Dead Cat Bounce Deja Vu Ends 2nd-Worst Week Of The Year For Stocks

Tyler Durden's picture

The 2nd worst week of the year (2nd only to Cyprus) for US equities was accompanied by Treasury buying as the JPY carry trade unwind continues in every risky-or-'yieldy' product. On an admittedly low volume day (typically good for a magical levitation in stocks), Treasury markets closed the day unchanged (and 30Y bonds ended the week unchanged). Stocks bounced after testing yesterday's intraday lows but intriguingly (Mrs. Watanabe?) it was Utilities that were the hardest hit sector on the day as stocks fell back rapidly after bonds closed finding balance at VWAP. The JPY strength weighed on the USD as it fell 0.7% on the week with gold and silver both up notably relative to other asset classes (+1.8% and 0.5% respectively). The last minute of the day saw a ridiculous instantaneous spike to take the S&P 500 to their day-session highs to desparately try to regain green on the day (SPX cash closed -0.87 points). Futures closed green with an 8 point run from 455ET (as we note no credit police were around to stop the idiocy).


The low volume levitation in stocks ignored their main risk driver USDJPY for most of the post-EU close session...


The cash S&P ramped into the close but failed to get into the green - another dead cat bounce - with no support from JPY carry


but futures went full retard after the cash close...


Utilities (and REITs) were the hardest hit sector this week - over-owned and yieldy (I guess we know where Mrs.Watanabe was buying?)...


The most-shorted names did not plunge in the last two days suggesting this is a much more broad-based weakness providing little ammo for a short squeeze ramp...


Gold and Silver ended the week green...


FX markets were dominated by the JPY movements...


Charts: Bloomberg and Capital Context

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ebworthen's picture

"meeorearh! phht!  phht!"

TheLooza's picture

Respect most and read everything here, but I'd be lying if I said I didn't BTFD. My dyslexic father's advice rings truer than ever, "If it's broken, don't fix it."

ebworthen's picture

(that was a half-dead cat bounce by the way; the ground is covered with fiat and POMO printouts - damn cat has 27 lives)

LooseLee's picture

Lets hope that your inclination to conformity and being a 'follower' pays off big. Nevermind being a courageus contrarian who 'knows he's right and holds tight'. You obviously are not of that breed....

Spirit Of Truth's picture

Puetz eclipse crash window in effect around 5/25 lunar eclipse:

"Puetz attempted to discover if eclipses and market crashes were somehow connected. Without discussing our own opinion on the potential connection between astronomical configurations and market timing, let's simply relate to you the basic findings discussed by Puetz. He emphasized that he is not contending that full moons close to solar eclipses cause market crashes. But he does conclude that a full moon in general and a lunar (eclipse) full moon close to solar eclipses, in particular, seem to be the triggering device that allows for the rapid transformation of investor psychology from manic greed to paranoia. He asks what the odds are that eight of the greatest market crashes in history would accidentally fall within a time period of six days before to three days after a full moon that occurred within six weeks of a solar eclipse? His answer is that for all eight crashes to accidentally fall within the required intervals would be .23 raised to the eighth power less than one chance in 127,000."

". . .Puetz) used eight previous crashes in various markets from the Holland Tulip Mania in 1637 through the Tokyo crash in 1990. He noted that market crashes tend to be lumped near the full moons that are also lunar eclipses. In fact, he states, the greatest number of crashes start after the first full moon after a solar eclipse when that full moon is also a lunar eclipse . . Once the panic starts, Puetz notes, it generally lasts from two to four weeks. The tendency has been for the markets to peak a few days ahead of the full moon, move flat to slightly lower --waiting for the full moon to pass. Then on the day of the full moon or slightly after, the brunt of the crash hits the marketplace."

Bizaro World's picture

HFT Algos don't give a s*** whether the moon is shining or not....FORWARD!

slaughterer's picture

Next trading session => Gap up Turbo Tuesday

Rainman's picture

Amen...did you too hear the halleluja coming from the lips of the btfd chorus ?

Oldwood's picture

AS predicted yet still amazing to watch it happen. Like watching a magic trick that looks real but yet you know it is an illusion.

freewolf7's picture

"Now You See Me", released next week, brings together banks,
magic, illusion, theft, and reclaiming from the thieves/banksters.
Interesting that it's coming out now.

LawsofPhysics's picture

All I want to know is who is going to buy sorvereign debt from this point forward?  If the yields explode, the Fed will have to stop the MBS bullshit and start buying 120 billion per month in treasuries alone.  Unless of coure our "representation" has an adult conversation about balanced budgets as well as capital mis-allocation and mal-investment...     Bah ha ha ha ha ha!!  Not going to happen.

disabledvet's picture

the banks you moron. "the one's making/blowing billions at our expense right now." i mean even in the 70's they were still buying treasury debt. that's with a worthless dollar, raging inflation, commodities soaring, interest rages out of control. this time..."here, have all the free money you want" even, forget it.

RSloane's picture

The Fed will spend however much they have to spend to prop everything up, then lie about it. There are no adult conversations in DC. Right now I would wager that the greater portion of the US population believes a balanced budget is bad for America.

debtor of last resort's picture

Why stop the MBS 'bullshit'? $140 billion a month, this year.

q99x2's picture

Hope no one missed the chance to Buy The Fuckin Dip. M'Fn no good bankster M'Fers.

The Fonz...before shark jump's picture

Juicing the close.....its what penny stock promoters do....and Ben Bernake

NipponMarketBlog's picture



The phrase "JPY carry trade unwind continues in every risky-or-'yieldy' product." got me thinking: The terms 'risk' and 'yield' rarely go hand in hand, so I am guessing that vendors of risk management tools such as BARRA are currently scrambling to adjust correlation matrices to incorporate the 'new normal' as far as diversification effects (or the lack thereof) are concerned.

ross81's picture

here endeth the correction

Rainman's picture

yup, where else can big fiatsco go other than to the dreaded barbarous relic(s)....they sure as hell ain't running that up until they absolutely have to, Now is not their time. They still have ammo , albeit .22 cal. 

Dr. Engali's picture

Amazingly the Bernank is successful luring the sheep in to be shorn for a third time.

disabledvet's picture

looks more like a Fat Cat bounce to me here they are in action: nice music with that one.

bullmkt's picture

stop the idiocy? or Durden stopped out?

Durden! What? WHERE I ASK WHERE is Y\^^THE PLUNGE^^ that you were expecting after Wed?

You even got said the trend is up,huh> Durdem - short bias since Nov.So sad.

Yen Cross's picture

    What we're witnessing is called the the " Stray Cat Strut", and  'Chair Satan" can't do a darn thing about it.

orangegeek's picture

Yep - the Dow Jones lost a massive 0.33% on the week.


Is it 14 or 17 percent that the Dow is up this year?  Such a joke.