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Stocks Pop And Credit Markets Drop As Hindenburg Omen Re-Appears

Tyler Durden's picture





 

The cluster of Omens is starting to build - now 3 in the last 7 trading days. This cluster is now the most frequent since the 2007 highs - more 'clustery' than the 2010 signals. Volume today was dismal - among the lowest of the year in both futures and cash. Equity markets were bid out of the gate on the back of Japanese exuberance - and JPY carry - which oddly hadn't helped European risk markets. Credit markets, which decoupled from equity's reality around lunchtime Friday - were on a one-way street wider today - entirely ignoring equity's efforts at exuberance. The USD saw earlier (JPY weakness-driven) gains entirely unwound by the close and ended unchanged but gold (small gain) and silver (+1.1%) outperformed as WTI limped modestly lower. Treasuries added 3-4bps in yield (up around 16bps from Friday's low yields). VIX also didn't play along with equity's general lack of direction and rose 0.5 vols to 15.5%. Homebuilders are underperforming once again but financials remain the best performers off Friday's lows (for now). Nikkei futures did nothing all day - hovering at last week's dead-cat-bounce highs.

 

Today was the lowest NYSE volume of the year (and practically the lowest in S&P futures also)...

 

But we have now seen the 4th Omen in last 5 weeks and 3rd in last 7 days... quite a cluster...

 

not seen since the highs in 2007...

 

Credit markets were entirely unimpressed with the rally in stocks...

 

Homebuilders squeeze from last Thursday's lows has ben notably undone but today was flatline in most other sectors...

 

and while financial stocks outperform (above), financial credit markets are not amused...

 

But once again FX markets were very active...

 

but gold and silver saw gains despite the USD ending unch... as oil and copper fell on china data...

 

and it looks like the Nikkei is rolling over at the bounce from last week...

 

Charts: Bloomberg and Captal Context

Bonus Chart: AAPL's algo-driven dumpfest - triggered off the 'radio' news (that was well known) algos ramped to VWAP to enable the big boys to dump (volume)...

 

Bonus Bonus Chart: LULU gets pants'd... as CEO steps down... now holding at its 50DMA



 


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Mon, 06/10/2013 - 16:13 | Link to Comment slaughterer
slaughterer's picture

Could we have robotrader-fave LULU in AH trading today as our BONUS CHART, pleeze?

Mon, 06/10/2013 - 16:32 | Link to Comment Rainman
Rainman's picture

LULU ( " Got Sweaty Balls ? " ) pimping a pair of skivvies for 48 fiatscos....what could have gone wrong ?

 

 http://www.berkeleyside.com/2013/06/10/got-sweaty-balls-sign-at-lululemon-provokes-questions/

Mon, 06/10/2013 - 16:17 | Link to Comment The Master
The Master's picture

So, in recent years, Hindenburg sightings have preceded QE announcements.  If we don't get an increase in QE at next week's FOMC meeting, how big is the correction?

Mon, 06/10/2013 - 16:21 | Link to Comment LawsofPhysics
LawsofPhysics's picture

sovereign debt must continue to grow or the ponzi explodes.  How much more debt needs to be purchased/printed/born to fund the current deficits?

Mon, 06/10/2013 - 16:54 | Link to Comment negative rates
negative rates's picture

A lot more if interest rates double in 90 days and are payable in 180.

Mon, 06/10/2013 - 18:01 | Link to Comment mt paul
mt paul's picture

enough

to keep GDP growing

by at least 3 %

Mon, 06/10/2013 - 20:26 | Link to Comment g'kar
g'kar's picture

The cure for too much debt is obvious. More debt.

Mon, 06/10/2013 - 19:40 | Link to Comment JPM Hater001
JPM Hater001's picture

how big is the correction?

The biggest one is the comma splice followed by the $400 billion printed needed to pull us to the next full crisis.

 

But the splice is the real problem...

Mon, 06/10/2013 - 16:17 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Oh! the humanity, bitchez!

Mon, 06/10/2013 - 16:42 | Link to Comment TeamDepends
TeamDepends's picture

Yeah, sure!  Hopefully, our royalty check is in the mail?  If no one else remembers, we "predicted" this in a previous thread.  Surely, someone remembers The Hindenburg referenced oh never mind

Mon, 06/10/2013 - 17:12 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Can't respond, watching a "Peter Schiff was right" yootube.

Mon, 06/10/2013 - 17:18 | Link to Comment TeamDepends
TeamDepends's picture

Ya know, where it all went sour is when Mr. T sat on Nancy Reagan's lap........

Mon, 06/10/2013 - 17:31 | Link to Comment spinone
spinone's picture

http://imgur.com/M5pVI

Thats when the USA jumped the shark

Mon, 06/10/2013 - 17:57 | Link to Comment Randall Cabot
Randall Cabot's picture

I see Mrs Reagan sitting on Mr T's lap. Anyway does Mr T still have all his gold?

Mon, 06/10/2013 - 16:21 | Link to Comment Seasmoke
Seasmoke's picture

2007 was a bad year ......So that cannot be good

Mon, 06/10/2013 - 16:55 | Link to Comment tenpanhandle
tenpanhandle's picture

Good year for Napa-Sonoma wines though.  I went very long on the 2007 reds and at the moment am drinking Fukushima free wine.

Mon, 06/10/2013 - 16:21 | Link to Comment Silverhog
Silverhog's picture

How about a WTF Omen. When is that coming? 

Mon, 06/10/2013 - 16:30 | Link to Comment ShrNfr
ShrNfr's picture

You missed it. It was when they elected and re-elected Bammy.

Mon, 06/10/2013 - 16:53 | Link to Comment Lets_Eat_Ben
Lets_Eat_Ben's picture

WTF omen: Alex Jones Vs. Piers Morgan on CNN

Mon, 06/10/2013 - 16:24 | Link to Comment Headbanger
Headbanger's picture

Put on your Nomex and helmets kids..

Make that ballistic helmets kiddies...

Mon, 06/10/2013 - 16:22 | Link to Comment q99x2
q99x2's picture

LULU -8.6%

They seem to be an athletic supporter corporation with no company details.

Mon, 06/10/2013 - 16:32 | Link to Comment EclecticParrot
EclecticParrot's picture

One bright spot:  they seemed to have fixed "sheergate" because, at the moment, I can't see a bottom . . . :)

Mon, 06/10/2013 - 16:56 | Link to Comment negative rates
negative rates's picture

Well somebody means business, and it aint suzie.

Mon, 06/10/2013 - 16:22 | Link to Comment Hulk
Hulk's picture

Remember the Hindenburg !!!

Mon, 06/10/2013 - 16:24 | Link to Comment JohnG
JohnG's picture

I was hoping for a dump on BAH.....

Mon, 06/10/2013 - 16:28 | Link to Comment EclecticParrot
EclecticParrot's picture

Today completely blew, especially the Russell which, on the 15-minute chart, had the classic "Let's-hit-the-stops-one-pivot-down-on-the-first-candle-then-immediately-snap-back-to-where-we-started-and-hang-tight-like-a-constipated-walrus-the-rest-of-the-day" pattern.  Note to algos:  if you're gonna control the markets, at least do it with a modicum of style, pleeeze !

(My guess:  after the nervous nellies sold, there was absolutely no interest in doing ANYTHING by ANYONE, so the only participant was the low-volume short-goosing Russell algo, which has been operating daily since the 2008 lows, but so impotent today it couldn't even go one pivot forward.  Whatsamatter, Algo boy, suffering from 'Low T' ?)

 

Mon, 06/10/2013 - 16:42 | Link to Comment asteroids
asteroids's picture

Hey Parrot: How do you think the week will end? Up or down?

Mon, 06/10/2013 - 16:52 | Link to Comment EclecticParrot
EclecticParrot's picture

I'm a pure daytrader (100% cash at the start and end of each day), so I try to avoid such predictions (which tend to drain my account), and instead look at what my indicators tell me at 10:00.

But, if you twisted my arm hard, I'd say the sons-of-bitches will take us back toward new highs on the Russell, but come just short, but it''ll be on a post-3:45 high-wicked candle that can't be traded, except by Ph.D.'s with Mountain-Dew stained Ralph Lauren polo shirts (pastel colored, of course)

Mon, 06/10/2013 - 17:06 | Link to Comment disabledvet
disabledvet's picture

"bidless markets." ALWAYS dangerous. in that sense day trading isn't all bad since...so long as you stay in equities...you understand the products you're dealing with. (obviously i would avoid any equities with...ahem..."reputational issues"...in other words anything under 5 bucks a share). my view is still on Japan as "though interest rates keep rising in the USA making treasuries very attractive as an alternative to all the other government securities markets." but we shall see. as a day trader i imagine "where JGB's my settle by week end" probably doesn't concern you too much...which is a good thing. oil, the value of the dollar, speculative debt market blow offs--just call it "a days work" be done with done with it.

Mon, 06/10/2013 - 17:20 | Link to Comment EclecticParrot
EclecticParrot's picture

I'll admit the only time I was concerned with Japan was on Thursday, when I made a quick profit on an afternoon short (thanks to the carry trade decapitations), but then sat dumbfounded, twiddling my thumbs, as equities ramped all afternoon.  The Russell has a habit of scaling to Mt. Everest heights while you sit helplessly on the sidelines, and your only recourse is to ask your buddies to bring you back an ice cream bar from up there, which they'll likely provide free-of-charge, given their sudden windfall.

Mon, 06/10/2013 - 18:07 | Link to Comment Randall Cabot
Randall Cabot's picture

I see the RUT algos threw in a little head fake too

Mon, 06/10/2013 - 16:28 | Link to Comment pragmatic hobo
pragmatic hobo's picture

"VIX also didn't play along with equity"

but did you see the flash-crash on VXX into close as SPY got ramped off low?

Mon, 06/10/2013 - 16:39 | Link to Comment ThunderingTurd
ThunderingTurd's picture

Ugh...that is some heavy sell volume.

Mon, 06/10/2013 - 16:39 | Link to Comment sloq
sloq's picture

Just crash already. I need to break out the Jura single malt (raising a glass to George Orwell of course) and am impatient.

Gold, bitchez!!!

Mon, 06/10/2013 - 16:45 | Link to Comment The Thunder Child
The Thunder Child's picture

Haven't tried a Jura malt before is it much like an Islay?

Tue, 06/11/2013 - 00:02 | Link to Comment Ctrl_P
Ctrl_P's picture

Not really.

 

Better malts that are closer to Islay style are Springbank, Longrow (2nd Label) and Port Ellen. That one is closed now, so get in while you can.

Mon, 06/10/2013 - 16:51 | Link to Comment razorthin
razorthin's picture

Stocks "pop"?

Mon, 06/10/2013 - 17:16 | Link to Comment stant
stant's picture

Maybe it's the r101 this time trying to beat qe5

Mon, 06/10/2013 - 17:44 | Link to Comment Lmo Mutton
Lmo Mutton's picture

I still say FU NSA.

Mon, 06/10/2013 - 18:06 | Link to Comment mt paul
mt paul's picture

NSA

knew your opinion 

before you posted it..

Mon, 06/10/2013 - 20:22 | Link to Comment g'kar
g'kar's picture

This should be bullish for the stocks.

Mon, 06/10/2013 - 23:04 | Link to Comment DowTheorist
DowTheorist's picture

Volume is bearish and in tune with the secondary reaction that was signaled last week. The odds favor lower prices in the days ahead:

 

http://www.dowtheoryinvestment.com/2013/06/dow-theory-update-for-june-5-...

 

Nonetheless, the primary trend remains bullish.

Mon, 06/10/2013 - 23:17 | Link to Comment Assetman
Assetman's picture

I didn't get the Hindenberg Omen signal on my technical charts... Lows only hit 2.0% of the total issues on the NYSE, falling short of the required 2.8%.

Every other point on the checklist hit the mark, though.

I'd be the first to tell you I'm wrong, if I could find the evidence on the New Lows.

 

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