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Stocks Slammed On Best Day For Bonds In 4 Months

Tyler Durden's picture


Treasuries appear to be shrugging off the Taper talk in favor of safe-haven status as they rally 6-7bps - the best yield compression since mid-February. US equity markets did not close off the lows (as the Nikkei is within 45 points of the dreaded bear market 20% correction level). Credit markets anxiety yesterday bled through today and they led stocks lower (with no Hindenburg Omen today). The VIX term structure bear-flattened dramatically as the 'picking-up-nickels-in-front-of-the-steamroller' trade finally got its fingers caught - the front-end of the curve smashed higher and is now at its flattest to the midcurve in 2013. The USD weakened as JPY was bid (and AUD sold hard) amid heavy carry unwinds. Volume was heavy today but the selling was very broad-based across the sectors (homebuilders remain worst on the week). The Dow ended with its biggest points drop in almost two months - no buy-the-dip-mentality victory today eh Maria?


No matter how hard they trued to pick up JPY and get back to VWAP - the algos couldn't trump the selling pressure...


From Friday morning's top, things are accelerating...


with homebuilders leading the way...


Credit led the way after yesterday's huge range day...


and VIX pushed up near its year's highs and its flattest term structure...


Why do we care so much about FX? Because it's all about the JPY carry trade - as it seems a few mainstream media types are finally catching on to...


Charts: Bloomberg and Capital Context


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Wed, 06/05/2013 - 16:21 | 3627460 Cognitive Dissonance
Cognitive Dissonance's picture

OK. Who spooked the fracking dip buyers? I want names.

Wed, 06/05/2013 - 16:22 | 3627464 Hulk
Hulk's picture

Buy the fracking dip ???

Wed, 06/05/2013 - 16:45 | 3627546 Buckaroo Banzai
Buckaroo Banzai's picture

Anybody know a good double- or triple-short homebuilders ETF?

Wed, 06/05/2013 - 16:53 | 3627559 bigdumbnugly
bigdumbnugly's picture

well, today is the day after fat tuesday, right?

Wed, 06/05/2013 - 16:58 | 3627578 Randall Cabot
Randall Cabot's picture

S&P down 78 points since May 17 when Art (The Wrong Way Old Fart) Cashin predicted a "parabolic rise" in stocks:

Fri, 05/17/2013 - 14:36 | Randall Cabot

Until Cashin just marked the top I was thinking that they were going to push higher and higher bringing in greater and greater fools before pulling the rug and leaving the last fools in holding the bag.

Wed, 06/05/2013 - 23:16 | 3628579 Mineshaft
Mineshaft's picture

You may want to show the "Old Fart" a little respect as he is a lot more right than wrong and a TON more right than you.

You want to throw stones at someone but I look at your comments and you cant believe there would be a rally 6 months ago to 1450-1500.  Yeah great call.  It was only wrong by 15%. 

GREAT JOB!!!!!  You are much better than Art Cashin!  Moron.

Wed, 06/05/2013 - 16:54 | 3627576 Lendo
Lendo's picture

Battlestar Galactica verbiage! 

Wed, 06/05/2013 - 18:45 | 3627896 Ivanovich
Ivanovich's picture

All this happened before, and it will happen again!

Wed, 06/05/2013 - 19:18 | 3627986 Best Of Pute
Best Of Pute's picture

Regime change, bitchez !

Wed, 06/05/2013 - 16:26 | 3627480 RSloane
RSloane's picture

All of their names end in A-L-G-O-S.

Wed, 06/05/2013 - 16:36 | 3627511 Obchelli
Obchelli's picture

They are setting up condition to Justify increase of QE 4EVA. PLus they will suck in fresh shorts for a new squeeze.


What did change realy? Don't you thin k they could continue market ramp as they did for 5 years... Someone is orchestrating this

Wed, 06/05/2013 - 16:22 | 3627462 Hulk
Hulk's picture

DOW 6666 Bitchez !!!

Wed, 06/05/2013 - 16:23 | 3627468 Truther
Truther's picture

Hell bound it is folks. What a freakin' ride

Wed, 06/05/2013 - 16:25 | 3627477's picture

Every % down for the Home Builders an Angel Loses its wings.

Wed, 06/05/2013 - 16:39 | 3627526 SemperFord
SemperFord's picture

But every time 2 women kiss and Angel get its wings!

Wed, 06/05/2013 - 16:26 | 3627479 kito
kito's picture

quick!!!! .......everybody run back to uncle sam!!!!!..........runnnn!!!!....hurryy!!!!....

Wed, 06/05/2013 - 16:27 | 3627482 polo007
polo007's picture

The Fed stimulus and better-than-expected corporate earnings have propelled the bull market in U.S. equities into a fifth year and driven the S&P 500 up 138 percent from a 12-year low in 2009.

The Chicago Board Options Exchange Volatility Index (VIX), or VIX, climbed 7.1 percent today to 17.42. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-year low in March and has since surged 54 percent.

Raw-materials and financial companies sank more than 1.8 percent, the most among 10 S&P 500 industry groups. Alcoa Inc. fell 1.9 percent to $8.22 and Bank of America Corp. declined 2.3 percent to $13.06.

Homebuilders Fall

An S&P index of homebuilders sank 1 percent as all but one of its 11 members fell. The Mortgage Bankers Association’s index slumped 11.5 percent last week as the highest borrowing costs in more than a year led to a plunge in refinancing.

“Be careful what you wish for,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in an interview. His firm oversees $8 billion. “Would you rather have higher rates and a stronger economy or a crappy economy and QE forever? I for one would like higher rates and a stronger economy, but I think people are most concerned with how much just a small uptick in rates had on the home-building sector and everything attached to it.”

Wed, 06/05/2013 - 16:52 | 3627567 Bay of Pigs
Bay of Pigs's picture

If we wanted to read that article we would go to Bloomberg and get it.

Stop spamming this shit polo.

Wed, 06/05/2013 - 16:27 | 3627483 Yen Cross
Yen Cross's picture

     I wouldn't want to be a trader on the Tokyo stock exchange. The Nikkei chewin em up, and spitting them out.

Japan NI225    12,879.00    13,014.87    13,284.00    12,859.00   [ -135.87    -1.04%]    20:24:12

Wed, 06/05/2013 - 16:30 | 3627491 CunnyFunt
CunnyFunt's picture

Sad bastards.

Wed, 06/05/2013 - 16:56 | 3627581 kito
kito's picture

yen, do you see your namesake hyperinflating? can they print to the point there is no longer any confidence in the yen? its very hard to see that happening........

Wed, 06/05/2013 - 17:09 | 3627609 Yen Cross
Yen Cross's picture

     Kito, that was a great question. I'm looking at the DXY/AJX charts as we speak. I'm seeing the beginnings, of a complete yen breakdown.

     It appears that the usd is actually starting to strengthen against the yen in a 'risk off' trade profile. To answer your question, yes & yes.

     Central banks are losing control, and it has very little to do with Fed. tapering. I'm not sure if you're familiar with past BoJ (currency)interventions, and how they worked out ? The possibility of Japan blowing up is very real.

Wed, 06/05/2013 - 17:32 | 3627677 kito
kito's picture

is there a "no confidence"number for the yen when, if breached, there is no turning back--certain destruction is priced in???

Wed, 06/05/2013 - 17:50 | 3627729 Yen Cross
Yen Cross's picture

   Kito I would say>  97.03 and (just below) the 61.8% retrace of (103.724- 92.561) is probably a heavily guarded area.

   I'm actually long usd/jpy with a 'trailing stop'. If it blows up, I'll take a minimal hit if it stops out. If it retraces I'll make a nice profit.

Wed, 06/05/2013 - 18:27 | 3627845 kito
kito's picture

i will keep that it mind.......thanks

Wed, 06/05/2013 - 18:45 | 3627887 Yen Cross
Yen Cross's picture

   We should discuss Europe, and the widening perpherial spreads. ;-)

    FWIW Kito,

     Japan Buying Foreign Bonds (prior week was Y -1117.3B)
    Japan Buying Foreign Stocks (prior week was Y -104.9B)
    Foreign Buying Japan Bonds (prior week was Y -457.2B)
    Foreign Buying Japan Stocks (prior week was Y 27.4B)

Wed, 06/05/2013 - 16:27 | 3627487 OpTwoMistic
OpTwoMistic's picture

Glad Benny pumped all your money in or we would be down moar,

Wed, 06/05/2013 - 16:34 | 3627498 gatorengineer
gatorengineer's picture

Dont worry he is throwing 5 large at her tomorrow.....

Wed, 06/05/2013 - 16:47 | 3627551 malikai
malikai's picture

$5 trillion?

That should be good for 30 s&p points.

Wed, 06/05/2013 - 16:29 | 3627489 astoriajoe
astoriajoe's picture

What happened to corn? or is that just a glitch in my matrix?

Wed, 06/05/2013 - 16:31 | 3627493 OpTwoMistic
OpTwoMistic's picture

contract to waste it in gasoline expire?

Wed, 06/05/2013 - 16:29 | 3627490 I Am Not a Copp...
I Am Not a Copper Top's picture

Rampjob Fail

Wed, 06/05/2013 - 16:33 | 3627496 denverdolomte
denverdolomte's picture

Ben Bernanke : He received the doctor of philosophy degree in economics from the Massachusetts Institute of Technology in 1979 after completing and defending his dissertation, Long-Term Commitments, Dynamic Optimization, and the Business Cycle


**Note to self having a philosophy of economics still makes you an idiot. 

***Second note to self avoid MIT and Harvard for Bachelor and PHd of Arts degrees.

How da'fuq does one lead the Federal Reserve with Liberal Arts degrees? Bachelor of Arts (Harvard) & Doctorite of Philosophy from MIT? 

Wed, 06/05/2013 - 16:51 | 3627564 jcaz
jcaz's picture

....Because those who can, do.....

No real businessperson would be caught dead in the Ivory Tower.....

Wed, 06/05/2013 - 16:52 | 3627566 jcaz
jcaz's picture

....Because those who can, do.....

No real businessperson would be caught dead in the Ivory Tower.....

Wed, 06/05/2013 - 16:34 | 3627499 JJ McApe
JJ McApe's picture

FED has been "rescuing" economy for past 5 years. We have highest unemployment ever if you count people that gave up on jobs. We have highest amount of people on food stamps ever. I wonder where we would be without the FED. Something is telling me, we would be better off.

Wed, 06/05/2013 - 16:35 | 3627501 PiltdownMan
PiltdownMan's picture

I never thought the economy was improving. Just HOPED it was.

Wed, 06/05/2013 - 16:35 | 3627504 SheepDog-One
SheepDog-One's picture

Poor ol Maria Fartaroma.

Wed, 06/05/2013 - 16:47 | 3627552 Buckaroo Banzai
Buckaroo Banzai's picture

She seemed OK when I snuck out of her apartment this morning.

She snores, though.

Wed, 06/05/2013 - 17:02 | 3627594 Randall Cabot
Randall Cabot's picture

Yes she does. I was surprised to see that tramp stamp too.

Wed, 06/05/2013 - 16:36 | 3627512 i_call_you_my_base
i_call_you_my_base's picture

I bought the fucking onion dip today. Does that count?

Wed, 06/05/2013 - 17:24 | 3627651 Panafrican Funk...
Panafrican Funktron Robot's picture

Dean's onion dip + Ruffles + rum 'n coke = college.

Wed, 06/05/2013 - 17:41 | 3627697 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

Dean's onion dip + Ruffles + rum 'n coke + massive student loans = college.  Fixed it for ya...

Wed, 06/05/2013 - 16:39 | 3627517 One And Only
One And Only's picture


If a stock market goes up 200% in a year and than falls 20% over a 30-60 day period is it a bear market or a bull market?

Wed, 06/05/2013 - 16:42 | 3627533 I Am Not a Copp...
I Am Not a Copper Top's picture

Depends on when you bought...

Wed, 06/05/2013 - 16:39 | 3627520 1000924014093
1000924014093's picture

Whar was  PPT  ??


Wed, 06/05/2013 - 16:39 | 3627527 bnbdnb
bnbdnb's picture

6X6X6 = 216 tomorrow is 6/6/2+0+1+3 or 6/6/6

Wed, 06/05/2013 - 16:43 | 3627542 malikai
malikai's picture

The dip appears to be being bought in gold.

Wed, 06/05/2013 - 16:45 | 3627547 css1971
css1971's picture

Think happy thoughts

Think happy thoughts

Think happy thoughts


Oh come on. Tomorrow is going to be a 15G Half Cuban reversal. To da moooon.

Wed, 06/05/2013 - 16:47 | 3627554 tawse57
tawse57's picture

Just wait till Friday - the jobs numbers will be terrible and the DOW will shoot up 1,000 points on the terrible news.

Ordinary punters simply cannot speculate in this casino as we are not privy to what the Fed is telling the big banks. Good news is bad and bad news is good - until they change their minds and forget to tell us.


Wed, 06/05/2013 - 16:48 | 3627556 nomorebuyins
nomorebuyins's picture

The failed ramp today should bring a ton of shorts tomorrow morning. Hopefully that's not their plan again. We have seen this before, the fucking market goes up fast, and usually faster with shorts locked and loaded. Hedge.

Wed, 06/05/2013 - 16:53 | 3627571 mark mchugh
mark mchugh's picture

Where's the deer?

Wed, 06/05/2013 - 16:54 | 3627573 OneTinSoldier66
OneTinSoldier66's picture

What has George Soros has done recently, invest in Gold mining companies? I've heard he has. I wonder why...?


Okay okay, I don't have to wonder why. I know why.

Wed, 06/05/2013 - 16:58 | 3627586 Rathmullan
Rathmullan's picture

Taper has likely begun in June. But don't get too excited, as the fed likely will buy in June at the $85 billion monthly rate that it is suppossed to be buying at instead of the $105 billion monthly average incurred January thru May.

Expect another $85 billion in July and if 2Q numbers look okay maybe they back off to $65 billion in August. Bottom line is the that the best case for the hawks is the fed ends up buying a "mere" $980 billion in net new paper in 2013. The other best case for the hawks is that purchases wind down to $25 billion per month beginning February 2014.... but as ZH readers know, $25 billion vs $105 billion per month is like methadone to a heroin junkie.

Wed, 06/05/2013 - 17:26 | 3627657 Panafrican Funk...
Panafrican Funktron Robot's picture

I see a "drop" to $65 billion, with $55 - $65 of that being UST's.  There just isn't any MBS left.

Wed, 06/05/2013 - 19:23 | 3628001 Best Of Pute
Best Of Pute's picture

Yep very smart comment. If 85/m was enough for 200 SPX points in 4 months then 65/m could still take us to the sky by year end. Unless Kevin Henry misses his bus like today.

Wed, 06/05/2013 - 17:11 | 3627611 thismarketisrigged
thismarketisrigged's picture

do you guys think the selloff continues tomm or we have a pretty much flat day ahead of the jobs report friday?


either way, great way to end today near the lows. i really hope that all the bailedout companies fucking go under soon, because i cant stand companies like fucking aig, gm, and all financials. fuck them all

Wed, 06/05/2013 - 17:30 | 3627667 EclecticParrot
EclecticParrot's picture

While I can understand the relief in some camps at finally ending a day near the lows, in fact other than the Dow the Russell and SPY didn't move much past the lows set at noon and 1:00, with much chicanery to attempt VWAP in the last 3 hours, as noted by Tyler.  Rather than unsuccessful dip-buyers, a close look at the tape (i.e., 5-min charts) suggests it was clearly algo activity, with VWAP-goaled bursts at 10 minutes till the top of each of the last three hours.  A look at a longer, say daily chart, indicates why:  if another pivot was breached the May 3 gap was staring them in the face, quite a free fall.  As they're likely still "holding" (i.e., not enough retail has taken the shit off their hands), they had to limit the damage to the mid-day levels to allow more favorable exits.  I'll just bet we get a 9:45 ramp toward the Home Sales figures, then big-wicked spikiing for an hour or so, with new shorts frustrated with constant VWAP surges as they (the algos) start to exit.  Any continuation plunge will likely come when most are at lunch, say 1:15 or so -- I don't think you'll get the same opportunity to ride the elevator down as we saw today.  Unless the Jobless Claims are several hundred thousand off estimates either way, but if that occurs it'll be leaked for sure, and you'll see a big pre-open carnage fest.  I guess I'm saying, barring a true catastrophe in Europe, I don't think they'll provide short satisfaction just yet . . .  bastards

Wed, 06/05/2013 - 17:14 | 3627621 deerhunter
deerhunter's picture

Has anyone in their life seen a Chinese woman that well endowed or do I need to be long silicone futures?   Attempt at humor,,, forgive me before red arrowing me,  I have a very fragile persona these days,  just saying........

Wed, 06/05/2013 - 17:44 | 3627709 Beam Me Up Scotty
Beam Me Up Scotty's picture

She's hot.  I'd give her a breast massage!!

I don't like the guy in his underwear though.....

Wed, 06/05/2013 - 17:20 | 3627635 DowTheorist
DowTheorist's picture

Today the secondary trend changed to bearish according to the Dow Theory for the reasons explained here:


The primary trend remains bullish, but it this a yellow flag....

Wed, 06/05/2013 - 17:23 | 3627650 Catullus
Catullus's picture

It was two down weeks last week. Rally over. Sell it

Wed, 06/05/2013 - 18:56 | 3627931 dootyfree
dootyfree's picture

There is no more real "carry trades".  Stop trying to sound smart.


Wed, 06/05/2013 - 19:27 | 3628015 Best Of Pute
Best Of Pute's picture

Maybe but overlay JPYUSD or AUDJPY vs SPX on the daily graph and be happy with the result.

Wed, 06/05/2013 - 21:23 | 3628296 khakuda
khakuda's picture

It's almost comical how each time rates rise and start choking off housing and further debt induced spending, equites magically get hit and money flies into bonds and pushes yields down so the party can continue.

Thu, 06/06/2013 - 00:01 | 3628682 electricgorilla
electricgorilla's picture

Endaka Fukyo

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