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Oil Leaked, Bond Volatility Peaked, Credit Markets Tweaked

Tyler Durden's picture




 

After a disastrous day yesterday a bounce in bonds was at least on-the-cards and they went out at the low yields of the day (-6bps). Equity markets oscillated around their opening level of the US day-session with the S&P futures ending the day down over 8 points (in the middle of the range) glued to VWAP at the day-session close. Credit markets faded rapidly and while stocks are unch from last Thursday's close, high-yield and investment-grade spreads are significantly wider. VIX had another up-day (breaking above 15% intraday) but closing at 14.8% (highest in 5 weeks) but more criticaly MOVE (bond VIX) spiked to its highest in 9 months. Many talked about bond-like stocks getting hammered but it is noteworthy that homebuilders suffered the most today. USD weakness (and JPY strength) were the theme in FX markets as carry continued to be unwound of yesterday's peak and in turn this helped gold and silver push around +0.5% on the week. Oil prices slumped most in a month, testing below $93 at their lows.  

Equity volume ended above average, average trade size was low, and the S&P closed below its up-channel trend.

 

Credit leading stocks down...

 

As Stocks plunged but clung to VWAP into the close...

 

But as usual, it's the Trannies that are running high beta on this downswing...

 

and the homebuilders' losses are gathering pace... (as well as bonds-like stocks)

 

Oil down, Gold and Silver up...

 

Charts: Bloomberg and Capital Context

 

Bonus Chart: Cross-asset-class volatilities...


 

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Wed, 05/29/2013 - 16:24 | 3608447 LawsofPhysics
LawsofPhysics's picture

Does anyone have a link to what is being considered "tier 1 capital" in the new Basel III accord.  I know it's more banker bullshit, but there is a connnection here.

Wed, 05/29/2013 - 16:27 | 3608458 Canadian Dirtlump
Canadian Dirtlump's picture

last I heard gold was supposed to be, but after offering to show the wives of the regulators' cement overcoats, the idea was poo pooed, 86ed, and sent to the boneyard.

Wed, 05/29/2013 - 16:32 | 3608475 Ahmeexnal
Ahmeexnal's picture

No, gold was indeed elevated to tier 1. But only paper gold.

Wed, 05/29/2013 - 16:56 | 3608527 LawsofPhysics
LawsofPhysics's picture

Well, that makes sense, not.

Wed, 05/29/2013 - 17:03 | 3608545 ZerOhead
ZerOhead's picture

Their own common stock (which will be worthless when TSHTF) and retained earnings (the crumbs remaining that doesn't get paid out in bonuses or as golden parachutes) will do the trick apparently...

http://en.wikipedia.org/wiki/Tier_1_capital

Wed, 05/29/2013 - 17:04 | 3608549 LawsofPhysics
LawsofPhysics's picture

The best part is treasuries are considered zero-risk weighted, halarious.

Wed, 05/29/2013 - 17:08 | 3608559 ZerOhead
ZerOhead's picture

Don't forget those Greek bonds... zero risk of them ever being paid off...

Wed, 05/29/2013 - 16:46 | 3608502 The Shootist
The Shootist's picture

Mr. Bernanke, would you consider WTI to be, well, money? YOU WOULD?!

Wed, 05/29/2013 - 16:56 | 3608526 azzhatter
azzhatter's picture

Fuck You Bernanke

Wed, 05/29/2013 - 17:04 | 3608550 ZerOhead
ZerOhead's picture

That's a very cheap way to get upvotes here you know...

Thu, 05/30/2013 - 06:33 | 3609728 e-recep
e-recep's picture

i agree but can't help myself to upvote his comment.

Wed, 05/29/2013 - 18:07 | 3608671 U4 eee aaa
U4 eee aaa's picture

Of course he would. Just like paper, you can burn it until it doesn't exist. Therefore, in Bernanke's thought process, it's money!

Wed, 05/29/2013 - 17:01 | 3608541 max2205
max2205's picture

Zh market call.   Shorting...let you know how it goes

Wed, 05/29/2013 - 16:27 | 3608449 Ahmeexnal
Ahmeexnal's picture

Dead rat bounce.
In other news, the eurozone is about to extend the Schengen borders to include the BRICS nations.

http://www.leap2020.eu/MAP8-is-available-Towards-the-conclusion-of-Schen...

Billions of Chinese and Indians will be able to freely migrate to the EU and look for jobs while the eurosheeple youth descends into drug-addiction and prostitution in order to survive.

Wed, 05/29/2013 - 16:56 | 3608524 LawsofPhysics
LawsofPhysics's picture

Boy, that should turn out well.

Wed, 05/29/2013 - 17:16 | 3608579 Village Smithy
Village Smithy's picture

Should help tourism as well.

Wed, 05/29/2013 - 17:02 | 3608543 SilverSmurfer
SilverSmurfer's picture

So the 50% unemployed youth in southern Europe can "make a living" (and pay tax), are we seeing legalized prostitution making an entrance there any time soon?

Thu, 05/30/2013 - 06:34 | 3609730 e-recep
e-recep's picture

the ponzi must grow no matter what.

Wed, 05/29/2013 - 16:26 | 3608455 monopoly
monopoly's picture

And it is about time we are up for a change.

Wed, 05/29/2013 - 16:28 | 3608460 Obchelli
Obchelli's picture

I wonder what was red today?

All stocks I'm watching were green.

 

Amazing!!!!! and tomorrow they will be GREENER with an up market - that is sure thing after decline

Wed, 05/29/2013 - 16:33 | 3608476 Chappy
Chappy's picture

Whatever, Friday will be another epic end of month window dressing ramp fest.  I plan on buying some slightly OTM spy calls on Thursday before close.  I don't have any position now.

Wed, 05/29/2013 - 16:56 | 3608529 Duffminster
Duffminster's picture

Interested to know your thoughts for tomorrow (Thursday).  Will there be any suprises in the GDP or other data (claims) to begin the end of month ramp.  Its a low POMO day tomorrow and a big one on Friday. 

Why are you waiting until late on Thursday?

Wed, 05/29/2013 - 21:57 | 3609185 Chappy
Chappy's picture

I have gotten lucky a few times but unlucky the majority of the time.  Timing is everything, it's totally gambling in these markets.  I like to get the options that are expiring at the end of the week.  On Thursday they will be have little time value left and will be very volatile.  It wouldn't take a large swing up to at least make my money back or a small profit.  Depending on how the market opens on Friday and what it does during the day, options may be cheap at 1:30pm before the 2:00 or 3:30 rampathon.  That could also be a good gime to get in.  Again, this is totally speculation money only.  You'll lose your shirt most of the time.

 

 

 

 

 

Wed, 05/29/2013 - 16:33 | 3608477 Cdad
Cdad's picture

All just algo driven, busted correlation, meandering, rudderless gorilla trading....with ETF managers serving as puke buckets for PMs to hack their individual equity positions into.

And the beat goes on with Fed chatter bid lifting, spurring absolutely mind numbingly repetitive cliche' barking from talking heads and long only guys who don't want to end up dead, just hoping that the great equity catalyst of "saying something on tv" would give them the price they needed to exit...which they did on a medium sized Vomit on close order imbalance.

Key algo driven momentum ignition stocks failed to ignite, lifting off, only to descend...alarming everyone.

A late day, almost to zero volume levitation-a-thon tried to restore confidence, but no one was stupid enough to chase it...as participation in the market continues to be no one.  Somewhere in Dark Pools, giant trades took place, but won't be posted until Friday.

And this is the fucking wasteland that Ben Bernanke has crafted for us, in coordination with the Criminal Syndicate known as Wall Street...where once a mighty free market reigned. 

Just infuriating. 

 

Wed, 05/29/2013 - 17:24 | 3608595 M2Market
M2Market's picture

Infuriating yes... Gotta admit oil took a leak on moi today, and moi was long and now gone.

Wed, 05/29/2013 - 16:34 | 3608478 Dr. No
Dr. No's picture

Obama:  Where are the ramp jobs!??!

Wed, 05/29/2013 - 16:47 | 3608506 new game
new game's picture

Cdad-yea unfettered free markets able to discover price and punish foolishness, like raising childern...

looks like the ivy league silver spoon brats can do no wrong-fukkin pisser.

Wed, 05/29/2013 - 16:48 | 3608507 Go Tribe
Go Tribe's picture

In the back corner lot, right next to shovel-ready jobs and Steve Jobs.

Wed, 05/29/2013 - 16:54 | 3608521 EclecticParrot
EclecticParrot's picture

As Stocks plunged but clung to VWAP into the close.

It's not surprising, then, that algos get bitter, and cling to VWAP or religion or antipathy to traders who aren't like them.

Wed, 05/29/2013 - 17:14 | 3608570 Village Smithy
Village Smithy's picture

That's what algos do out there in those rural areas. They cling to their guns and their religion.

Wed, 05/29/2013 - 17:25 | 3608596 EclecticParrot
EclecticParrot's picture

True, but rural algos are also a hardy lot, producing candles with long, strong wicks.  Of course, it's no coincidence that their dojis typically resemble a crucifix.

Wed, 05/29/2013 - 16:58 | 3608535 LawsofPhysics
LawsofPhysics's picture

With stock selling off, and a minor pomo of just a few billion why didn't treasuries catch a strong bid.  Is this really all about the yen?

Wed, 05/29/2013 - 18:53 | 3608754 LawsofPhysics
LawsofPhysics's picture

mind that steamroller.

Wed, 05/29/2013 - 19:18 | 3608817 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Temper shmemper.

The FED dials it up, then back down. A little air out of equities and bonds rally ...

Everyone seems excited about a real yield backup, the quant programs are flipping out of yield and defensives into cyclicals, AS IF there really were growth down the pipe. I mean, if you are an algo, you believe the Rosengren headlines about dialing back, and it's because of growth?

Bond volatility is following vol in commodities and currencies.

Is a correction possible in stocks anymore? If the FED wants it so.

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