Stocks Dead-Cat Bounce But Credit Ain't Buying It

Tyler Durden's picture

UPDATE: As soon as cash markets closed, S&P futures dumped 6 points...

US (and Japanese) stocks began their dead-cat bounce around the European open tracking USDJPY (once again) and rising in reverse order of yesterday's selloff as Nikkei, Trannies, Nasdaq and so on (in order) recovered around 25-35% of yesterday's losses. For Fibonacci-watchers, S&P futures ticked 38.2% retracement and stalled and VWAP was support all day. Credit markets did not buy it and stocks caught down to them. Silver, having underperformed since the taper, outperformed today back over $19.50 and +1.7% on the week as gold slipped modestly today (but +0.8% on the week). Treasuries sold off modestly leaving yields -2-3bps on the week. AUD stength and JPY weakness supported stocks but the USD flatlined ahead of tomorrow's ECB meeting. MUB, the Muni ETF, was smashed lower on the Puero Rico junking (and that triggered a quick waterfall in stocks) but that was quickli BTFD'd. VIX fell an impressive 2.9 vols to 18.5%, which is notable since stocks 'underperformed' the hedge cover by a long way.

The S&P 500 remains below its 100DMA, The Dow closed below its 200DMA once again; and Trannies bounced off the 100DMA


The bounce in context... 38.2% in the S&P 500...


Credit markets acted as support as stocks kept bouncing back down to reality....


Trannies and Nasdaq inch back into the green post-Taper...


The bounce in stocks was all about USDJPY yet again...


Over the 2 days - stocks are still down markedly


Copper and Oil recovered to unch on the week as Silver outperformed on the day...


Treasuries sold off modestly but remain lower in yield on the week...


The USD looks flat (as EUR trod water ahead of tomorrow's ECB meeting) but the AUD and JPY move was impressive...


Charts: Bloomberg

Bonus Chart: When PR was downgraded, MUB (the Muni ETF) was hammered lower...


Bonus Bonus Chart: The Nikkei is roaring back relative to the Dow... for now...


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RockyRacoon's picture

AAAARGH!  Too many disconnects to make a prediction. 

But that's never stopped me before:  It's going all to shit.

Sudden Debt's picture

want some grass bro?Got some real californian green for ya!

So Close's picture

Since when has credit "bought" it?

So Close's picture

Since when has credit "bought" it?

asteroids's picture

The credit men are always smarter. The "boyz" with their supercomputers and super fat accounts refused to let the market fall today. Only towards the end of the day did they move the market where they wanted it. Thanks to the chairsatan and 5 years of free money, the markets are now under the firm control of you know who.

Remington IV's picture

Yep , those bond geeks were so right in 2008 !?!?!?

Remington IV's picture

Yep , those bond geeks were so right in 2008 !?!?!?

Sudden Debt's picture

YEAH!!! the ecb will tell it how it is!!!


Finnman's picture

Yes, Draghi will tell to you.

Finnman's picture

Investors are buying bargains. So next 2-3 weeks it's huge rally?

Winston Churchill's picture

What part of dead cat bounce did you miss ?

The smart money left the building today.

Sudden Debt's picture


Debeachesand Jerseyshores's picture

They were just seen leaving the building behind the previous Chairman of the Federal Reserve.

new game's picture

so if it left the building; a)did it go to a vault as shiney? b)money market/cash funds? c) lear jet purchase?

d) hookers and blow? e)emerging markets? f)real estate? g)art and fine cars? h)check out and prepping?i)bonds?j)stocks-btfd k)all of the above?

Winston Churchill's picture

If I knew for certain, I would front run it.

All I can guess is the market will be performing like a one legged

limbo dancer tomorrow.

ie: it will fall on its arse.

Ass. Manager's picture

"Just buy the fucking dip, you fucking idiot."

mumbo_jumbo's picture

LOL, that was a knee sounds SOOOOOO 1999

G.O.O.D's picture

Quit being a pussy, I'm all in on red.

Sudden Debt's picture

In 2008 we called it all "soft patches"... anybody remember those days?

G.O.O.D's picture

Greenspasm? Those days of “Irrational exuberance

HpDeskjet's picture

ECB = thursday not wednesday right?

HyBrasilian's picture

Credit... CREDIT?... CREDIT?


Whoever THEY are... I guess they're not buying it...

Dr. Venkman's picture

Something broke.

HyBrasilian's picture

It's TRUE... This man has NO CREDIT


[Well that's what I heard!]

NOTaREALmerican's picture

Good Credit, Problem Credit,
No Credit...
No Problem!

Arrange your next loan with us. Our online questionnaire takes only minutes to complete and loan decisions normally occur within hours.

alexander-delarge's picture

What index / instrument does TD/ZH use to follow / chart 'credit' ?  Thanks,  AD

OwnSilverPlayMusic's picture

Eh, I got nothing to add.  So here's a killer track to listen to.  Fela Kuti- "Zombie"

ghostzapper's picture

Not a good day for the intoxicated by Hopium cheerleaders.  lower volume bounce that had minimal ooomph behind it.  1760 not a key level but relevant and couldn't even touch much less try to penetrate it.  Not much between here and 1646ish.

So, who blinks first the Fed or the ECB?

Bonus Question:  what's the new acronym for the latest and greatest scam they announce?   

adr's picture

SO there are no real reasons based on actual commerce for stocks to trade the way they do. A bounce happens because a bounce should happen, and it happens to be a near perfect Fibonacci retracement because a retracement should be a perfect Fibonacci retracement.

Why can't we just map the market for the next year and build a perfect chart with 20% corrections followed by rallies that take the market up 50%. The stock market can be like the WWF, totally scripted with fake drama. Companies like Netflix can have a planned surprise miss that takes the stock down by 20% in a day only to see it shoot right back up, what a story that makes. CNBC can still exist, they wouldn't even have to change formats since 99% of what they say is scripted.

Then everyone can make money and everyone can be rich. Just think of the GDP growth. Like the new Bitcoin millionaires, everyone will get the itch to spend that unearned cash.

NOTaREALmerican's picture

Re:  A bounce happens because a bounce should happen, and it happens to be a near perfect Fibonacci retracement because a retracement should be a perfect Fibonacci retracement.

I'm still plotting the head-n-shoulders pattern starting with the last Napolianic war.    Fibonacci sounds Italian, there can't be any predictive powers in that.   

JaKst3r's picture

Fibonacci sounds Italian.. Buy Italian stocks immediately.....

DrunkenMonkey's picture

Uh-oh, if people are finding their sense of humour on ZeroHedge, that is the ultimate market indicator ..

williamson's picture

Australian listen.

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