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Markets In Turmoil; 3rd Red Day In A Row For Stocks

Tyler Durden's picture





 

"You can't go up forever," noted Bob Pisani before piling on a series of excuses for the recent 'weakness' that quite frankly could have been used at any 1.1% drop in stocks of the last 3 years... While stocks bounced off lows today and are making the headlines for a third down day for the first time in 2 months, the real story that most are ignoring is the surge in the JPY. The USD is legging lower confusing the 'Taper' chatter but it is the JPY strength that is dominating (up 3.6% against the USD in the last 4 days (and the Nikkei futures -800 from Friday's highs). Treasuries rallied 3-4bps (and the curve flattened) as it seems the modest weakness in stocks is being met with some safe-haven demand. Despite bonds' bid, Homebuilders were battered (-4.5% on the week). Gold and silver strengthened off pre-open lows as WTI fell back to around $104. VIX spiked to 13.9% at the open but ended around 13% at the close. Back to CNBC for the close: "off the lows," but not in credit Maria...

 

The Nasdaq did its best to scramble back to the green (but failed) as the opening down-draft was modest buying through the day. Volume dominated on the downswing...


 

JPY Carry unwinds en masse... This is the most rapid 4-day appreciation in the JPY  (ex June's Taper collapse) in over 2 years...

 

as US equities catch back down to Treasuries view in the short-term...

 

As Homebuilders continue to slide getting no help this time from US Treasury yields dropping...

 

But as a reminder - since the Taper talk on 6/19's FOMC, things are quite different...

 

While stocks bounced on the day... credit ended at its worst levels...

 

Equity hedgers were in last night and carried through this morning... but vol compressed back in line with stocks by the close (so little squeeze ammo there)...

 

and Shorts pushed at the open today but closed near the market (with some weakness suggesting the squeeze ammo is weak there also)...

 

Charts: Bloomberg

Bonus Chart: Recouplin' anyone?


 


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