Market Echoes June 2012 FOMC As Dow Swings Most Since Oct 2011

Tyler Durden's picture

For the sixth day in a row, the Dow managed a triple digit gain/loss - the first time since Sep/Oct 2011 - as markets appear to playing out a perfect echo of last year's June FOMC meeting with a ~3% 4-day gain in the run-up to the decision only to give it all back in the next few days. In the same way as last year, despite the rally in stocks, VIX (hedging) is rising, credit is diverging (hedging), and bonds are bid (though this appears more a Taper-off trade this time). Today's volume was among the lowest of the year (even accounting for holiday trading days) but that didn't stop the Dow ended up within a Hilsenrath headline of its all-time highs (though VIX near YTD highs, credit near YTD high spreads, and bonds close to YTD high yields). Silver, gold, and copper were hit hard today (-1.8% on the week) as WTI surged back up to $98.50; the USD retraced back to unchanged on the week (JPY -1%); Treasury yields are now up 4-5bps on the week (unch today); and while stocks looked good off the Friday surge, the last few minutes today saw them give back some of the exuberance back as hedgers turned to sellers (helped by a smash'n'grab in HYG) but all-in-all, equity investors seem very confident that Bernanke won't let them down.

Sixth day in a row of triple-digit moves...


and this is what happened at last June's FOMC... when everyone it seemed was convinced QE3 was coming (and was disappointed).


But the last couple of days' exuberance in stocks is tempered by hedging in stocks...


and credit...


The USD is unchanged on the week as EUR is rising and JPY is weakening...


WTI surged as copper, silver and gold all fell in line on the week...


Charts: Bloomberg and Capital Context

Bonus Chart: The Great Recoupling...

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SheepDog-One's picture

The only purpose for the pump is the ensuing dump. Probably just see another +1.5% across all markets (except gold) tomorrow though I'm sure.

'Equity investors' quaint. Hey do they have an ETF where I can actually invest IN 'equity investors' I wonder? Nah probly not.

flacon's picture

These markets don't have a chance in hell. To taper or not matters not at this point. It's all down hill from today on. We are already in a bear market and few people realize it yet. 

slightlyskeptical's picture

You are kidding right? The Fed's whole hope rides on Wall Street rising. They certainly aren't going to disappoint at this juncture. I think they add more easing and the S&P rises 100 points tomorrow.  Don't fight the Fed!

flacon's picture

How did that work out for Abe? He got the mother-fuckin'-orgasm for two or three months and then BAM! Fed is much too smart to replicate what Abe failed at. Afterall Japan is mererly the nuclear testing grounds for Ben Bernanke's escapades. Tomorrow they will annnounce an increase of 10% in QE. Markets will TANK. Tomorrow they will introduce a -10% increase in QE. Markets will tank. 


We are finally at that catch 22 position that we all dreamed about. To QE or not to QE that is not the question - the question is when QE becomes a four letter word no matter how it's said. It's all DOWN HILL from today. 


The only thing that would redeem the markets would be a MASSIVE increase in QE, like 10 fold. If we got $850 billion per month, THEN I WOULD GO LONG THE MARKETS. Other than that, this measley $85 isn't enough to get a hard on. 


Groundhog Day's picture

So your sayin i will finally breakeven on my long fas, tna, and iyt puts?  How about my gld calls? been getting smoked in those as well.  Not trying to be sarc.  I've just been beaten down so many times i no longer have to will to get back up

DeadFred's picture

You assume the actual goal of the Fed is a healthy economy through the wealth effect. This is what they say but might they be liars with less honorable intentions?

DavidC's picture

Not sure about the near term - we're coming to the end of the month and end of half year. If Benny boy says the 'right' things tomorrow it could hold up for a bit longer. What do I know though in these 'markets'?!


Panafrican Funktron Robot's picture

Either the Fed keeps buying at current or higher levels, and available tier 1 capital continues to dry up (queue liquidity crisis), or the Fed stops buying, and, well, we all know what happens there.  

The only thing that will actually fix this is moar USG spending, and fast.  Queue the war bonds.

Divided States of America's picture

I agree sheepdog but I think I may be all dumped out before that happens.

Lets Buy The Dip's picture

there are going to be massive swings every fed day. They love to take money off the amatures tomorrow on the fed day. I like to wait 30mins until after the announcement. 


El Viejo's picture

Dippity Doo Dah

<<< My oh My Someone is having a bad day.

spastic_colon's picture

ever notice how we get "hilsenrathed" right around the bottom of the November trend?

88888's picture

The June FOMC chart looks like a christmas tree. 

thismarketisrigged's picture

i really fucking hate these asshole bankers on wall st. they can all die as far as im concerned.


its like, no fucking volume, and yet this market just finishes up 140 pts on no news. 


its like they were pumping it up so if bernanke does disappoint tomorrow, the sell off would be from the 15,320 level rather than the 14,900 level.


its such a ponzi scheme and i really hope all these assholes get taught a lesson one day.

SheepDog-One's picture

Can you believe we actually used to mock and laugh at Zimbabwe a couple decades ago? If anyone would have said 'We'll be doing the same but on a far larger scale by 2013' they'd have called you crazy.

slightlyskeptical's picture

Not doing anything like Zimbabwe. They were adding several zeros a week to their money.

buzzsaw99's picture

we don't need no stinking volume

Yen Cross's picture

 The village idiots are out today buzz.

Yen Cross's picture

  Long VIX   And the quirkiness of Yahoo.


denverdolomte's picture

Bennie and the Bets......

Hey kids, shake it loose together
The spotlight's hitting something
That's been known to change the weather
We'll kill the fatted calf tonight
So stick around
You're gonna hear electric music
Solid walls of sound

Say, Obama and Joey, have you seen them yet
But they're so spaced out, Bennie and the Bets
Oh but they're weird and they're wonderful
Oh Bennie she's really keen
She's got electric boots a mohair suit
You know I read it in a magazine
Bennie and the Bets
Hey kids, plug into the faithless

Maybe they're blinded
But Bennie makes them ageless
We shall survive, let us take ourselves along
Where we fight our parents out in the streets
To find who's right and who's wrong


"he's been there longer than he expected to be....." /sarc all of it.

EclecticParrot's picture

We must be on the same wavelength, as I made a similar Elton John post a few weeks back:


B-B-B-Bennie and the Feds

Oh, these low rates are so wonderful

That Bennie, he's really keen


The Dow's electric moves

I just can't lose

You know I read it all in Time Mag-a-zine

B-B-B-Bennie and the Feds

denverdolomte's picture

Hahah awesome, i just heard the song on the radio and started singing Bennie and the Bets for some reason. 

EclecticParrot's picture

Sad to admit I had this on 8-track when it was originally released at age 11.  Hope you're not quite as old :)

EclecticParrot's picture



My my, hey hey

Low-volume shit is here to stay

There’s less to the picture than meets the eye

Hey hey, my my


Trading’s gone but it’s not forgotten

We’d make more money picking cotton

Now that it’s gone it may never come back

We're all into the red, and out of the black

syntaxterror's picture

It's like watching the heroin street addicts buzz around waiting for, and then getting their smack; then scurrying away as fast as possible once the smack is in hand.


cassotto's picture

still short, but nearing capitulation ><

Lady Heather...UNCLE's picture

Thank you Eclectic Parrot....SO funny

EclecticParrot's picture

Thanks, Mom.  Does Dad know you have a ZH handle ?

Yen Cross's picture

 NSA Bird. Find another branch to land on.

EclecticParrot's picture

Branches can be tricky.  I'd prefer your non-vertical, gently sloping forehead.

Lady Heather...UNCLE's picture

No!!...and you are NOT to tell him. Daddy Parrot has enough on his birdbath.

Beam Me Up Scotty's picture

Can we see your full profile picture???

orangegeek's picture

Yep - the powers to be have jacked these markets beyond reproach - and the anger is evident here.


But out in the real world of fake, it's actually very positive.  Euphoria at tops - renewed optimism on retracements.


The S&P500 is retracing - but major falls don't usually occur on news - they usually come by surprise.

Totentänzerlied's picture


SKY85hawk's picture

Dear Tylers,  Re: your 2013 FOMC SPY display, above

How is a SPY 1363 to 1315 a huge deal?  3.3% isn't trivial. 

But, what about the move 1313_ 06/25/2012  to 1417_09/07/2013  +7.9%  ?

We all have charting systems

What's your point here?