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Biggest 2013 Drop In US Stocks Followed By Second Biggest Surge

Tyler Durden's picture





 

Yesterday's high volume dumpfest in stocks - its biggest drop in 5 months - is followed by a considerably smaller volume pumpfest that elevates the S&P by its 2nd most of the year (2nd only to the opening day of the year). The 'excessive' grab for protection yesterday that took VIX above 17% was smashed into the open and provided the ammo to leak stocks higher all day (VIX fell 3.3vols back under 14% - the biggest VIX drop of the year). The critical level for the bounce appeared to be the pre-Boston drop and every major index managed to regain it - with the Trannies leading the way. S&P futures regained 60% of the Friday-to-Monday slump, gold regained around 25% of its drop, and 10Y yields rose on the day, unwinding around 35% of the rally in Treasuries. EUR strength (and broad-based USD weakness) provided some impetus for algos to lift stocks. All-in-all, today's lower volume, lower average trade size move is not surprising and the coincident close of the S&P at around yesterday's VWAP (and lesser follow-through on other risk-assets) suggest this is more a bounce than a renewed uptrend for now.

Yesterday's biggest drop in 5 months followed by today's biggest rise of the year...

 

The late-day spurt (perfectly timed as usual) dislocated stocks from risk-assets...

 

but ensured that S&P futures ended above yesterday's closing VWAP providing a parachute for some...

 

VIX recovered its Boston protection grab and momentum did the rest...

 

As the Dow Transports surged the most from yesterday's Boston drop...

 

As commodities broadly bounced too...

 

Charts: Bloomberg and Capital Context

 


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Tue, 04/16/2013 - 16:23 | Link to Comment Yen Cross
Yen Cross's picture

 Can I join the POMO club?

Tue, 04/16/2013 - 16:25 | Link to Comment rajat_bhatia
rajat_bhatia's picture

WHAT A FUCKING JOKE EVERYTHING HAS BECOME!

Tue, 04/16/2013 - 16:27 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

A central banker, primary dealer, and politician walk into a bar......

Tue, 04/16/2013 - 16:31 | Link to Comment Yen Cross
Yen Cross's picture

 They bullshit each other for a week and die of " De-Hydration".

Tue, 04/16/2013 - 16:44 | Link to Comment Scarlett
Scarlett's picture

MEANWHILE IN ARGENTINA....

 

"Buying or selling dollars in the black market has been considered an act of TERRORISM since December 2011 and carries prison sentence of as long as eight years. The parallel rate is at a record 63 percent higher than the official rate."

http://www.bloomberg.com/news/2013-04-16/bitcoin-dreams-endure-to-savers...

 

That's the future, boys


Tue, 04/16/2013 - 16:47 | Link to Comment FIAT
FIAT's picture

shitcoin is SO last wednesday

Tue, 04/16/2013 - 16:37 | Link to Comment HD
HD's picture

...prices immediately go up, IQs come down. Dow 36,000 hats worn by all.

Tue, 04/16/2013 - 16:45 | Link to Comment FIAT
FIAT's picture

They say their kol nidres and are smart enough to distrust every syllable out of each other's mouths.

Tue, 04/16/2013 - 17:00 | Link to Comment sawman
sawman's picture

A central banker, primary dealer, and politician fall off a cliff. Which one hits the ground first? - Who gives a fuck as long as they hit the ground!

Tue, 04/16/2013 - 16:24 | Link to Comment McMolotov
McMolotov's picture

Perfectly normal. Nothing to see here. Move along.

Tue, 04/16/2013 - 16:30 | Link to Comment Yen Cross
Yen Cross's picture

 I'm already on the Fed. " Early Macro Release" list.  U.S.P.S. is late as usual...

Tue, 04/16/2013 - 16:25 | Link to Comment carlsbro
carlsbro's picture

Sorry losers. Keep shorting DOW and buying gold

Tue, 04/16/2013 - 16:31 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Indeed.  85 billion per month, indefinitely, and no inflation.  Oh boy oh boy oh boy imagine what the DOW will be once Ben increases the monetization to 170 billion per month, or 500 billion per month...

Tue, 04/16/2013 - 16:35 | Link to Comment FL_Conservative
FL_Conservative's picture

Who the fuck let Krugman in here to post?

Tue, 04/16/2013 - 16:37 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Not the sharpest tool in the shed are we?  Here let me help you out;

 

sar·casm

  [sahr-kaz-uhm] noun
1.
harsh or bitter derision or irony. 2.
a sharply ironical taunt; sneering or cutting remark: a review full of sarcasms.

 

Tue, 04/16/2013 - 17:05 | Link to Comment fuu
fuu's picture

He may have been talking to carlsbro, who may have been sarcastic himself.

Tue, 04/16/2013 - 17:31 | Link to Comment FL_Conservative
FL_Conservative's picture

At least someone appreciates an attempt at humor......

Tue, 04/16/2013 - 16:24 | Link to Comment Stoploss
Stoploss's picture

Just another opportunity to sell into it.

Thanks Ben.

Tue, 04/16/2013 - 20:20 | Link to Comment disabledvet
disabledvet's picture

you mean "thank the terrorists." this constant "attacking" (either through crazy people with guns, crazy people with bombs, crazy people with biological agents, crazy people with a microphone...the list goes on and on) is MASSIVELY aggregating capital with "the totality of the Federal Government as your backstop." (Competent) Banker Heaven. "Civil War trade" for the internet age. no longer is "merely" labor being devalued but ALL assets in the form of property, gold, a benefit check, the rule of law...unless "it bears interest." in which case "it's being pumped to the moon." this no longer includes "merely" the USA but all of Western Europe, China, Japan, Canada, Mexico, South Africa, Russia, India...the list is pretty much...EVERYONE. Amazingly "some banks are still phucking it up." Nothing another Government re-org can't cure of course via "private banker Club Treasury." i've said it before and i'll say it again...MR PRESIDENT RAISE A HUGE PHUCKING ARMY RIGHT NOW. it's already too late vis a vis "the Fat Cats." next up..."the Governors of the various States."

Tue, 04/16/2013 - 16:27 | Link to Comment thismarketisrigged
thismarketisrigged's picture

i love how all i here on tv is that the market plummeted yesterday because of boston.

 

boston happened at 3, the market was down pretty significantly the entire day before boston. god forbid the talkingheads on tv can actually admit the economy is not as rosy as they make it seem and maybe that is why the market tanked yesterday.

Tue, 04/16/2013 - 20:26 | Link to Comment disabledvet
disabledvet's picture

the Boston Massacre put a bid in the market actually. the "maybe he'll do something this time" trade. long steel reinforced concrete by the megaton. we're gonna cut the driving time from New York to Florida in half by building a bridge directly to it "with the 400 billion the President lost the first time around."

Tue, 04/16/2013 - 16:26 | Link to Comment madcows
madcows's picture

Just another muppet slaughter.

Tue, 04/16/2013 - 16:27 | Link to Comment Mordenkainen
Mordenkainen's picture

And I think to myself, what a fucking shit world.

Tue, 04/16/2013 - 16:29 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

I see volumeless ramps

quantitative easing too

401ks, for me and you

Tue, 04/16/2013 - 16:28 | Link to Comment Brixton Guns
Brixton Guns's picture

moar dead cats!

Tue, 04/16/2013 - 16:27 | Link to Comment Motorhead
Motorhead's picture

Charts, bitchez!

Tue, 04/16/2013 - 16:29 | Link to Comment Billy Shears
Billy Shears's picture

Wow, I feel much better! Everything is gonna be alright.

Tue, 04/16/2013 - 16:31 | Link to Comment algol_dog
algol_dog's picture

Just another day in the casino ...

Tue, 04/16/2013 - 16:38 | Link to Comment Spitzer
Spitzer's picture

 

 

All this talk about COMEX, silver, GLD, manipulation is all noise to me. Even I have been caught up in this.

Why should anyone care what is going on in any gold market, paper or physical until something happens in the US and Japanese 33 year bubble bull markets ?

I still maintain as I said 2 years ago, that the onset of freegold happens when there is selling/trouble in the BOND markets mainly in the US and Japan.

$1000 dollar gold, $2000 gold , what is the difference ? Who cares ? I have paid close to both. As long as BOND prices keep rising and the FED can do no wrong, nothing matters. As long as BONDS are the premier store of value for shrimps and giants alike, long or short term, nothing matters.

Nothing matters in GLD, nothing matters at the coin dealers, nothing matters at the bullion banks, nothing matters at King World News et al.

This is like being in late 60's and early 70's yaking about the price of gold as it bounces between $35 and $60. It didn't matter if you bought at $35 or $80 then until there was trouble in the BOND market and it doesn't matter now as it bounces between $1000 and $2000 now.

Tue, 04/16/2013 - 16:41 | Link to Comment Yen Cross
Yen Cross's picture

  It takes(approx.), 10 minutes for the semen to mix with the sperm.

Tue, 04/16/2013 - 16:48 | Link to Comment frenchie
frenchie's picture

là j'avoue j'ai vraiment rien calé... O.o

(didnt get that one...)

Tue, 04/16/2013 - 17:02 | Link to Comment Yen Cross
Yen Cross's picture

    You're on the wrong porn site. ;-)

Tue, 04/16/2013 - 16:41 | Link to Comment Flaming Ferrari
Flaming Ferrari's picture

Easiest BTFD of the year.  Buy at 1540, stop and reverse at 1565 "system" lives on!

Tue, 04/16/2013 - 16:42 | Link to Comment FIAT
FIAT's picture

reference goldman's "earnings"

Tue, 04/16/2013 - 16:51 | Link to Comment EclecticParrot
EclecticParrot's picture

Great day for the machines.  After the sneaky breakout at 11:00 from the early, skiddish trading range, we surge quickly till noon, then the slow, inexorable wind down from 12 - 2:30 to extricate weaker longs from their positions (like a bully taking Good 'n' Plenty from a 3rd grader) to provide maximum heft for the final liftoff to the aforementioned VWAP target (pronounced "tar-JAY").  As obvious as the plotline in MacGyver -- everyone knew how it would end -- yet with enough twists, such as the 3:00 big red "flush 'em" candle, to keep all but the most focused day traders from getting a full portion.  It wasn't hard to see, just hard to stay awake long enough, fighting off the fresh tree pollen, to fully capitalize.

Ah, the beauty of bracketed OCO orders, whenever you circumvent them, they lift their shoulders, throw up their hands, and say "Hey, moron, if you think you can do better, then don't waste my time."

Tue, 04/16/2013 - 20:39 | Link to Comment disabledvet
disabledvet's picture

i agree. this is a (lack of) POLICY trade in my view...very easy to game and algo. while i would not call what the USA is doing a "retreat" there seems to me to be setting up a schism between the massive "internal" bureaubots and the "external" warbots with a suddenly mean and nasty looking Bucky as your backdrop and zero percent financing for all who want to play both sides of this game. this is not a game that is played "merely" of, by and for the USA either. this involves Europe, China, Northeast Asia, the Oil Kingdoms, ...in other words "pretty much all the money the in the world" right now. and it's all about financing US "largesse." this is in addition to the CURRENT largesse already out there...(12 years of war effort...going on 20.) as long as the Administration keeps talking down doing anything you do not want to be short this market. in effect these Banks are becoming foreign policy itself..."with domestic implications." to me it is very dramatic indeed...and all "under the radar" as they say.

Tue, 04/16/2013 - 16:47 | Link to Comment EmmittFitzhume
EmmittFitzhume's picture

...until something breaks. - K Bass

Tue, 04/16/2013 - 16:54 | Link to Comment MichiganMilitiaMan
MichiganMilitiaMan's picture

SNAFU!!!!!

Tue, 04/16/2013 - 17:03 | Link to Comment fuu
fuu's picture

The pattern of gold and silver after the bottom last night is very gearish. Cog-like. Sprocketesque.

Tue, 04/16/2013 - 17:09 | Link to Comment gnap
gnap's picture

Obama was too busy yesterday with planning the bombings that he wasnt able to oversee the manipulation of the markets.

Now that the "attacks" are complete he can get back to overseeing that all big banks keep feeding the stock market with Ben's money.

Tue, 04/16/2013 - 17:09 | Link to Comment Calmyourself
Calmyourself's picture

It's all good until a supply line breaks.. Then you'll see some zombies, eat your face off..  Got barbwire? No, not the movie though the opening scene ain't bad..

Tue, 04/16/2013 - 17:39 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Sorry, but ... Who cares?

Right now the best Answer of the Day is what to me seems the best question of the day:  What are the lead times and margins over Spot for Gold & Silver (coins & bars)?

My preferred non-US source (online) is charging a fair bit more margin than they used to.  Silly margins!  My preferred local dealer is wiped out and taking only orders for 3-6 weeks out for US PM, less time for foreign PM.  But at least his margins over spot prices are as decent as always (3-5%), if you lock in and can wait.

The paper-PM markets are ALL BULLSHIT right now.  It's a classic Magician's Trick of Distraction & Action:  Distraction with paper-PM prices and Action with Bullion-PM buying.  Ever longer lead times and few want to sell.  Only those who 'need' to sell (need cash to pay bills) are selling.

 

Tue, 04/16/2013 - 17:47 | Link to Comment orangegeek
orangegeek's picture

No close below channel support yesterday - http://bullandbearmash.com/chart/dow-jones-daily-falls-18-awaiting-close...

 

Market rockets back - ohhhh.....big surprise.

Tue, 04/16/2013 - 17:58 | Link to Comment One of We
One of We's picture

The Fed leaks its minutes to its "insiders" and I wonder if the FBI leaks the timing of their false flag ops to the Fed....

Tue, 04/16/2013 - 18:33 | Link to Comment The Heart
Tue, 04/16/2013 - 18:23 | Link to Comment rsnoble
rsnoble's picture

And the big fkn surprise is?

 

Timing for friday.  Shitty news coming, we can still eek out a small gain or close flat.

Tue, 04/16/2013 - 18:50 | Link to Comment EclecticParrot
EclecticParrot's picture

One more comment:  unless it's my imagination, it seems the # of posts in Tyler's dialy markets wrap-ups have plummeted a bit, and we often have trouble getting past the second page of comments.  As this is certainly no reflection on Mr. Durden's continued excellent work, the obvious explanation is everyone's throwing up their hands at the "rigged" markets that mysteriously melt up each day, and consequently that mom & pop traders and active investors have fallen in number.

While I can't argue against that, I've come across a few sources that apply mathematical approaches to trading analysis, such as Michael Harris' "Price Action Lab" blog, and though he can often seem a bit full of himself, his posts offer fuel for thought regarding algos, such as recent posts on the increasing difficulty of trend-following trading systems due to HFT arbitraging out the serial autocorrelation that powered technical analysis in its heyday, examples include:   http://www.priceactionlab.com/Blog/2013/04/is-there-any-future-in-equity-index-trend-following/    http://www.priceactionlab.com/Blog/2013/04/more-evidence-that-equity-index-trend-following-has-become-difficult/.  His point is that the algos muting of trend plus financial instability has led to choppy, difficult to trade markets, particularly since 2010 and, while this will hardly be a revelation to ZH readers, his data and presentation may be of interest, even if one differs with all aspects of his conclusions.

Not sure about other traders, but the first quarter of 2013 has proven the most difficult to day trade in years, though I am seeing a small light at the end of the tunnel in recent weeks.  I'm hoping it's just the confluence of global financial idiocy and domestic budgetary shenanigans plus a possible market top, and that we get back to some semblance of (ab)normality soon.

Tue, 04/16/2013 - 18:59 | Link to Comment falak pema
falak pema's picture

For those who follow the market today like it was the face of Hope, Truth and eternal youth one gets the feeling that in your own ideological prison, as seen thru that libertarian prism, you can't see the market for what it is :  the apparent face of Dorian Gray. While the true portrait of Dorian Gray is hidden in the FED cupboard.

This physical Gold downward plunge act like some of us have pointed out, and Chris Martenson has so graphically touted here on ZH as on BI,  is a narrow market fact, drowned in paper money waterfall owned by the PDs and all controlled ad hoc by the FED fiat strategy; so pervasive it can make black look like white 'cos a herd stampedes fast in a narrow width PM gulch. Too much fiat ammo around.

A small PM truth hidden under the huge rock of a big fiat market lie, looks like a bigger lie than the one which remains a family secret, never to be pronounced in the open. How did you expect it to survive once abandoned like Caesar's staid wife?

Sometimes the blinkers have to come off like in the streets of towns where they run like the tea party was open house. 

It is... but with tragic consequences as cause and effect is a global boomerang these days that can hit anybody anywhere; blindly and very unkindly as its become such a perverted, wicked world. Gold and pursuit of happiness in Bostonian streets both get bruised and burned. 

Gold Drop Transfer Taxpayers To Banks - Business Insider

Tue, 04/16/2013 - 20:47 | Link to Comment disabledvet
disabledvet's picture

again...it is not just gold but ALL assets that are being deflated here "that bear no interest." i understand where you're coming from ("how can this be happening with interest rates this low???) but you have to understand how little money there is in actual existence first...not "what everything is worth now give me my price." in fact there is very LITTLE money in existence....and by "ton-ing" the Treasury market the Fed has incited a "riot" so to speak in the debt markets which is not putting cash in the hands of anyone...including amazingly enough Wall Street traders. this is a type of capitalism that hasn't been seen in probably a century...but it was one hell of a capitalism when it was around (the type that LAUNCHED the Titanic.) can't speak Great Britain which also has similar aggregations but in the USA "it was all about railroads" and just to "have" one back in the day required percentages of GDP....something only a bank can deliver.

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