with a 100% hit rate. It has also been positive on a 1 wk, 1m, 3m and 6m basis. Today we are at the lowest level in the indicator since Dec 2011, and it is screaming "Buy".

Wed, 02/27/2013 - 19:13 | Link to Comment michigan independant
michigan independant's picture

Soothsayer: Beware the ides of March.

Caesar: What man is that?

Brutus: A soothsayer bids you beware the ides of March.

allowing the big boys caught offside to exit? yes

 

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