Stocks Up, Bonds Up, Dollar Up, VIX Up

Tyler Durden's picture

Treasuries close today at the low yields of the week (down 11bps) but equities were not going to take any notice of that and pushed to hold green for the week (with the Dow and TRAN outperforming). S&P futures managed to touch the underside of their uptrend once again but not break back into it. Financials and Energy ended the week -0.5% while Discretionary rallied 1.5%. VIX ignored equity's strength and rose around 1.5 vols (with a notable bearish divergence into the close). The Dollar gained 1% on the week against the majors - helped by JPY's rapid sell-off today. This USDJPY shift today was the algo driver for stocks as everything else decoupled. Gold and the S&P 500 recoupled on the week. Credit markets in general tracked stocks but high-yield started to slide into the close. WTI was the worst commodity on the week, down 2.3%, as Silver and Gold lost around 0.5%. It seems only US equities know something about the weekend as everything else in Europe and US was decidedly not playing along.

 

S&P 500 futures tested up to the under-side of their up-trend channel (and stalled)... click image for large chart


Gold and Stocks recoupled but Bonds went out at their high price/low yield...

 

as is made very clear in this chart - Stocks could not hold gains above gold's on the week...

 

The USD ended at its highs (inverted on the chart) and clearly today was all about USDJPY for stocks...

 

VIX also ignoring equity's exuberance as hedgers bid for protection...

 

The indices managed green closes for the week...

and the S&P sectors ended very mixed with Discretionary doing very well...

 

Credit markets were reracking with stocks but HYG rallied in the afternoon (narrowing the gap with stocks) - but the last few minutes saw it go full retard...

 

FX markets were very noisy on Friday pushing the USD up 1% on the week as JPY gave back the week's gains...

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: AAPL fell 2.5% today, pushing down to fill the gap from last January...

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busted by the bailout's picture

Looks like the PPT saved the day.  Should have been down 200+ today, imo.

Tsar Pointless's picture

To be followed by +300 the rest of the week.

NotApplicable's picture

I give up. Exactly why would a volatility index correlate with the S&P?

DeadFred's picture

Because everyone knows this baby is going down but it's a POMO day and the first-of-the-month shearing of the IRA sheep. Best of all worlds.

gmak's picture

The hypothesis (that seems borne out by the results) is that the VIX futures is driven down which leads to (algo) action buying  in the SP futures, thereby SPY, thereby SPX. To a limited extent, the VIX futures are also used to sell down the S&P. 

If you put up a chart of S&P, and one of the VIX with 5 min candles - you can see the red candle show up on VIX as the S&P moves up.  There is an inverse correlation, and the first paragraph attempts to explain why it might be causation as well.

Shizzmoney's picture

Right, there's still "hope" for a deal (lol) and the traders tend to not like to end their week's on a losing note.

If you do ever see big losses on a Friday, though....beware.  The last huge one I recall was during the 2011 debt ceiling debacle, when the DOW lost 432.

butchee's picture

Smells like yesterday's VWAP in this joint.

maskone909's picture

my bond shorts suck right now. thanks ben.

They Tried to Steal My Gold's picture

Bonds will explode but when the stocks explode first you'll see everyone running to bonds "because they have to park the money somewhere" they cant put it in banks, in the office or all in gold (althought that might not be a bad idea) 

 

So until the bonds get replaced with another safe haven you can only do short term shorting of bonds...follow the trendline.

With the beginning of the 5-10% correction you'll see the bondsrealy go up...Bond people are smarter than stock bulls this is why they have gone up the last 3 days...they know stocks are correcting next week.

 

maskone909's picture

jap bonds being bought up too. i dont know why. abe printing like a motherfker stock market up ect now that is a mind freak

WhiteNight123129's picture

This Equity rally while bond rally at the same time makes no sense. At 1.85% the bonds are pricing deflation, yet the equities rally. One of the two is wrong. Either there is some recovery (and the bonds need to go lower) or there isn[t and the equities need to go lower.

Fucking distorted market everywhere!

 

maskone909's picture

sup white . yeah its even worse in japan, no?

busted by the bailout's picture

Is that you Marc? 

You sound a lot like him.

How's it going with the Thai?

fonzannoon's picture

the euro went from 1.37 to below 1.3 while the ten year has gone from 2% to 1.85% all while retard stocks stay around all time high's. freaking fascinating. 

maskone909's picture

not to mention silver up today

mdtrader's picture

And sterling has gone from 1.64 to 1.50, while the Yen has gone from 78 to 93. Apparently this is all bullish for US earnings. lol.

maskone909's picture

who is buying up all the jap bonds too?

Edward Fiatski's picture

I have a bad feeling about this... Aynus raep on monday.

VonManstein's picture

USD up SPX up USH3 up will result in USD down SPX down USH3 down

Lady Heather...UNCLE's picture

one more push up in retard stocks likely IMHO...

Awakened Sheeple's picture

Push up to where?

I'm hopeful one more fail at these levels kills this rally.

A Man without Qualities's picture

Another day, another bullshit mountain climbed.

Lama's picture

The way down will not come easy, it will be forced and ugly. All shorts hang in there, it wont be long now.

adr's picture

You know that play where all the good actors left a long time ago, replaced wth D grade stand ins, but you never took your wife and she has been nagging to go. The show is a terrible farce of its once former glory, yet your wife still says she loved it because you took her to the play.

The stock market is kind of like that.

EclecticParrot's picture

From a trading perspective, today seemed the most overtly manipulated day of the year -- and that's saying something.  We start with a long-wicked candle that licked the 2nd lower pivot, I suppose to entice shorts, and while a typical 9:45 bounce wasn't unusual ("buy-the-new-low" algo, usually setting up a further decline) we then went up, up and away from there, with some normally reliable technical indicators (like Wilder's DMI/ADX) oblivious to the ramp, while old standby's like Stochastics and MACD rose and crossed their little hearts out.  It's almost as if a trap was laid for the typical "short the President" routine to spring the ramp, but at the same time it's clear the algo-bosses determined early on that "hey folks, we're rising one pivot above yesterday's close, sequester be damned."  Again, none of this is shocking to close observers, but for some reason today it seemed even more stealth and sneaky than usual, if that makes sense ...

maskone909's picture

my sentiments exactly. bonds vs FX vs metals vs equities schitzophrenic fundementally obserd. thats when you know the big players are Making moves.

Michelle's picture

My take is Obama has to shift the blame to the Republicans which will be evident when the market starts tanking on Monday. "See, the sequester is apocalyptic and it's not my fault," finger pointed squarely at Boehner.

Its Only Rock N Roll's picture

We are currently in an unproclaimed, global recession.  The US is a part of that.  Evryone now has a scapegoat, the sequester, once it is declared.  Everyone-Dems, Republicans, Pres and Fed is going to blame the sequester for the recession that was not caused by it.  Nice neat little package the sequester has become...the sequester ate my homework.

Its Only Rock N Roll's picture

We are currently in an unproclaimed, global recession.  The US is a part of that.  Evryone now has a scapegoat, the sequester, once it is declared.  Everyone-Dems, Republicans, Pres and Fed is going to blame the sequester for the recession that was not caused by it.  Nice neat little package the sequester has become...the sequester ate my homework.

ebworthen's picture

CNBC running a "Countdown to Sequestration" clock.

So, I didn't hear Obummer say that sequestration would stop SNAP (EBT/Food Stamp) cards from working, wonder why not?

How about cancelling NBA games due to a lack of security? 

What?  This won't affect the bread and circuses?

Catullus's picture

Green on the week.  Keep riding it out.  Still got another few weeks of this.

q99x2's picture

Step right up. Everyone's a winner.

Last one in is a rotten apple.

Michelle's picture

It's Friday, gotta go into the weekend with everything UP versus limp, I mean down.

venturen's picture

The plunge patrol just picked up this months $85 Billion and sent it to London where it can be rehypothecated over the weekend and then leveraged 20 to 1 so Monday Goldman will have $1.700 Tillion to ramp the MARKET!

WTFUD's picture

Stocks Up $ Up Bonds Up Vix Up Panties Down Arse Sore