Stocks Spanked; Gold Glistens; Currencies Crushed; And Bond Bears Battered

Tyler Durden's picture

Quite a day...

  • All-time record lows in many Emerging Market Currencies (TRY, ARS, VENZ (unof.) most)
  • Nikkei 225 -3.75% - biggest drop in 7 months
  • Emerging Market Stocks -3% - (4 month lows)
  • USD Index -0.7% - biggest drop in 3 months (2014 lows)
  • USDJPY -1.3% - biggest drop in 5 months
  • AUDJPY -2.35% - biggest drop in 7 months (4 month lows)
  • Dow -1.3% - biggest drop in 5 months (5-week lows)
  • 30Y Treasury Yield -9bps - near biggest drop since April 2013 (2-month lows)
  • Gold +2.3% - biggest gain in 3 months (2 month highs)
  • VIX +1.8vols - biggest jump in 3 months (1 month highs)
  • IG Credit +2.5bps - biggest jump in 5 months (1 month wides)
  • HY Credit -$0.5 - biggest drop in 4 months (1 month lows)

It seems that without the safety net of Fed flows, the reality that bad news might just be bad news and event risk is a real risk just started to hit home. The deer is back...



Early weakness on the China PMI contraction dropped US equity futures to Tuesday's congestion zone then BoJ being less than dovish provided further weakness to Tuesday's lows and despite almost CNY 400 billion in liquidity this week, short dated repo rates are not recovering notably in China (and CDS continued to widen). Data in the US was weak (with 1.4 million dropping off the rolls of EUC and existing home sales missing) and European data improved (hurting the USD further)... so having said all that - it seems foolish to pin today's weakness on any or all of this "news" - simply put, JPY strength (particularly AUDJPY thanks to AUD weakness on China and JPY strength on BoJ) dragged the major stock indices in Japan and the US lower and carry trades were unwound en masse...


AUDJPY vs S&P 500...


Trannies didn't bat a well-mascara'd eyelid today as the rest of the world slumped... leaving the gap between Industrials and Transports as big as we can remember...


Since the taper, things have escalated for Healthcare and de-esclated for Discretionary and Homebuillders...


Notice today's bounce began when the Dow tapped its Taper-day highs


The late day ramp was funded by VIX selling...


which enabled the S&P to recapture VWAP perfectly...


Gold and Silver surged today - as did WTI oil (slamming Breant-WTI to 6 week lows)...


Credit markets widened notably and stocks played further catch down...


Treasury yields tumbled today...


Charts: Bloomberg

Bonus Chart: Emerging Markets ETF tumbled notably...

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Sofa King Confused's picture

The Horror......The Horror.

eclectic syncretist's picture

And Microsoft is apparently now a video game company.  I wonder what the NSA has inside the Xbox one?

FuzzyDunlop21's picture

Dear Lord Bernanke and Grand Poomba Yellen,


Thank you for this glorious opportunity to BTFD. I shall sacrifice a libertarian on your alter tonight.


Eternally grateful,



The Sheeple of the World

HelluvaEngineer's picture

Seriously?  That thing can tell who is in the room, record everything they do or say, and practically give them a TSA-style body scan.

MieleBauknecht's picture

microsoft is already a game company since bald ballmer took over

eclectic syncretist's picture

With only 50,000 transactions a day bitchcoin is a sorry joke, mr. pump and dump.

fonestar's picture

I really wish I had just listened to you guys when BTC was < $50, cashed out and gone into silver and paper rectangles under my matress!  What was I thinking????

Bizaro World's picture

You were thinking Short Term...Long term, BTC will be manipulated like all other non-phys assets.

tmosley's picture


For extra credit, how could it be done any worse than what has happened to gold and silver?

They can only sell their stolen bitcoins once.  They can print all the paper gold, paper silver, and plain ol' paper they want to keep you in poverty.

disabledvet's picture

who needs paper when you have bitcoin? I mean "congratulations newly promoted Mr. Bank President...all your deposits are on the laptop sitting on that desk there."

No wonder they have the red phone in Batman.

Scarlett's picture

Love both gold and bitcoin.  But as comex seems to be going the way of the Dodo, gold is my fave right now.

Squid-puppets a-go-go's picture

yerp. it just needs one last push.

Hey fonestar? sell all your bitcoins for phyz gold now and we can kill the beast and us gold holders will be fabulously wealthy by round about tea time

SAT 800's picture

February Gold shows a volume of 195,000 contracts today; and it's up another $1.80 after the New York Close.

knukles's picture


Now that's what I'm a talkin' about.
Things unglued sooner or later fall apart and when they do, the flight to quality begins... loving of gold and bonds....
It don't get any better than this.

This makes the Knuks Happier Than A Fat Lady in Spandex


Ignatius's picture

Go to Walmart.... be happy.

Rainman's picture

doing my favorite ghetto dance right now 2.

janus's picture

there ya go, ole buddy.  

now you owe janus 'big'-time.


the looser the waistband/

the deeper the quicksand,


SAT 800's picture

Your use of the past tense implies that you are not now a fool. This is incorrect.

Unprepared's picture
Stocks Spanked; Gold Glistens; Currencies Crushed; And Bond Bears Battered

... and Bitcoin Conned

SAT 800's picture

I don't see where the problem is; I'm up $3600 on my shorts on the S&P500; what exactly am I supposed to be worried about?

TNT's picture

Who cares! Marijana stocks are breaking out!

Eireann go Brach's picture

Don't abuse the Deer Tylers! He should only be brought out on special occasions, like a fine Scotch whiskey, not on a -.8% move on the S&P!

franzpick's picture

The deer we saw coming out of the financial woods was a doe, and the look in her eyes said "I'll never go in there for 2 bucks again"...

Hindenburg...Oh Man's picture

I wouldn't really use a deer-in-the-headlights. I'm following the e mini 100 NASDAQ, and it's almost back entirely after hours...moved from almost 1 percent down by 2pm, to .30 down or less by the close, higher after hours. Not even a loss on a "correction day". Something starting banging the NASDAQ higher right at 2 pm. Perhaps someone at Davos didn't want his/her night ruined, so made a few phone calls, sent a few emails. 


We need a 'Yellen in the headlights' picture.  That will be very appropriate moving forward.

Unprepared's picture

"That will be very appropriate moving forward."

Yes, and at fall speed. The windshield be damned.

Wait What's picture

<---- Yellen in the headlights? obviously you haven't seen this one.

Sophist Economicus's picture

The word GHOULISH comes to mind....

Dr. Engali's picture

Uhmm about that taper thingy........ Never mind.

LetsDoThisAlready's picture

Someone please explain the deer to a hedge newbie. Deer in the headlights? What is the back story?

OwnSilverPlayMusic's picture

Yep, simple enough, deer in the headlights.  What we're ultimately looking at though is a frog in a boiling pot.

RebelDevil's picture

I wondered the same until I used my inuition.

The collapse of Bear Stearns and Lehman were "Deer in the headlights" moments, where a deer runs in front of your car while driving and you only have a split second to avoid the crash if at all.

Keep in mind history as well:

seek's picture

Deer, as you may know, freeze in panic when they suddenly see headlights coming at them.

At ZH, the deer is a metaphor for uninformed investors (aka "muppets," another ZH-ism with a mangled Kermit muppet in the street picture) freezing in panic when the markets suddenly turn against them. Note that "uninformed investors" can also be large banks caught off-guard by a sudden glimpse of reality.

The deer may have been used prior to the current form of the blog (back in the blogspot days) but the earliest appearance in context appears to be in August, 2010:

Other trivia: google image search has named this image "deer in headlights zerohedge"

fuu's picture

Hail to thee fellow ZH historian.

HelluvaEngineer's picture

Also an extremely effective and completely illegal way to hunt deer.

Yenbot's picture

But only from a 4x4 or semi with hella pushbars...

thismarketisrigged's picture

i love down days like today, but i have seen this script all too often over the past few years.


if we have another triple digit dow loss tomm and double digit s&p loss, although i will not be totally convinced yet, i will feel a little more convinced.


until otherwise, i cant take the bait, and i need to be prepared for another bullshit rally that wipes away all of todays losses and adds some gains.

HpDeskjet's picture

Agree. We need a couple of days in a row like this to make the stupid momentum buyers turn. But that can happen on short notice. Next week another FOMC with a very likely 10bln taper, the drop in yields today will make the FED much more comfortable doing that. I told many ppl around me already for long QE-on = risky assets up, rates up. QE-off = risky assets down, rates down. But very very very few want to listen.

eclectic syncretist's picture

Remember how empty the first several lifeboats to leave the Titanic were?

franzpick's picture

My screens say that today was a turning point, that 1-2 year uptrends have been or are about to be pierced, that psychology may have broken, and that the money managers who put in a great 2013 year, can have another good year going on defense in a dismally down 2014.

Violates the successful 50 or so year rule of buying the mid-term and selling the presidential, but then maybe rules were meant to be broken.

imbtween's picture

I can feel it in my bones - tomorrow morning's metals smackdown is going to be one for the record books.


eclectic syncretist's picture

The fed is tightening - that's all you need to know.  It's really that easy.