Bonds Best, Bullion Battered, But Protection Well Bid...

Tyler Durden's picture

For the 3rd day in a row, traders in credit and equity markets bid for protection. VIX rose 1 vol to 13.5% (diverging notably from stocks) and High-yield and investment-grade credit protection is back at 1-week wides (again diverging notably from stocks). USD weakened back to pre-FOMC levels (-0.4% on the day) led by EUR liquidity needs by the look of it, was ignored by the commodity markets which saw silver and gold tank (gold < $1200) and WTI crude back under $100. Treasuries rallied modestly (yields -3bps) as stocks wriggled sideways on super-low volumes (with NASDAQ underperforming and Dow outperforming to break the new record-high 16,500 level). Homebuilders outperformed even after the dismal home sales data with Energy worst on the day.

Today's S&P 500 futures range was the lowest in 6.5 years...

 

The Dow closed above 16,500  at another record high but note that high-beta Russell 2000 dumped into the close...

 

Managers are protecting gains in stocks...

 

and credit...

 

Commodities - especially precious metals - were hammered... (despite news of the China gold imports dropping 12 hours ago, when it hit Bloomberg headlines it seemed to trigger more selling this afternoon)...

 

The USD fell once again back at FOMC levels...(notice any pattern post-taper? sell European session, buy US session?)

As an aside, while correlation with JPY crosses remains - it is clearly fading (and only in sync during US session today).

 

Treasuries rallied on the day - though most of the strength was during the European session...

 

Charts: Bloomberg

Bonus Chart: Gas Prices have never been higher for this time of year and are at 2-month highs...

 

Bonus Bonus Chart: The TWTR BTFD'ers were out en masse - but had an ugly close as the stock-du-jour closed close to bear market territory...