Hindenburg Vindicated With 9 Of 11 Red S&P Closes And Counting

Tyler Durden's picture




 

Treasury bond yields have risen for 5 of the last 6 days (with the 7Y yield up 35bps in that period) adding 5bps today but since the latest cluster of Hindenburg Omens began to appear, the S&P 500 has fallen for 9 or the last 11 days (-3.6% from the 08/02 highs) and closed below its 50DMA today (on light volume). Today saw 430 new lows (the second highest since Oct 2011) and only 15 new highs. The S&P joined the Dow and the Trannies in the red for the period post-FOMC (June); and only Healthcare, Discretionary, and Industrials remain green from that 6/19 event. The USD ended the day practically unchanged but FX markets were very volatile (AUD and JPY all over the place in the majors and INR in the locals). Commodities in general slid lower by around 0.7% or so in a relativley highly correlated way with stocks. Credit markets continue to underperform, leading stocks lower. VIX was banged back above 15% to its highest close in 7 weeks. Today was the 4th negative close in a row for the S&P - the first time this year.

 

Since the last Hindenburg Omen cluster began stocks have not been happy (again)...

Today marked the 4th day in a row lower for the S&P 500 - the first time this year... Note that stocks have closed at their lows of teh day 4 days in a row too...

 

Since the June 'Taper' FOMC, only the Nasdaq remains green (thank you AAPL)...

 

The Nasdaq managed to get briefly green for the month early on before fading fast into the close...

As most sectors are also red since then...

 

Credit markets have been underperforming since last Thursday...

 

FX markets were very volatile - despite the USD's apparent unch-ness... note the carry unwind began once Europe closed...

 

as AUDJPY was dumped...(biggest carry unwind in 2 weeks)

 

 

And while JPY-carry is crucial to this - the relationships between QE-senstive assets is not perfectly correlated by any means...

 

Finally some context for where we have ben since the Fed first officially uttered the "Taper' comments at the June FOMC... The long bond is down a stunning 7% (in price) since 6/19; Oil, Silver and EU stocks are up 5-8% or so, and the USD, S&P 500, HY Credit (spreads), and Gold are practically unchanged again...

 

Charts: Bloomberg

 

Bonus Chart: Is Treasury Volatility about to collapse or JGBs implode? It seems that each time Treasury Bond price implied volatility gets 5 vols rich to JGBs, we see a correction... will it be 6th time the charm?

 

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