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Stocks Slumping & VIX Jumping On JPY-Carry Unwind

Tyler Durden's picture


USD strength, precious metal weakness, long-bond selling, and stocks tanking - all on the back of the ultimate driver of exuberance, the JPY-carry trade's leverage. With VIX pressing higher (over 16.5%) and credit spreads widening further, it seems hedges (or simply reducing exposure) into tomorrow's FOMC is the order of the day...

JPY carry unwinds driving the ship...


As VIX is well bid into tomorrow...


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Tue, 12/17/2013 - 12:17 | Link to Comment toe
toe's picture

no taper, 1800 by friday

Tue, 12/17/2013 - 12:25 | Link to Comment slotmouth
slotmouth's picture

My prediction:  No taper, but they will hint at an upcoming taper and we will have an orderly correction.  Then the Fed will have plenty of reason to double down.

Tue, 12/17/2013 - 12:38 | Link to Comment jcaz
jcaz's picture

Yeah, cause the Fed is so good at orchestrating "orderly corrections"....

Tue, 12/17/2013 - 12:41 | Link to Comment Motorhead
Motorhead's picture

No taper, bitchez!

Tue, 12/17/2013 - 14:00 | Link to Comment B.J. Worthy
B.J. Worthy's picture

no taper, 1800 by October.

For the DOW that is.

Tue, 12/17/2013 - 14:31 | Link to Comment gapcrap
gapcrap's picture

2 inches in the waist, and  an inch shorter in the hem

Tue, 12/17/2013 - 12:19 | Link to Comment Dr. Engali
Dr. Engali's picture

It's pretty bad whe 8 pts on the S&P is considered tanking.

Tue, 12/17/2013 - 12:22 | Link to Comment NotApplicable
NotApplicable's picture

It's all about the angle of the dangle.

Tue, 12/17/2013 - 13:03 | Link to Comment Chief Falling Knife
Chief Falling Knife's picture

I've noticed the last 2 days(at least),  the market actually declining during POMO hour.  Signal?

Tue, 12/17/2013 - 13:07 | Link to Comment GaryNeville
GaryNeville's picture

I know its been grim being a bear for last few years but we have to maintain some standards - the markets aren't tanking - the dows off 0.25%

Ohh how I'd love a 3% down day just to laugh at all the BTFD's come in when the markets down .5% and subsequently get their arses handed to them on a plate. Our time will come!


Tue, 12/17/2013 - 12:34 | Link to Comment Al Huxley
Al Huxley's picture

Looks like its up to Facebook to save the Santa Claus rally now.  Even Twitter's slumping.  Do you think they could increase FB's weighting the S&P 500?  You know, give it the prominence it deserves, given its key role in the coming decades of restoring America's economy to its former glory?

Tue, 12/17/2013 - 12:48 | Link to Comment JamesBond
JamesBond's picture

how's .95 for FB to .05 for the rest?  good enough?

Tue, 12/17/2013 - 12:54 | Link to Comment Al Huxley
Al Huxley's picture

Sounds about right.

Tue, 12/17/2013 - 12:51 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Santa? Where did you go?

Tue, 12/17/2013 - 12:59 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Stop wasting time people, math make any "taper" impossible.

Tue, 12/17/2013 - 13:04 | Link to Comment Yen Cross
Yen Cross's picture

     Even if there isn't a taper the statement language will probably be hawkish. The markets are showing signs of cracking even if there's a taper. I would expect any rally to be short lived, and a better level to short from.

Tue, 12/17/2013 - 14:26 | Link to Comment kaa1016
kaa1016's picture

VXX is the biggest short in the market right now. After tomorrow, the VIX curve will normalize with the front end getting smashed lower as the need for near term protection is no more. The implied vol on VXX options will collapse tomorrow afternoon making going long the puts an even better trade.

Tue, 12/17/2013 - 15:24 | Link to Comment bagehot99
bagehot99's picture

Until that trade is demolished by reality.

But I agree; before that time arrives, that's the trade.

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