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Stocks Turn Red - Catch Down To Cratering Credit

Tyler Durden's picture





 

We noted earlier in the week how day after day we have seen equity markets rally exuberantly early on, only to fade ingloriously back to credit's less sanguine perspective by the close. It appears, just as we mockingly pointed out on Wednesday's half-day close ramp, that the market seemed to have forgotten that there is a second half to the day and sure enough, as reality sinks in that Taper is nearer than equity asset-gatherers hoped (just as every other market already noted), equity markets are dropping rapidly back to Treasuries, credit, and precious metals' view of the world today... Equity markets have given up all of yesterday's Draghi/Carney jawboning gains...

 

Credit now at 10-day wides (lows), equity catching down...

 

The S&P once again failed to hold the 50DMA... and has dropped rapidly back to bonds/gold

 

Charts: Bloomberg

 


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Fri, 07/05/2013 - 10:31 | Link to Comment Mr. Hudson
Mr. Hudson's picture

Gold and silver just keep getting hammered. $750 an ounce for gold seems realistic. Silver will go to what? $12 an ounce?

Fri, 07/05/2013 - 10:32 | Link to Comment Cdad
Cdad's picture

I'm thinking silver will go to -$5 per ounce...or so...

Fri, 07/05/2013 - 10:36 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I miss ZH's "They can pull Silver out of the earth for $5 an ounce" Meth Man.

I really do miss him/her/it.

Fri, 07/05/2013 - 10:48 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Well, with this massive deflation and prices going down everywhere, the cost of production should be well below $5 bucks fairly soon.

Hey wait, why is crude up @ $102?

 

Fri, 07/05/2013 - 10:53 | Link to Comment Al Huxley
Al Huxley's picture

You can just ignore the price of crude and of gas.  They don't count.  Just be glad there's no inflation and don't let yourself get distracted by incidental shit like rising prices for food and energy.

Fri, 07/05/2013 - 12:06 | Link to Comment Obchelli
Obchelli's picture

Market is back at highs - what is Tyler's comments now?

Fri, 07/05/2013 - 10:52 | Link to Comment disabledvet
disabledvet's picture

three dollars. a POUND. now getting it in your bank is a whole nother story of course. we have an awful lot of Governments now that we have the United Nations. great for debt creation of course. anywho when credit sells off stocks must "catch down." move along.

Fri, 07/05/2013 - 10:45 | Link to Comment Al Huxley
Al Huxley's picture

Yeah, once they start paying me to take silver and gold, I'm really going to load up.  How much money do you think the producers make to pull it out of the ground?  I'm what's the absolute most they'll be able to pay people to take it off their hands before it starts hurting their profitability?  I think I might pose that question to a few of the industry IR departments, maybe they can help me out, but I bet gold costs something like -500/oz all in to dig up and refine.

Fri, 07/05/2013 - 10:35 | Link to Comment El Oregonian
El Oregonian's picture

Wise is the man who knows value in his hands. Paper? It is for starting fires...

Fri, 07/05/2013 - 11:19 | Link to Comment MFLTucson
MFLTucson's picture

Did you sell all 2 coins you have?

Fri, 07/05/2013 - 10:31 | Link to Comment Cdad
Cdad's picture

What?  The jaw-boning catalyst did not hold?  Wow...we are in more serious trouble than I thought.

Good grief...when is the banker clown show/pachinko machine market scheduled to close for good?

 

Fri, 07/05/2013 - 10:42 | Link to Comment 101 years and c...
101 years and counting's picture

DAX showing a bearish engulfing.  needs a big move in last 50 minutes to negate it.  yesterday's jawboning all gone, shows how bad the financial markets really are.  when coordinated cb bullshit and printing over $100B every month no longer works.....well, the depression will win out.

Fri, 07/05/2013 - 10:49 | Link to Comment Al Huxley
Al Huxley's picture

They need to talk louder, and use more emotion in their voices if they want to get this economy rolling - you know, REALLY convince people that they believe what they're saying, that's what's required to restore the industrial sector and get things firing on all 4 cylinders again.  The time for dry, neutral delivery is over, the current situation demands infomercial-style and props dammit!

Fri, 07/05/2013 - 19:48 | Link to Comment StychoKiller
StychoKiller's picture

"Just set it, and forget it!"

Fri, 07/05/2013 - 10:34 | Link to Comment Rastadamus
Rastadamus's picture

Gold's target price? $35 an ounce

 

Fri, 07/05/2013 - 10:44 | Link to Comment El Oregonian
El Oregonian's picture

As history would have it, 80 years ago gold confiscation was ordered which hammered the price of it. But when the government decided that they could "Revalue" gold upwards once it was gathered in their grimy little hands.

Same senario?

Fri, 07/05/2013 - 10:48 | Link to Comment Mark123
Mark123's picture

Same deal this time, only difference is it is going directly into the vaults of private bankers rather than fort knox.  It will be a stunning day when people realize they have no wealth, no power, and no future.  Kind of like one of those apocalyptic sci-fi movies.

Fri, 07/05/2013 - 10:34 | Link to Comment gianakt
gianakt's picture

WTI heading much lower on this dollar break out!!!!!!

Fri, 07/05/2013 - 10:34 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Was that good for you? Cus it was good for me. So.....was it good for you?

<Now where did I put that extra tube of K-Y?>

Fri, 07/05/2013 - 10:35 | Link to Comment Lmo Mutton
Lmo Mutton's picture

I'd pay $50 for a pachinko machine.

it needs to be working and free shipping.

Fri, 07/05/2013 - 10:48 | Link to Comment WmMcK
WmMcK's picture

You may get an entry level (22") machine for $50 locally but shipping free and insuring its condition would be tough for the seller.

Where are you located (approx.)?

Fri, 07/05/2013 - 10:36 | Link to Comment 101 years and c...
101 years and counting's picture

once the bulls give up the 50.  they'll sell.  all at the same time.  grab the popcorn and 12'er.

Fri, 07/05/2013 - 10:38 | Link to Comment marcusfenix
marcusfenix's picture

...and back to green, another traffic light day on wall street.

Fri, 07/05/2013 - 10:45 | Link to Comment Mark123
Mark123's picture

Off topic, but worth discussion:

 

"U.S. prosecutors do not have enough evidence to file criminal insider trading charges against hedge fund manager Steven A. Cohen before a July deadline, the Wall Street Journal reported on Thursday"

 

I guess the "government" is too busy chasing dangerous terrorist-like persons to focus on enforcing the law when it comes to wall street.  How utterly pathetic...is there no champion for what remains of the western world?

Fri, 07/05/2013 - 10:45 | Link to Comment EclecticParrot
EclecticParrot's picture

Hate trading low-volume holiday week days like this, as you have to rely more on instinct. It seems the big boyz may want any bigger decisions to wait until Monday, and I wonder if they'll want to close more than one pivot up or down.

To wit, I just closed out a Russell short at 10:27, after a skiddish 3-trade in-and-out in which I left part of the first leg on the table, and will regret it if we keep plunging.  But if today ends up being a big reversal day, I suspect it will be with a very steep stair-step pattern, with frustrating sudden pushes in the general direction of VWAP that could be indistinguishable from a more substantive rebound.  Not sure about the rest of you, but the key for me on these days is the various volatility measures -- if the VIXs, QQV's, etc keep tracing a general pattern higher, then it's hard to imagine any major turnaround for the bulls today.  Presently, they're attempting to roll over a bit.

Fri, 07/05/2013 - 11:06 | Link to Comment EclecticParrot
EclecticParrot's picture

11:00 UPDATE:  R2K and Q's all the way back to VWAP, S&P and DOW nearly there, engineered with the 10-YR still near 2.7.  Taper and 'good news' schizophrenia continues . . .  (definitely looks like VIX's are a sage to today's action.)

Fri, 07/05/2013 - 10:48 | Link to Comment King_Julian
King_Julian's picture

It seems as if TPTB are confused. I certainly am. On one hand, the political regime wants good news so it can claim credit. Ironically, any improvement is bad for the financial regime as the stated excuse for monetization evaporates. Both camps are lying to themselves and each other for self interest. If prices on gold and silver continue to fall, ZHers will have an epic buying opportunity over the next year. Without ZH I couldn't begin to comprehend this. I'm not sure how this gets spun but the loss of full time work is a direct rebuke of the political regime. That means higher levels of uncertainty and political chaos. If the Fed starts pointing to weakness out of this report and if that conflicts with the political regime message, my confusion will be complete. That would signal to me that they will not taper soon. ( I side with those who think they cannot really taper anyway btw)

Solution: buy a lot more silver and gold, especially if physical prices continue down.

Fri, 07/05/2013 - 11:01 | Link to Comment Bay of Pigs
Bay of Pigs's picture

No jobs, steady inflation and massive debt. Good times ahead for sure...

Couldn't agree more about adding to gold and silver purchases. Seems like 2001 all over again to me. Zero bullish sentiment on PM's right now.

Fri, 07/05/2013 - 10:56 | Link to Comment Bastiat
Bastiat's picture

Here's how it looks to me.

The commercials are long and the hedge funds are record short PMs, as I understand it. The hedge fund are highly leveraged.  

Demand continues to rise in the east and production is dropping.  Singapore just opened a new physical bullion exchange and Russia is doing the same.  So alternate public opinion physical price discovery is underway.

The commercials will win.  The hedge funds will lose large amounts of their clients money but management walks away well compensated.  

Fri, 07/05/2013 - 12:15 | Link to Comment RealityCheque
RealityCheque's picture

I keep doing it and I know I shouldnt. I keep looking at yahoo news.

So many impossibly stupid people and government trolls. And they keep banging the "gold is dead" drum. 

I will be eating these people, post-crash. Starting with the most ignorant.

Fri, 07/05/2013 - 14:51 | Link to Comment soopy
soopy's picture

Markets remembering just fine now.

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