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Bruised And Battered Stocks Wave Bye Bye Ben

Tyler Durden's picture





 

Asset-gatherers and talking-heads are in full panic mode. Stocks tumbled ince again today and there was very little "off the lows" talk. The "turmoil" panic in the hearts and minds of every Wall Street strategist palpable as the Fed failed to save us from another down day. Trannies, Russell, and the Dow are down around 5.5% from their highs; the S&P down around 4%; and the Nasdaq around 4.5% from its multi-year highs last week. Today's plunge of over 35 points the S&P futures from the "where are all the sellers, EM is fixed" post-Turkey highs at 1801 is a very sizable outside range day. Of course it was all about the ongong unwind of levered JPY carry trades as 102 becomes crucial to any bounce in stocks. VIX rose 1.7 vols to 17.5%; credit spreads popped notably wider post FOMC; EM FX turmoiled considerably lower and while the USD was stable (there was plenty of puking in AUD and JPY). Treasury yields tumbled to fresh 10 week lows (10Y -8bps at 2.66% at the lows). Gold and silver rallied post-FOMC and recovered yesterday's monkey-hammering losses.

 

Spot the Diffference - JPY crosses vs S&P 500

 

Most major indices have now lost post-December taper gains...

 

As yesterday morning's short squeeze meant we needed to auction back down...

 

Only Healthcare and Utilities remain in the green among the S&P 500 sectors from the Dec Taper... (with Consumer sectors crushed)

 

Gold and silver recovered yesterday's slam down...

 

EM FX was crushed off Turkey highs...

 

Treasury yields jumped 6bps higher on the Turkey news at their open and then just collapsed all night and accelerated lower post FOMC...

 

Since the December taper, it appears (once again) that stocks were the last ones to get the joke...

 

Charts: Bloomberg

Bonus Chart: Wondering how Fed asset "flows" and investor sentiment (and thus buying/leverage pressure) is related? @Not_Jim_Cramer shows this wonderful chart of investor exuberance getting ahead of itself as Fed asset growth rates slow...

 


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Wed, 01/29/2014 - 17:18 | Link to Comment FuzzyDunlop21
FuzzyDunlop21's picture

Last time there was a taper stocks popped a boner. Not so much this time bitchez! Where is your god now?

Wed, 01/29/2014 - 17:22 | Link to Comment THX 1178
THX 1178's picture

hoo hoo hoo! Its crunch time bitchez!

Wed, 01/29/2014 - 17:25 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

God I hope.  There are some that I know that are bringing cash out of the bank finally, expecting the the fan to spray some feces around very shrotly.  Ones who thought I was nuts a few years ago. 

Wed, 01/29/2014 - 17:27 | Link to Comment kaiserhoff
kaiserhoff's picture

Ben Shalom kapute ist.

   Now how do we get rid of Barry the Fairy?

Wed, 01/29/2014 - 18:10 | Link to Comment aVileRat
aVileRat's picture

Goodbye ben.

 

Time to see if the computer funds of today are smarter than the funds in 1987 * 1998.

 

Wed, 01/29/2014 - 17:24 | Link to Comment TruthInSunshine
TruthInSunshine's picture

OH MY GOD!

The stock markets could decline!!! This would be the end of free market capitalism & hurl the world into a new dark age!!!!!

What will be do without financial engineering, derivatives, speculators & the churn & burn mechanism that actually produces nothing of tangible value and merely serves to shift fiat money from one pocket to another that is called Wall Street?!!!!

Wed, 01/29/2014 - 17:44 | Link to Comment CheapBastard
CheapBastard's picture

"Stock prices never drop," my realtor told me.

...oh, wait a sec.....

Wed, 01/29/2014 - 19:51 | Link to Comment Osmium
Osmium's picture

There hase NEVER, EVER been a better time to buy.  EVER.

Wed, 01/29/2014 - 20:28 | Link to Comment Freddie
Freddie's picture

What free market?

Wed, 01/29/2014 - 18:44 | Link to Comment slaughterer
slaughterer's picture

ES has a date with its 100DMA before any bounce can take place.

Wed, 01/29/2014 - 17:17 | Link to Comment TeamDepends
TeamDepends's picture

It was the best of times, it was the worst of times.

Wed, 01/29/2014 - 17:21 | Link to Comment Charles Nelson ...
Charles Nelson Reilly's picture

Only the good die young? Or in this case a horrible fed induced correction.

Wed, 01/29/2014 - 17:47 | Link to Comment walküre
walküre's picture

About time this baby learns how to walk on its own two feet.

This recovery is so real, stocks will reach new highs by EOY.

Either that or we start carrying toilet paper to the butcher in exchange for some meat.

one way or another no middle ground

Wed, 01/29/2014 - 20:54 | Link to Comment HardlyZero
HardlyZero's picture

Reality bites the FED in the tuchus.

BTW does anyone have any sexy/hot non-photoshopped pix of the FED head ? 

This may come in handy when SHTF...seeing a Yellin' Prune every day might nausiate the markets and cause a disturbance in the farce.   Hot Yellin' pix...  that might be worth their weight in Gold.  heh.

Wed, 01/29/2014 - 17:22 | Link to Comment madcows
madcows's picture

It was a dark and stormy night...

Wed, 01/29/2014 - 17:31 | Link to Comment Carpenter1
Carpenter1's picture

As fun as this is to watch, it's FED created, therefore i dont believe its the real deal. Does anyone believe the FED will intentionally crash the market? 

Market= Economy(for the voting sheep) 

Anyone able toexplain why the FED would tell the market its not buying anymore?l

Wed, 01/29/2014 - 18:02 | Link to Comment negative rates
negative rates's picture

I think the Fed tries all the time, but since it is alway wrong, but never in doubt, they fail every time at doing so.

Wed, 01/29/2014 - 21:03 | Link to Comment HardlyZero
HardlyZero's picture

If they want to...if they want to.

Reminds me of these lyrics, Cities, David Byrne.

Think of London, a small city

It's dark, dark in the daytime
The people sleep, sleep in the daytime
If they want to, if they want to

CHORUS

I'm checking them out
I'm checking them out
I got it figured out
I got it figured out
There's good points and bad points
Find a city
Find myself a city to live in.

With the 10-year stuck going higher...its probably the right time...if they want to.

Wed, 01/29/2014 - 17:32 | Link to Comment replaceme
replaceme's picture

<- it was the best of times

<-it was the worst of times

Wed, 01/29/2014 - 17:18 | Link to Comment Winston Churchill
Winston Churchill's picture

Margin calls, bitchez.

Wed, 01/29/2014 - 17:20 | Link to Comment SheepDog-One
SheepDog-One's picture

Only takes a -5% drop for there to be real pain when everything is leveraged 30:1.... but alas we're about to have the min wage/unemployed sop in to bail out our debt...yea that sould work real well.

Wed, 01/29/2014 - 17:21 | Link to Comment Spastica Rex
Spastica Rex's picture

Is the 30:1 descriptive, or hyperbolic?

I'm asking because I don't know.

Wed, 01/29/2014 - 17:24 | Link to Comment SheepDog-One
SheepDog-One's picture

From what I've gathered from the banks and funds leverage is probably more like 40 in order to skim a dime off the top.

Wed, 01/29/2014 - 17:32 | Link to Comment kaiserhoff
kaiserhoff's picture

Yes, often on the high end in bonds, because they are so safe;)

Wed, 01/29/2014 - 17:47 | Link to Comment CheapBastard
CheapBastard's picture

The recent postal rate increase was the final straw for the poor small business sap down the street. His retail biz just went Deep Six'd.

 

Wed, 01/29/2014 - 17:34 | Link to Comment kaiserhoff
kaiserhoff's picture

Supposedly not unusual in Hedge Funds or the craziest banks like Deutsche, but they don't publish data in enough detail to really know.  Anyway, it changes constantly.  The really bizarre thing is that hedge funds are rarely hedged in any useful way.

Wed, 01/29/2014 - 18:06 | Link to Comment Carl Popper
Carl Popper's picture

They really should be called unhedged funds

Wed, 01/29/2014 - 17:21 | Link to Comment fuu
fuu's picture

Bullish for typos.

Wed, 01/29/2014 - 17:27 | Link to Comment EmmittFitzhume
EmmittFitzhume's picture

It's hard to get good Copy out fast enough...Unless you're Hilsenrath

Wed, 01/29/2014 - 17:21 | Link to Comment buzzsaw99
buzzsaw99's picture

nice fake market

Wed, 01/29/2014 - 17:28 | Link to Comment Rainman
Rainman's picture

... it's a good thing I stopped Mrs. Rainman from shitcanning my Dow 10k hat !

Wed, 01/29/2014 - 17:28 | Link to Comment buzzsaw99
buzzsaw99's picture

headline: ALL OUT PANIC CAUSES STOCKS TO DROP EXACTLY 1.00000%.

Wed, 01/29/2014 - 17:23 | Link to Comment SheepDog-One
SheepDog-One's picture

QUICK! Uncouple from JPY!

Wed, 01/29/2014 - 17:22 | Link to Comment Pareto
Pareto's picture

"good afternoon everybody, its 4 o'clock on Wall Street - do you know where your money is?"  Why yes Maria, IF by money you mean gold - yes Maria ......I know exactly where it is.

Wed, 01/29/2014 - 17:24 | Link to Comment nasa
nasa's picture

Let's see some serious blood in the streets.

Wed, 01/29/2014 - 17:25 | Link to Comment SheepDog-One
SheepDog-One's picture

Hopefull in the form of Wall St bankters raining down from the sky.

Wed, 01/29/2014 - 21:08 | Link to Comment HardlyZero
HardlyZero's picture

Two top American Bankers commit suicide in London as one jumps 500ft from JP Morgan skyscraper and another hangs in home.

In last few days in the Daily Mail.

 

Wed, 01/29/2014 - 23:47 | Link to Comment PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

..well, it's a start.

Wed, 01/29/2014 - 17:27 | Link to Comment highly debtful
highly debtful's picture

I've got a question for the more economically advanced than me (that's about 99 % of you lot on this site, I suppose).

What's the deal with the Fed now doubling its stakes on tapering just when the EM's are starting to burn? Isn't this going to be a popcorn moment, because it'll be like throwing high grade fuel on the bonfire?  

What am I missing? Throw me a bone here, people.

 

Wed, 01/29/2014 - 17:28 | Link to Comment buzzsaw99
buzzsaw99's picture

you can't look at it from the outside and make sense of it. if you could look at jpm's and gs's derivative positions then it would become clear to you.

Wed, 01/29/2014 - 17:27 | Link to Comment Winston Churchill
Winston Churchill's picture

They are saving themselves ,and the USD , by throwing the rest of

the world under the bus.

Or trying to.

Wed, 01/29/2014 - 17:45 | Link to Comment kaiserhoff
kaiserhoff's picture

Yes, it buys them time, until the next disaster.

Wed, 01/29/2014 - 21:20 | Link to Comment HardlyZero
HardlyZero's picture

and...it gives Christine and the IMF something to do.  or possibly the UN if things start getting out of hand.

Its a jobs magnet !

they are breakin' lots of windows now.

Wed, 01/29/2014 - 17:30 | Link to Comment Rainman
Rainman's picture

You are missing the $4.1 T Fed balance sheet full of crap....and growing.

Wed, 01/29/2014 - 17:36 | Link to Comment SheepDog-One
SheepDog-One's picture

But soon the min wage/unemployed americans will be scrambling in to take the reins of the FED $4.1 trillion balance sheet, as directed by Dear Leader.

Wed, 01/29/2014 - 18:25 | Link to Comment Overfed
Overfed's picture

Muffuggers ain't gettin' a single worthless zinc penny of my munney. Fuck O'bomb-a, he can take his MyRA and shove it right up his ass.

Wed, 01/29/2014 - 21:21 | Link to Comment HardlyZero
HardlyZero's picture

and Prune Yellin'

Wed, 01/29/2014 - 17:32 | Link to Comment SheepDog-One
SheepDog-One's picture

Then they can finaly get their world economic chaos and panic and bring in their endgame 1 world Goldman Sachs bank and 1 world currency. People used to think such talk was crazy.

Wed, 01/29/2014 - 17:36 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

I don't get it either. With HFT and all their other manipulations I can't understand how this faux market can ever plummet. Unless it's an intentional reaping.

Miffed;-)

Wed, 01/29/2014 - 17:46 | Link to Comment gwar5
gwar5's picture

.

Wed, 01/29/2014 - 17:46 | Link to Comment gwar5
gwar5's picture

I'm not an economist with a PhD but I spent the night in at Holiday in Express. 

 

I thnk the FED knows their QE is not working. By untapering, they shift the consequences of QE to the equity markets and EM's, short term. Insiders know what's coming and how to protect themselves. An equity crash will help the FED unload their UST on dupes with MyIRAs believing they are more safe. The EM turmoil is schadenfreude for the FED because they have been conspiring against the FED's fiat USD by moving towards an alternative currency. 

 

That's how I see it, if there is a rational explanation for what is going on. I wish other commentators more keen than me would chime in on this. 

 

Wed, 01/29/2014 - 23:54 | Link to Comment PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

Sounds logical , if they create a false bottom to give a green light to the desperate side money to climb on to the back of the next upswing, they can wring what they can and buy more time- except it's really more smoke and mirrors.

..eventually the real numbers win.

Wed, 01/29/2014 - 19:31 | Link to Comment stocktivity
stocktivity's picture

They spent all 2011 buying $45 Billion a month. Raised that to $85 Billion a month. Now they lowered it to $65 billion a month. Taper my ass!

Wed, 01/29/2014 - 17:26 | Link to Comment gwar5
gwar5's picture

Killing the "wealth effect" will scare the sheep into treasuries and MyIRAs.

Making people buy UST was discussed during the 2008 crises, whereby they'd use the crises to coerce people into buying Treasuries. FED happy to create a new crises to herd the bagholders.

Wed, 01/29/2014 - 17:31 | Link to Comment spankthebernank
spankthebernank's picture

Still don't know why you'd buy anything with a negative real rate of return.

Wed, 01/29/2014 - 17:40 | Link to Comment kaiserhoff
kaiserhoff's picture

Maybe because you fear a worse alternative, like forced bail ins.

It's hard for retail traders to understand that the big boys have few options and lousy liquidity.  If you manage a few billion in an insurance pool, you can't hang out in silver, gold, and ammo like we can. 

Wed, 01/29/2014 - 17:42 | Link to Comment B.J. Worthy
B.J. Worthy's picture

Because Obama.

Wed, 01/29/2014 - 17:45 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

If you hold cash it's a negative return.

Wed, 01/29/2014 - 19:02 | Link to Comment lakecity55
lakecity55's picture

If you stash your cash in a can under grandma's garden, at least the bankster can't steal it.

Wed, 01/29/2014 - 17:57 | Link to Comment gwar5
gwar5's picture

Exactly, you wouldn't! 

 

That's why the the term 'bagholder' implies they are stupid and dupes if they get herded into this voluntarily. Not only are UST a negative rate of return, but when the interest rates do get hiked back up to reality they will be devastated. But the rats will be trapped. 

When enough dupes figure out that it is a trap, they will no longer do it voluntarily, then it will become mandatory. 

 

 

 

Wed, 01/29/2014 - 17:32 | Link to Comment monopoly
monopoly's picture

I know we have a long way to go as the last 18 months have been tough on us real investors. But so far this year gold and miners have been right at the top of performance. Now if we can just get Mr. Silver moving along with us.

Patience all. This will work out just fine.  I have all my positions set for at least the next year. Enjoy.

Wed, 01/29/2014 - 17:34 | Link to Comment gatorengineer
gatorengineer's picture

It sure looks like the JPY cross is a lagging indicator....

Point 2 with the way bonds and gold behaved today. I am starting to believe its real this time.

Wed, 01/29/2014 - 19:17 | Link to Comment Ness.
Ness.'s picture

Starting to notice that the rips are being clipped.  The low volume ramps are running out of steam and the big volume moves are to the downside (rightly so). 

Wed, 01/29/2014 - 17:42 | Link to Comment ebworthen
ebworthen's picture

I see a plan forming where the FED, under orders from their bankster masters, continue to taper to crush the equities markets.

It will lower Treasury rates (cost of debt servicing) while pushing people to buy Treasuries.

The banks will be one step or two steps ahead of the sheeple, ringing up profits all the way down.

And guess what?  When people sell their equities they will have profits from the ramp that will be taxed.

Cha-ching!

Wed, 01/29/2014 - 18:05 | Link to Comment falak pema
falak pema's picture

If you crush the equities market you crush the oligarchy wealth.

The fight has always been about maintaining WS assets. A S&P at 1000 and its game over for the FED, what ever the bond market does. 

You kill the goose of the oligarchs.

Wed, 01/29/2014 - 17:43 | Link to Comment ncdirtdigger
ncdirtdigger's picture

I missed my chance to BTFATH! What now?

Wed, 01/29/2014 - 17:47 | Link to Comment Winston Churchill
Winston Churchill's picture

Sell The Dip. STP.

Your welcome.

Wed, 01/29/2014 - 17:54 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

oh no you didn't, just go BTFH in nat gas, at $5.50 they are practically GIVING it away plus it has been going up 10% per day; you can't lose! 

Wed, 01/29/2014 - 18:26 | Link to Comment ncdirtdigger
ncdirtdigger's picture

nat gas going up? What the hell? I thought that was fracking fixed.

Wed, 01/29/2014 - 21:27 | Link to Comment HardlyZero
HardlyZero's picture

With Prune Yellin' the gas levels will be rising.

Wed, 01/29/2014 - 17:50 | Link to Comment assistedliving
assistedliving's picture

Yellen shall be tested says Mr. Wall St.  Never worked a day in her life.  problem is first time they no likee taking one up the backside...until they do.

newbie BOHICA.  

Wed, 01/29/2014 - 17:52 | Link to Comment Cursive
Cursive's picture

Dear Ben BernanQE,

Careful, if you slip on Greedspawn's banana peel and a watermelon goes up your ass.

Wed, 01/29/2014 - 17:55 | Link to Comment falak pema
falak pema's picture

hey, hey hey, they aren't as buised and battered as all that! 

We'll see how low will the WS spike go now that the taper is minus 20 B.

Another 65 to go...

Some time around second semester the FED slate should be clean of QE...and then we'll see where the rates stand.

Wed, 01/29/2014 - 17:59 | Link to Comment Carl Popper
Carl Popper's picture

Gold hamster may be right lol.

We may just see gold hit 3 digits and silver hit 15

I am a buyer at this level and would be delighted if I get an even better price in the future.

Wed, 01/29/2014 - 18:07 | Link to Comment shanearthur
shanearthur's picture

Can someone tell me this? Why did the Hang Seng go up 180 and the Nanex go up 225 today? How (does) this relate to the Fed news? Newby question for sure.

Wed, 01/29/2014 - 18:09 | Link to Comment dragoneyes74
dragoneyes74's picture

Very happy with the gold action.  It's by far the best setup.  Now that the Fed is out of the way and it has a nice bid underneath it, and sitting beneath the neckline of a perfect inverse head and shoulder pattern on the daily with the 20-day about to cross up thru the 50-day, I think there is zero chance it doesn't break out and run at least to $1335-$1350 area.  Zero is pretty small.  This has been agonizing in setting up.  Worst foreplay ever.  

Technically, there is room for a small version of the monday tuesday weakness, but I started a small long position after the Fed just in case the breakout happens overnight and I will feel very good about it unless it loses the 20-day on a closing basis (which is at today's low print of $1247).  It would make me very happy if silver would get its act together, and even better if the dollar would roll over (which makes no sense to me at all), but this is one of those setups where if it freakishly reverses and doesn't work, I will take the loss knowing it's worth the risk and I would take this trade every time. I feel like I'm being very disciplined about staying small until the breakout happens, so if there is any chance the trading gods can intervene and make the breakout happen during the morning session I will totally help old ladies cross the street for at least two months.   Jus sayin'.   

Wed, 01/29/2014 - 18:09 | Link to Comment falak pema
falak pema's picture

how come the delta between 10 year US vs Italy is only 1% and between France and US its -0.3 %?

Respectively 2.7% ; 3.7% and 2.4 %.

Wed, 01/29/2014 - 18:16 | Link to Comment Dan Duncan
Dan Duncan's picture

Yo Tyler, you should bring this chart back up from a couple of months ago which might just be one helluva call on this correction. Damn near called it to the day.

http://www.zerohedge.com/news/2013-11-08/anatomy-pre-crash-bubble

Wed, 01/29/2014 - 18:57 | Link to Comment lakecity55
lakecity55's picture

This sad news does not affect those who do not wish to play the market lottery. PMs, barter, productive land, other hard assets are more important and valuable these days than paper instruments. I do hold on to my miners however. If the markets really tank, I want to BTFD on natgas or oil....

But, to those of you in pure paper, carry on. I worked very hard for the little I do have, and paper can and does come and go.

Ah, to have the best of both worlds, but that would be greedy.

ZH shouldl have a deer picture day of the market, 1-5 photos of deers or dead kermit the frogs. "This was a 3-deer day, ZHers, as trannies and durables tanked badly."

Keep Stackin!

Wed, 01/29/2014 - 19:34 | Link to Comment CultiVader
CultiVader's picture

I just stacked and I'm ready to stack again...silver sub 20 bitchezzz

Wed, 01/29/2014 - 19:50 | Link to Comment lakecity55
lakecity55's picture

Sub-20 Ag is delicious!

Wed, 01/29/2014 - 21:26 | Link to Comment HardlyZero
HardlyZero's picture

Keep doin' it.  (stacking)

Wed, 01/29/2014 - 19:12 | Link to Comment Hindenburg...Oh Man
Hindenburg...Oh Man's picture

Nice day for the miners. 

Wed, 01/29/2014 - 19:25 | Link to Comment fuu
fuu's picture

Hey look, the NY Fed is permitted to continue reverse repo operations through January 2015. Additionally daily size was increased to $5,000,000,000 per counterparty per day

http://www.newyorkfed.org/markets/opolicy/operating_policy_140129.html

All your taper are belong to us.

http://www.newyorkfed.org/markets/expanded_counterparties.html

Wed, 01/29/2014 - 19:27 | Link to Comment chump666
chump666's picture

Three days of POMO at 4+billion 31st Jan to the 3rd Feb. 

Wed, 01/29/2014 - 19:54 | Link to Comment fuu
fuu's picture

Some back of the napkin math:

 

Since 12/2/2013 $2,061,547,000,000 has been accepted in RRP transactions. 

December 2013 Total: $729,048,000,000.

January 2014 Total: $1,332,499,000,000.

$215,749,000,000 at 0.05 prior to 12/21/13.

$1,845,798,000,000 at 0.03 after 12/21/13.

Wed, 01/29/2014 - 19:20 | Link to Comment chump666
chump666's picture

As a reminder, this is not a substantial correction as yet.  Any contentious 2% drops to a 15 to 20% will be alarming to the FED as liquidity and margin calls start to shake Wall Streets foundations.  This sell off is no big deal at all.

Wed, 01/29/2014 - 21:25 | Link to Comment HardlyZero
HardlyZero's picture

Maybe its a new ACA Healthcare campaign ?  Lots of people dying from a worldwide collapse might incentivize people to get health insurance ?  Copper, Silver, Gold ?   (it might just work !)   heh.

It could be that sinister ?.

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