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USD Bid As Bonds, Bullion And Stock Bulls Battered

Tyler Durden's picture




 

US equities close weak for the 4th day in a row - echoing last week but without some earth-moving data to save them tomorrow as NFP did last Friday. Bonds and gold were also hit hard and the USD was well bid on the day. The USD is now unchanged on the week though (with AUD down 2%) and 30Y bonds are also practically unchanged (though 5Y is +5bps on the week). JPY crosses were unable to get any traction in stocks before Europe closed but this afternoon saw them recouple and lift stocks back to unch on the day - only to disconnect into the close as stocks tumbled once again. The Russell 2000 ended back below its 50DMA (2nd day in a row) despite a ramp to try and save it. New 52-week lows spike to near 4-month highs. MOMO names rescued NASDAQ a little.

 

New 52-Week Lows are surging...

 

The S&P managed to get back to green on the day but then fell back into the close...

 

JPY carry was disconnected early, regained some afte Europe closed, but then fell apart into the close - something has changed...

 

As the indices fade back sharply...

 

Oddly - look at gold, silver, and oil on the week...

 

As Treasuries are sold...

 

FX markets have seen the USD back to unchanged on the week also... (as AUD and JPy weaken)

 

Seems like the smell of taper in the morning is in the air... which credit has apparently been considerably more anxious about for a while...

 

For those hoping for tomorrow's bounce, there is one ingredient missing - the big short position build up... "most shorted" are pretty neutral after the flush squeeze on Tueasday's open...

 

Charts: Bloomberg

Bonus Chart: The Dow is falling back rapidly to the value of the Nikkei once again... will a taper mean this time is different on a bounce?

 

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Thu, 12/12/2013 - 17:21 | 4240974 Trimmed Hedge
Trimmed Hedge's picture

Please down-vote if you enjoy taking it up the butt by Teh Bernank..

Thu, 12/12/2013 - 17:36 | 4241071 DoChenRollingBearing
DoChenRollingBearing's picture

They keep battering the price of gold down means that my monthly $ investment just buys more.  Fishez!

Thu, 12/12/2013 - 17:42 | 4241090 Trimmed Hedge
Trimmed Hedge's picture

Just imagine if gold were still $20 an ounce...

Thu, 12/12/2013 - 18:14 | 4241216 MummyFunster
MummyFunster's picture

Got PMs, but am seeing Bitcoin as the new savior now.  And I LOVE PMs....

Thu, 12/12/2013 - 17:19 | 4240996 dhussey
dhussey's picture

Market is pricing in a FED Taper...  and stocks hate the sound of it...

 

 https://twitter.com/DanielHusseyJr/status/411243083322232832/photo/1

Thu, 12/12/2013 - 17:24 | 4241016 Beam Me Up Scotty
Beam Me Up Scotty's picture

Sure they do.  My guess, they continue to leak lower next week, and then Friday will be stick save day, when the Fed puts off the taper AGAIN.

Thu, 12/12/2013 - 18:21 | 4241239 Id fight Gandhi
Id fight Gandhi's picture

Exactly. They can't afford a market plunge or a surge in interest rates.

How to play? Get a call option on a 3x index eft, itm, for next month. Sell jan 2nd.

Thu, 12/12/2013 - 18:23 | 4241255 kill switch
kill switch's picture

THEY WILL NEVER TAPER!!!!!!!!!!!!!!!

These idiots have no roach motel escape key......

Thu, 12/12/2013 - 18:06 | 4241162 Lore
Lore's picture

Rinse - Wash - Repeat. Same old cycle of blatant BS.  Wonder how much is actually being printed now:  $200B?  $300B?  $500B?  Roll on, Zombie Apocalypse.

Fri, 12/13/2013 - 06:34 | 4240999 MeelionDollerBogus
MeelionDollerBogus's picture

not to worry, every country in Europe will see positive GDP in 2014!

no really

NO SRSLY.

That's what I'm hearing right now and you better believe when I heard that I was glad my coffee was already safely on the desk.

Long safe treasuries + bitcoin + TWTR!

*edit * to those who gave me red arrows: no, SRSLY, I was listening to a conference call where investors were told that VERY claim. No joke. I'm not saying I believe it, just that I heard it. I sensed a disturbance in the bag-holding side of the force.

Thu, 12/12/2013 - 17:22 | 4241012 Iam Yue2
Iam Yue2's picture

Anyone seen Hugh Hendry?

Thu, 12/12/2013 - 17:47 | 4241118 GaryNeville
GaryNeville's picture

He's up a mountain in Scotland somewhere!

Thu, 12/12/2013 - 18:16 | 4241219 MummyFunster
MummyFunster's picture

He's in Ibex House.  Crying into his books.  Poor lad.  His core beliefs dashed into a farce of a market.

Thu, 12/12/2013 - 17:24 | 4241013 Exponere Mendaces
Exponere Mendaces's picture

I'm sure someone realizes that the new 52-week lows chart is antipersistent? Go ahead, get the raw data and get a Hurst Exponent value. It will very likely be negative, which implies that any positive change on that index will be met with an inverse change after. This chart looks very much like volatility, which has the same characteristics.

I guess what I'm saying is, we've been here before - and then the 600 point rally launches. Par for the course in the broken financial markets.

 

Thu, 12/12/2013 - 17:27 | 4241041 Confundido
Confundido's picture

No, we have not been here before! We now have $85BN/mo in purchases, about half of the tsy mkt warehoused at the Fed, gold basing, Obamacare exposed, an official unemployment rate of 7%, Yellen at the helm, the BOJ seeking to double the size of its balance sheet, and many more months of youth unemployment in the EU at double digits....so NO, we have not been here before!

Thu, 12/12/2013 - 17:39 | 4241079 DoChenRollingBearing
DoChenRollingBearing's picture

Well, yes, I agree.  But, we had never been where we were yesterday either, nor the day before...  Gold is pretty constant though.

Thu, 12/12/2013 - 23:01 | 4242128 Exponere Mendaces
Exponere Mendaces's picture

@Confundido

Granted, we haven't been exactly "here" before in the terms you describe. I'm focusing mainly on how there is a bit of a "red run" then we get spiked in the face with another momentum move upside.

Good catch, you are right on the macro of course.

 

Thu, 12/12/2013 - 17:35 | 4241064 BlueStreet
BlueStreet's picture

Maybe we'll see the 200 day yet before the year is out. 

Thu, 12/12/2013 - 17:38 | 4241075 PersonalRespons...
PersonalResponsibility's picture

"echoing last week but without some earth-moving data to save them tomorrow"

Umm, isn't tomorrow a $7 billion pomo day?  I might be wrong.

Thu, 12/12/2013 - 17:52 | 4241129 thismarketisrigged
thismarketisrigged's picture

bernanke and co have lots of work to do tomm.

 

as we all know, a losing week is not allowed, so that means the dow needs to close 300 plus pts up and s&p up around 35 or so.

 

the printing press will be out in full force tomm.

Thu, 12/12/2013 - 17:54 | 4241138 Panafrican Funk...
Panafrican Funktron Robot's picture

Stress testing the system.  We're dangerously close to 3% on the 10 year.  I am pretty confident we're going to hear that "tapering is premature given the data", based on what happened the last time we almost hit 3% back in September.  As a reminder, we were at 1.4% back in late July of 2012.  We are at 2.9% currently.  That is a 1.5% shift.  Each .01% represents at least a $2 bln move in IR swaps, which means we have moved 150 ticks/$300 bln in a little over 18 months.  That's roughly double the entire market cap of the SPY ETF.  There are a few major banks domestically and internationally that have a lot to lose with a 10 yr over 3%, as in "systemic risk" will start getting urgently talked about above that point.  

Thu, 12/12/2013 - 20:24 | 4241666 NoDebt
NoDebt's picture

Haven't you heard?  The market always "tests" new, incoming Fed chairmen.  All the cool people are saying so.

Thu, 12/12/2013 - 21:13 | 4241774 disabledvet
disabledvet's picture

The Fed has already tapered (this summer) and is now doing the opposite. Shorting treasuries and debt means long a phantom recovery and non-existent inflation while forking over all your cash in a rising dividend environment ("profits are still sky high"). Europe is now rolling over into outright Japanese deflation, the Yen has been obliterated, North Korea could collapse any day now and a Sino-Japanese conflict could break out "before Christmas." in "short" the only thing holding up the shorts in the debt markets is "long energy that cannot be exported and is not battery powered." I would argue strongly that any Sino-Japanese conflict will be battery (and solar) powered as neither has any internal supplies of fossil fuels in order to wage a "real war." Don't want to be long energy here as it will be sitting out this war should this very real scenario play out. You DO want to be long the means of production if this scenario plays out however because "battery tech" will be the winner (the USA will support Korean Unification in any conflict between Japan and China.) The internals for equities do not look good short term (as i said "equities catching down to debt") but the Fed can step in at will and drive those interest rates at the long end down...to zero if need be...and in fact is not tapering right now but in fact is QE'ing after a failed taper attempt this summer. So to repeat a TD meme...only vis a vis Japan and China and "your short debt position" : http://www.youtube.com/watch?v=Uh7tgX_Uaqs

Thu, 12/12/2013 - 17:55 | 4241142 Id fight Gandhi
Id fight Gandhi's picture

Bitcoin and crypto have much to gain when the financial and monetary systems come apart.

You see, nature and humanity find ways to balance itself out when things get extreme. Unlimited money, rigged markets, no real regulation brought about new medium of exchange.

Production (mining), limited supply, decentralized uncontrolled, and acceptance will make cryptos the new alternative to global commerce.

Thu, 12/12/2013 - 18:20 | 4241238 MummyFunster
MummyFunster's picture

Bitcoin modelled on scarcity.  Very clever.  Mimic real world scarcity (oil, gold, silver) and remould for the new interweb generation.  Who are lapping it up! (No hostility towards either PMs or Bitcoin).

Thu, 12/12/2013 - 18:29 | 4241270 Id fight Gandhi
Id fight Gandhi's picture

I love PMs, but I know they will get trashed in the paper market on a sell off.

Paper market and its manipulation still dictates exchange rate.

Thu, 12/12/2013 - 19:07 | 4241441 MummyFunster
MummyFunster's picture

PMs tend to provide comfort for the scared.  That's why I like 'em.

Fri, 12/13/2013 - 00:33 | 4242412 agent default
agent default's picture

Sure, because when monetary systems come apart there will still be full internet access to everyone, so that you can trade your Bitcoins. 

Thu, 12/12/2013 - 18:07 | 4241179 Tsar Pointless
Tsar Pointless's picture

But Fuckface was up big today. So, there!

And is that a head-and-shoulders pattern I detect on the Dow Transports? Ahh, technical analysis. How 2008.

Fri, 12/13/2013 - 02:20 | 4242608 Haager
Haager's picture

"but without some earth-moving data to save them tomorrow as NFP"

 

They'll find some news to explain everything that happens, don't worry about that. Maybe it's some European mouthpiece that engages hope again before the weekend.

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