Stocks Best 6-Day Swing in 20 Months As USD Collapses And Gold Soars

Tyler Durden's picture

If only bellwether stock IBM hadn't indicated that earnings hopes for global tech were in the toilet, the world could be celebrating a new Dow record too. What a day... with stocks flash-crashing (Wal-Mart), bond yields screaming lower (2nd biggest 2-day drop in yields in 17 months to 2-month lows), the USD collapsing to 9 month lows, gold (and silver) soaring by their 2nd most in 16 months, and stocks tractor-beaming up to the Fed's balance sheet year-end target of 1800 for the S&P 500; even the talking heads are lost in explaining the charade. The box that the Fed has put itself in is becoming obvious for all to see - there is no argument that this is 'fundamentals' and so the Fed knows it can never leave as the wedge between perception (prices) and reality (value) has grown too wide... Low volumes in stocks on an all-time high day hardly support anything but doubt as 'safety' is sought in bonds and bullion.

New record highs in S&P 500 and Russell 2000; despite a 70 point drag from IBM, the Dow managed to get back to unchanged!!

The S&P 500 is up 5.3% from last week's lows - that is the best 6-day run since Dec 2011...


With the Nasdaq (and Russell not shown) leading the way off last week's lows...


Off the lows last week, the run in sectors has been impressive with Financials and Healthcare (government aid?) leading the way with massive gains...


How the last 3 days look across asset classes...


10Y Yields collapsed to thei lowest since early August...




Still wondering how it's all possible? Surprised at the rise given not one of your peers is putting fresh capital to work in the markets? Once again, it's all about the marginal carry-based buyer driving up stocks at the algo-driven edge...


Charts: Bloomberg and Nanex

Bonus Chart... WMT Flash-Crash...

Walmart dropped 5.3% in less than 1 second on about 1,000 trades (200K shares) from 11 exchanges and one or more dark pools. Price came to 1 cent of triggering a limit up, limit down (LULD) halt. LULD basically has legitimized sudden large price moves in mega-cap stocks. High Frequency Traders placed and canceled more than 4 orders at the top of book for every trade execution during the drop.

1. WMT ~ Trades color coded by reporting exchange from 15:02:28 to 15:02:55.


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Chupacabra-322's picture

It's shocking how there are actually still people in America defending fake intellectualism. These idiots have somehow weaseled their way into power positions. Meanwhile, the real criminals at Goldman Sachs are hiring former Tier 1 operators like Joe Teti to come and teach them how to secure their 1000 rural acres. Wake up.

SheepDog-One's picture

Secure 1,000 rural acres? Yea, good luck with all that.

lakecity55's picture

Wow, I said earlier today I was going to be checking on the dollar index.

Au looks good, but 1320 is a resistance level, it needs to break thru w/o one of those midnight dump events.

I am waiting on my Black Bart pirate flag to arrive. I plan to remove my Gadsden flag and only fly it on national holidaze.

SheepDog-One's picture

Now all they need is fear/euphoria manic depressive events daily and we'll be at 20K DOW in no time!

NOTaREALmerican's picture

Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market

Spigot's picture

We get ZIRP and QE to Infinity and Beyond with Yellen. And to do that they need the US.GOV to generate more and more debt, so the FED can buy it and create the money out of nothing. Also, with the FED heaviliy in the market, the other bond holders do not dare move out of alignment with the FEDs policies or else the FED will fuck them till they give in. The ceiling for the national debt must go up and up and up and up. The FED's bond purchases must go on and on and on and on.

One thing we do not know is what the FED is doing with the US T's it owns in between its accounting mark dates. My guess is that these bonds are being lent into the shadow banking system to provide collateral for the 100x leverage in that system, but doing it in such as way that no one would know who is providing the T's to plug up the gaping holes that keep reappearing. (JPM/Goldman)

Regardless, just like anything built on lies, one day it will all fall down. IMO we are close to the fall down. Watch the prices of anything which might bid: stocks, commodities, energy, PMs, etc. Watch bond rates. Now that .GOV will be enabled repeatedly, then this probably will be reflected in escallating prices for finite things.

My basis in BTC is about $110 or so. Its now at $140-150, in less than 3 months...

ForWhomTheTollBuilds's picture

In reading about past bubbles fueled by bankers creating paper with wild abandon, I always got the feeling that almost no one knew what was going on but there came to be a general sense of everything rising which eventually would feed on itself leading to an eventual blowoff.


This time it seems like "everyone knows" the central bank is the one holding up markets and everyone is buying because everyone knows this can never end.


Could it actually be different this time? This is gonna be a blowoff for the ages my friends...

NOTaREALmerican's picture

Re:  Could it actually be different this time?

Ya never can tell,  and if you don't play ya can't win.

Better buy now or you'll be priced out forever!

HUGE_Gamma's picture

BONUS CHART!!! we always love the BONUS CHART!!!

Kirk2NCC1701's picture

TD had me at "tractor-beaming".

thismarketisrigged's picture

why the fuck is facefuck up so much after hours?


goog, fb, this shit gets more absurd by the minute,


if you guys recall last time goog reported, they missed big time, stock went down like 30 dollars right away, but was at pre sell off levels the next day,


since they beat today, it will prob be at 1,000 like pcln in no time.

SpykerSpeed's picture

Silver going up to $21.85 is considered "soaring" now?

I think I'll stick with my Bitcoin.  $142.55

Mordenkainen's picture

Is it possible for you to make a comment without mentioning bitcoin?

SpykerSpeed's picture

Bitcoin bitchez.

Better than gold.

AGAU's picture

I can barely focus on ZH with the noise coming from my mining rig, plugged it in yesterday and i've made 0.1 Btc - it heats the house also, what with drawing about 300W power.

SpykerSpeed's picture

I'm not sure why anyone would mine BTC now (it's very unprofitable), but to each his own. 

AGAU's picture

Purely to learn how the whole thing works, small investment, complete failure on my part (left the thing in customs for a week) - but a steep learning curve. I can see that it's going to be unprofitable unless there is a rise back to ~$250

KingdomKum's picture

He can't  -  hiis last name is Winklevoss !!

maskone909's picture

i dont usually rock an avatar.

but when i do,

i use random pictures of men flexing.


thank you and goodnight

SpykerSpeed's picture

Some people aren't muff divers.

TheHound73's picture

Do I have my terminology correct: A rapid gold price decrease is called "manipulation" and a rapid gold price increase is called "reprisal"?

maskone909's picture

i will cream my jeans if gold goes back to 1900

bitgroin's picture

ZeroHedge, may I suggest that you perhaps overuse the word "collapse?" What word will you use when a real collapse comes?

philosophers bone's picture

2% is not "soaring".  Also, aren't we still talking about the paper?  Why do we talk about "paper gold" on the way down, but not on the way up?  It gives legitimacy to something where there is none.  When real price discovery happens, it won't be 2% or even 20%.  More like 200%?  And we won't be quoting COMEX? 

JustObserving's picture

If dollar is at 9 month lows, why are gold and silver not at 9 month highs?

bitgroin's picture

There is a hyperbole bubble on this site and it's going to burst someday.

squid427's picture

Thanks Goldbugger that clip was awesome

Sufiy's picture

Here is what is happening with the real economy:


Gold Catalyst - John Williams: Very Serious Trouble in this Next Year - Weaker Dollar and Hyperinflation

 John Williams is very respected economist who is providing  the real economic data, which is not massaged by the government desires and wishful thinking. His view at the crucial juncture for US Economy and Health of US dollar us very important to share now.   Gold celebrates today "The Deal" and it looks like that Debt Ceiling Raise Does Mean Increase in the Amount of debt after all.


lolmao500's picture

10years yield going down? Lulz?

Element's picture

The tragi-comedy is that this is the reverse-psychology effect of the taper not even being possible, because the investment environment is so destroyed, by the financial system that's pumping the stocks. Just hilarious, bankster algos throwing back LSD and crack cocktails.

And the Chinese downgrade's solid logical discussion is completely irrelevant to a market that's clearly off its rocker. If logic were a part of this, S&P would be well below 1,100.

polo007's picture

According to Deutsche Bank:

October 8, 2013

Bretton Woods III and the Global Savings Glut


History suggests that periods of global economic expansion are characterized by symbiotic imbalances rather than balanced arrangements that satisfy theoretical ideals. Therefore, it is important to understand the factors that drive the imbalances in each period as well as the resulting distortions. In our view, demographics will have a significant impact on the future trajectory of the world economy. In this report we specifically focus on the implications on savings and current accounts.

Population trends imply that we are entering a phase where rapid aging will cause many countries to generate persistent current account surpluses. This raises the question – who will generate the world’s deficits?

World demographics is not neatly spaced out such that some countries generate surplus savings exactly when others need to fund deficits. Moreover, there are many factors that may prevent surplus countries from funding deficit countries. Thus, we have a situation where countries like India, Brazil and Indonesia may attempt to tame their deficits before old countries like Japan and Germany enter their dissaving phase. The resulting savings glut could be further exacerbated by a likely increase in China’s current account surplus.

Thus, the emerging international economic system, dubbed by us as Bretton Woods III, will yet again depend on the United States to act as the demand source of last resort. Meanwhile, demographics will hold down the real cost of international capital whether or not the US decides to absorb part of it. In turn, the ability of world’s financial system to allocate excess savings will be tested again. Young emerging markets with the ability to sensibly deploy cheap capital could benefit disproportionately from this environment.