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Twirmoil Strikes; Treasury Yields Surge To 29-Month Highs As EURUSD Insanity Ensues

Tyler Durden's picture





 

TWTR collapsed ~15% off its highs (losing 1 BBRY or 2 JCPs) and FB tumbled 4%. Stocks overall broke their winning streak with a modestly red close but it was the action in the bond, commodity, and FX markets that stood out. Following copper's flash smash Tuesday, gold and even more so silver held their gains from the surge yesterday and pressed higher still today (silver's best week in 4 months). WTI crude closed at 2-month highs above $100. A massive range day in the USD driven by a EUR surge to test 1.39 (2-year high and fail) swung the world's reserve currency down 1% and back up 1% (in a mini-Bitcoin-like panic). Yield rose modestly on the day with 10Y crossing 3% early on, pulling back, then hovering there into the close for the highest close in 2.5 years. VIX was a one-way stret higher all day. All in all - a glance at these charts will make you wonder WTF...

 

Twirmoil!!

 

TWTR offers a big dip to buy... or is it over?

 

Stocks overall trod water today after a breathless rally in the last few days...after the 2nd best 7-day run in 15 months

 

VIX continued to disconnect as hedges were locked in...

 

and Credit diverged once again (tracking VIX!)...

 

Treasuries rose 9-11bps on the week...

 

with 10Y closing above 3% for the first time since July 2011...

 

Commodities were a mess this week... just look at this idiocy - this was Silver's best week in over 4 months!

 

And look at the vol in FX today!!!

 

EURUSD is supposedly the most liquid FX pair in the world... it roundtripped over 1% today - and people laugh at Bitcoin...

Behold - The Circus Tent Formation...

 

Charts: Bloomberg

 

Bonus Chart: Think US stocks did well this year, ythink again... we give you Venezuelan equities - coming to a US exchange near you soon...

 

Bonus Bonus Chart: What happened the last time Treasury yields were this rich relative to stock dividend yields?

 

 


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Fri, 12/27/2013 - 17:11 | Link to Comment Clayton Bigsby
Clayton Bigsby's picture

Andale!!! Viva la Revolucion!!!!

Fri, 12/27/2013 - 17:32 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

LINE OF DEATH®!!!!

Fri, 12/27/2013 - 19:39 | Link to Comment Scarlett
Scarlett's picture

 

 

The printpocalypse is coming.  

 

I see dead money.

Fri, 12/27/2013 - 21:50 | Link to Comment Jumbotron
Jumbotron's picture

So much for the taper.

Fri, 12/27/2013 - 21:49 | Link to Comment Jumbotron
Jumbotron's picture

I guess it depends on what the definition of taper is.

Fri, 12/27/2013 - 17:10 | Link to Comment malikai
malikai's picture

That EURUSD move makes no sense.

My A model shows a round trip of about 4 standard deviations and almost complete closure in 1 day!

Fri, 12/27/2013 - 17:17 | Link to Comment Al Huxley
Al Huxley's picture

Looks alot like the Russell 2000 on the 23rd.  Wow, these are exciting times when major indices and currencies trade like penny stocks!  I'm so proud of our civilization!

 

Best explanation I can think of is that 'an important person' had a large EUR position they needed to exit and they wanted to do it at a profit.  I guess that's probably what happened with the Russell on the 23rd as well.  It must be nice to own the markets, to be able to dictate the prices things trade at - how could you not 'buy low and sell high' with that kind of power?

Fri, 12/27/2013 - 17:38 | Link to Comment malikai
malikai's picture

Well, if I knew where everyone's stops are at, and I could borrow from uncle ben for nothing, I could make miracles happen too.

Fri, 12/27/2013 - 18:22 | Link to Comment Colonel Klink
Colonel Klink's picture

I'm sure the NSA and front running HFTs know.

Fri, 12/27/2013 - 17:13 | Link to Comment Al Huxley
Al Huxley's picture

Ben must be really pleased with the robust signs of strength in the economy as he leaves the FED - look at that 10 year go Ben, things just keep gettin' better!

Fri, 12/27/2013 - 17:16 | Link to Comment HUGE_Gamma
HUGE_Gamma's picture

I came here for the BONUS CHART!?!?!

Fri, 12/27/2013 - 17:23 | Link to Comment fooshorter
fooshorter's picture

BONUS BONUS CHART!!

Fri, 12/27/2013 - 17:40 | Link to Comment Yen Cross
Yen Cross's picture

  Here's your bonus chart.  Enjoy!

Fri, 12/27/2013 - 18:56 | Link to Comment forwardho
forwardho's picture

It looks like a scary monster!

Thanks Yen, for all you have added to the site this year.

Fri, 12/27/2013 - 19:07 | Link to Comment Yen Cross
Yen Cross's picture

 " Happy New Year", my friend. May you and your family have a healthy and prosperous 2014.

Fri, 12/27/2013 - 20:34 | Link to Comment malikai
malikai's picture

It's a Pacman Ghost pattern.

Somebody better pull out a big circle pattern or we're doomed.

Fri, 12/27/2013 - 20:56 | Link to Comment Yen Cross
Yen Cross's picture

  Winner-winner...chicken dinner!

Fri, 12/27/2013 - 17:19 | Link to Comment Yen Cross
Yen Cross's picture

   I'm lovin a short usd/jpy with a stop above the 105.40/50 area. That gap from Christmas needs to get filled. I'll risk 40-50 pips for 80-100 on a short trade. Especially after that usd rampfest today.

Fri, 12/27/2013 - 18:01 | Link to Comment slotmouth
slotmouth's picture

Only a communist would short usd/jpy.

Fri, 12/27/2013 - 18:20 | Link to Comment Yen Cross
Yen Cross's picture

     Are you suggesting that Abe and the BoJ are capitalists?

 This gap needs to get filled. http://imageshack.us/a/img32/3456/3taz.png

Fri, 12/27/2013 - 17:21 | Link to Comment The-Dirty-Scurd
The-Dirty-Scurd's picture

 i wonder if this is like when a dam starts cracking and leaking. while repairing one leaking spot of the cracks another leak springs. eventually it crumbles from instability? but i guess that doesnt really apply because dams and water are real but paper money and all the paper iou of any kind arent. does reality give way to fanstay or will fantasy give way to reality? eventually i think fantasy gives way to reality but wtf indeed.

Fri, 12/27/2013 - 17:21 | Link to Comment Al Huxley
Al Huxley's picture

I wonder how many TWTR retail investors are familiar with the dynamics of penny stocks?  Oh well, I guess it doesn't matter, they will be soon enough...

Fri, 12/27/2013 - 17:34 | Link to Comment ebworthen
ebworthen's picture

The Ten Year closing above 3% made my Friday.

Fri, 12/27/2013 - 17:35 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Is "The Sky is Falling!" again? 

Enough with the fourth season of "Sneak Previews"!  Wake me when the Main Feature starts. 

Fri, 12/27/2013 - 17:36 | Link to Comment One And Only
One And Only's picture

This is why fiat can't be a currency. It's too volatile. One minute it's worth one thing next minute it's worth another thing and over the course of 100 years a dollar has lost 98 percent of its value. How can anyone conduct transactions with dollars?

Fri, 12/27/2013 - 17:59 | Link to Comment caShOnlY
caShOnlY's picture

How can anyone conduct transactions with dollars?

We don't.  We use credit or credit money.   Simple little comparison: 

Income money residual = savings.

Credit money residual =     debt

Look at it this way:  Need some good economy? sign people up for mortgages they can't afford.  Want to sell more cars? just need some signatures! Want a nice holiday shopping season? just flood mailboxes with credit card apps that take less than 5 minutes on line to apply!  Need some retail enhancement? Home depot, Lowes, Macy's, JC Pennyays, Sears, Walmart, ETC........ all credit cards just waiting to be used!!!

The above demonstrates the problem with FIAT.   When your nation is surviving on credit money it's FIAT is destined to FAIL.  See: China buying gold and lots of it!!   Call it a "chinese hedge".

 

 

Fri, 12/27/2013 - 17:38 | Link to Comment debtor of last ...
debtor of last resort's picture

Second best 7 day run in fifteen months. Fuck. I had a few beers and the real stuff comes in.

Fri, 12/27/2013 - 17:45 | Link to Comment debtor of last ...
debtor of last resort's picture

BTW, it's the Carcas stock index. Not Caracas.

Fri, 12/27/2013 - 17:49 | Link to Comment adr
adr's picture

It really is too bad this insanity has real world repercussions. If not this would be hysterical to watch.

Instead I'm furious that another $8 was taken out my my pocket to fill my car over last week.

Fri, 12/27/2013 - 18:05 | Link to Comment monopoly
monopoly's picture

Love the end of day recap. Always refreshing. And it is so nice to know that the ONLY reason the 10 year closed at 3% is because we are so close to Shangri-La. An economy on the mend, employment up, housing on a rebound. A strong dollar. Medical care for all at minimal cost. (cough, cough).  And now govt. working so well together adding to the spending that we cannot afford. Ahh yes. Since we are doing so well it is only a matter of time before we hit 3.5% and then 4% on the 10 year bond. We will really be on a tear than. It will be Nirvana. Just Perfect. Thanks Ben, what a fantastic job you did. And all this with less than 18 Trillion dollars in debt that can never be paid and less than 50 million Americans still on a food CC from our govt. The Hamptons say Thank You Mr. Chairman and especially to you Mr. President. 

What a country. Who needs company benefits. This Is Amerika!

Fri, 12/27/2013 - 20:22 | Link to Comment starman
starman's picture

Thanks monopoly that was beautiful, almost made me cry. Lol

Fri, 12/27/2013 - 18:37 | Link to Comment sschu
sschu's picture

There was a post several months ago about the 1970s and the price of gold and the correlation with bond yields.  The poster's point was that the price of gold did not take off until bond yields increased significantly during that time.  When yields increased back then, the price of gold went up 8x.    

Jellen cannot think this is good news.  If they lose control of the 10 year yield, then who knows where it ends.

Is it time?

sschu

Fri, 12/27/2013 - 19:13 | Link to Comment starman
starman's picture

when the apple trees branch has to many apples it does brake by its own weight. " from my grandpa"

Fri, 12/27/2013 - 19:57 | Link to Comment Downtoolong
Downtoolong's picture

Could it be? Is it possible? Like a blast of nostalgia from the past a human trader must have finally looked at the markets. What they discovered, which apparently no smart-tech algo had yet done, is that for all practical purposes a 2.99999% yield on the ten year is the same as 3%. 

Fri, 12/27/2013 - 21:29 | Link to Comment fuu
fuu's picture

Marla said we would see some shit, Twirmoil would seem to fit.

 

Gold and Silver Eagle sales by the US Mint for 2000-2013: http://i.imgur.com/jHGjQ28.png

Fri, 12/27/2013 - 21:01 | Link to Comment Spigot
Spigot's picture

What's really great is that last chart TNX rate vs S&P dividends. Looks to me that almost all dividents come from investments in TNX. Any TNX above 2% is a big, fat dividend check in the mail! The correlation is probably above 90% on that one.

Fri, 12/27/2013 - 22:02 | Link to Comment disabledvet
disabledvet's picture

Detroit wasn't good enough apparently.

Sat, 12/28/2013 - 08:56 | Link to Comment SheHunter
SheHunter's picture

Great cartoon. And by the by it was OpEx Friday.  The AMZN/TWTR/TSLA/BIDU/ETC jumps were MaxPain moves.  Wash/Rinse/Repeat.

Sat, 12/28/2013 - 14:59 | Link to Comment papaclop
papaclop's picture

I can't believe how these clowns (Bernanke, Krugman etc) thiink they can manage and control the billions of transactions that make up the economy.

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