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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Thu, 01/23/2014 - 17:09 | 4360210 Sofa King Confused
Sofa King Confused's picture

The Horror......The Horror.

Thu, 01/23/2014 - 17:10 | 4360214 fonestar
fonestar's picture
Stocks Spanked; Gold Glistens; Currencies Crushed; And Bond Yields Battered

......and Bitcoin is only trading at $940!  (What a fool I was).

Thu, 01/23/2014 - 17:17 | 4360234 Rock On Roger
Rock On Roger's picture

I agree.


Stack On

Thu, 01/23/2014 - 17:23 | 4360258 eclectic syncretist
eclectic syncretist's picture

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

Thu, 01/23/2014 - 17:32 | 4360282 FuzzyDunlop21
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

Thu, 01/23/2014 - 17:52 | 4360335 HelluvaEngineer
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.

Thu, 01/23/2014 - 17:55 | 4360352 NotApplicable
Thu, 01/23/2014 - 19:52 | 4360740 MieleBauknecht
MieleBauknecht's picture

microsoft is already a game company since bald ballmer took over

Thu, 01/23/2014 - 17:17 | 4360238 eclectic syncretist
eclectic syncretist's picture

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

Thu, 01/23/2014 - 17:28 | 4360269 fonestar
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????

Thu, 01/23/2014 - 17:31 | 4360281 Bizaro World
Bizaro World's picture

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

Thu, 01/23/2014 - 18:21 | 4360440 tmosley
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.

Thu, 01/23/2014 - 20:37 | 4360857 disabledvet
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.

Thu, 01/23/2014 - 21:46 | 4361104 Scarlett
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.

Fri, 01/24/2014 - 05:23 | 4361942 Squid-puppets a...
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

Thu, 01/23/2014 - 18:34 | 4360485 SAT 800
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.

Thu, 01/23/2014 - 21:08 | 4360954 SoilMyselfRotten
SoilMyselfRotten's picture

aaannnnnnd it's gone

Thu, 01/23/2014 - 17:20 | 4360243 knukles
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


Thu, 01/23/2014 - 17:26 | 4360254 Ignatius
Ignatius's picture

Go to Walmart.... be happy.

Thu, 01/23/2014 - 17:26 | 4360265 Rainman
Rainman's picture

doing my favorite ghetto dance right now 2.

Thu, 01/23/2014 - 17:55 | 4360349 janus
janus's picture

there ya go, ole buddy.  

now you owe janus 'big'-time.


the looser the waistband/

the deeper the quicksand,


Thu, 01/23/2014 - 17:28 | 4360270 SAT 800
SAT 800's picture

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

Thu, 01/23/2014 - 17:30 | 4360277 Unprepared
Unprepared's picture
Stocks Spanked; Gold Glistens; Currencies Crushed; And Bond Bears Battered

... and Bitcoin Conned

Thu, 01/23/2014 - 17:30 | 4360272 SAT 800
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?

Thu, 01/23/2014 - 17:54 | 4360340 TNT
TNT's picture

Who cares! Marijana stocks are breaking out!

Thu, 01/23/2014 - 18:58 | 4360570 Cattender
Cattender's picture

The Horror INDEED!!!! :-0

Thu, 01/23/2014 - 18:59 | 4360576 Eireann go Brach
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!

Thu, 01/23/2014 - 20:29 | 4360838 franzpick
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"...

Thu, 01/23/2014 - 17:12 | 4360218 Hindenburg...Oh Man
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. 

Thu, 01/23/2014 - 17:20 | 4360247 AL_SWEARENGEN

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

Thu, 01/23/2014 - 17:31 | 4360283 Unprepared
Unprepared's picture

"That will be very appropriate moving forward."

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

Thu, 01/23/2014 - 17:49 | 4360328 Wait What
Wait What's picture

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

Thu, 01/23/2014 - 18:03 | 4360382 AL_SWEARENGEN

That's not a woman.  That's a man, man.

Thu, 01/23/2014 - 18:32 | 4360477 buzzsaw99
Thu, 01/23/2014 - 17:53 | 4360336 Sophist Economicus
Sophist Economicus's picture

The word GHOULISH comes to mind....

Thu, 01/23/2014 - 18:03 | 4360379 TheFuture_MrGittes
Thu, 01/23/2014 - 17:12 | 4360221 Dr. Engali
Dr. Engali's picture

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

Thu, 01/23/2014 - 17:13 | 4360222 LetsDoThisAlready
LetsDoThisAlready's picture

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

Thu, 01/23/2014 - 17:15 | 4360230 OwnSilverPlayMusic
OwnSilverPlayMusic's picture

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

Thu, 01/23/2014 - 17:19 | 4360240 RebelDevil
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:

Thu, 01/23/2014 - 17:43 | 4360294 seek
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"

Thu, 01/23/2014 - 18:29 | 4360462 fuu
fuu's picture

Hail to thee fellow ZH historian.

Thu, 01/23/2014 - 17:54 | 4360346 HelluvaEngineer
HelluvaEngineer's picture

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

Thu, 01/23/2014 - 18:14 | 4360424 Yenbot
Yenbot's picture

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

Thu, 01/23/2014 - 17:14 | 4360228 thismarketisrigged
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.

Thu, 01/23/2014 - 17:21 | 4360251 HpDeskjet
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.

Thu, 01/23/2014 - 17:31 | 4360278 eclectic syncretist
eclectic syncretist's picture

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

Thu, 01/23/2014 - 21:06 | 4360946 franzpick
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.

Thu, 01/23/2014 - 17:14 | 4360229 imbtween
imbtween's picture

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


Thu, 01/23/2014 - 17:20 | 4360244 eclectic syncretist
eclectic syncretist's picture

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

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