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Today's Market Correlation Pair Is...

Tyler Durden's picture





 

Not Bonds (which are rallying to their low yields of the day - and have almost removed the entire post-Yellen move)... Not USDJPY (which entirely disconnected from stocks when Europe closed)... but Gold... ding ding ding... is your new correlation pair du jour...

 

 

Charts: Bloomberg

 


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Thu, 02/13/2014 - 15:15 | Link to Comment HedgeAccordingly
HedgeAccordingly's picture

I blame stay at home dads. 85 Broads’s Sallie Krawcheck: SOCIETY STILL LESS ACCEPTING OF STAY-AT-HOME MEN http://hedge.ly/1eVNiud

Thu, 02/13/2014 - 15:19 | Link to Comment Divided States ...
Divided States of America's picture

The fuckin S&P is like a viral parasite sucking the blood and subsisting from a variety of hosts.

Thu, 02/13/2014 - 15:28 | Link to Comment Stoploss
Stoploss's picture

WOO HOO!!!!

 

Now what, JAN??????????????

Thu, 02/13/2014 - 15:52 | Link to Comment SovietCong
SovietCong's picture

Makes no fucking sense. Welcome to the new, neo-Keynsian market reality.

Thu, 02/13/2014 - 16:08 | Link to Comment CPL
CPL's picture

A happy colony of ticks must mean the the animal is very healthy.  Nothing could possibly go wrong in that situation non?

Thu, 02/13/2014 - 17:15 | Link to Comment FuzzyDunlop21
FuzzyDunlop21's picture

whateer gets it highest

Thu, 02/13/2014 - 15:21 | Link to Comment ACP
ACP's picture

Society seems very accepting of stay at home men, as long as they're on welfare.

Thu, 02/13/2014 - 15:21 | Link to Comment derek_vineyard
derek_vineyard's picture

wake me when its over

Thu, 02/13/2014 - 16:09 | Link to Comment Caveman93
Caveman93's picture

WTF? That was just so non-sensical. 

 

Edit: I am planning on being a Dad stay at home or not. Why do I need two incomes when one will do? So I can buy a Dodge Challenger I don't need?

Thu, 02/13/2014 - 16:20 | Link to Comment Transformer
Transformer's picture

A Dodge Challenger would be very cool to have after the collapse.

Thu, 02/13/2014 - 16:36 | Link to Comment SilverDOG
SilverDOG's picture

Bullshit.

A Moutain Bike with 29" tires will be far more cool.

It will move without petroleum.

Take a trip 3rd world and see equivalents sitting in dooryards rotting without tires.

Nice cars to brand new looking semi's, no tires.

USA soon enough.

Thu, 02/13/2014 - 15:15 | Link to Comment skwid vacuous
skwid vacuous's picture

at this rate ol' yellen is gonna make ben shalom look like an amateur

Thu, 02/13/2014 - 15:15 | Link to Comment alphamentalist
alphamentalist's picture

if you are the arsehole who is buying spx can you call me and tell me why? kthanksbye.

Thu, 02/13/2014 - 15:29 | Link to Comment Ham-bone
Ham-bone's picture

in '13 ETF's / Comex provided 1000 of the 4700 tons of supply (or 21%) to meet the record demand...so far in '14 Chinese demand @ new record highs in Jan, India looking to officially get back in the gold biz, and now the ETF's are net buyers...GLD as the largest sold 560 tons last year (drawdown from1350 --->790 tons) but so far this year adding 10 tons...that means somewhere there is maybe a 25% shortage of supply vs. demand...

funny the price of gold wouldn't go parabolic in this circumstance...very strange this massive, obvious shortage isn't causing a huge short squeeze, seriously curious...Almost like the price we are watching has no correlation to the fundamentals of underlying asset.  Wait a second, I've seen this somewhere before...

Thu, 02/13/2014 - 15:49 | Link to Comment delivered
delivered's picture

Agreed. Supply pressure building. One month GOFO rate since 1/1 has been negative for 18 days and positive for 13 days (business days). Last 8 days all negative (and really moved into this range once the Chinese New Year activities subsided). So while the laws of supply and demand should indicate a much stronger move upwards, TBTB simply aren't going to let this happen. For days, gold battled to move above $1,270 (a key short level noted previously). I suspect the key players were given some time to re-position knowing that gold would eventually break this barrier. Now the new "line in the sand" is just around $1,300 or so. Again, I'm expecting a significant battle to be fought to keep the price in check.

It's going to take something really dramatic for gold to make a singificant move higher as TPTB have access to resources that most people can't really comprehend. Eventually, it will come (e.g., Germany final confesses that their gold is gone, COMEX default, China provides accurate info on gold holdings, massive fraud in PM trading exposed, or a dozen otehr events) but probably not for a while and until the key insiders have executed their exit plans. But just like Andy Dufrainne played by Tim Robbins in the movie The Shawshank Redemption stated when asked about the science of geology (to Red played by Morgan Freeman), just the study of time and pressure, that's all. So is the PM market. Just the study of time and pressure.

Thu, 02/13/2014 - 16:20 | Link to Comment disabledvet
disabledvet's picture

JPM has been long since last fall.

Nuff said...move along.

Thu, 02/13/2014 - 16:21 | Link to Comment ReactionToClose...
ReactionToClosedMinds's picture

good observations...thks

Thu, 02/13/2014 - 16:24 | Link to Comment dirtscratcher
dirtscratcher's picture

 

I up-arrowed you for the reference to an all time great movie (Not that I disagree with your premise re gold;that was good, too)

Thu, 02/13/2014 - 16:33 | Link to Comment vulcanraven
vulcanraven's picture

Get busy livin'...

or get busy dyin'

Thu, 02/13/2014 - 17:20 | Link to Comment therover
therover's picture

Andy: " Chess, now there's a game. Dignified, civilized"

Red: " And a total fucking mystery"

Sorry...had to put that in there. I just love that movie.

 

Thu, 02/13/2014 - 17:25 | Link to Comment delivered
delivered's picture

Shawshank no doubt a great movie. Didn't have to drop the "F" bomb 503 times (like the WofWS) and used a great story line as its basis (unlike today's movies which are based on EAE&S - egos, action, effects, & sex). Ah, the good old days.

Great quotes from the movie provided and I may offer a slight revision to the last quote as to how Andy and Red might speak about PMs:

Andy: "Ownership of physical PM's, now there's a game. Dignified. Civilized" and from the words of the late Jack Palance who played Curly in City Slickers noting what that one thing was "Honesty. Integrity".

Red: "And trading paper PM's or for that matter the stock market, a total fucking mystery". 

 

Thu, 02/13/2014 - 18:13 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Just following the CME flows, there was a pretty big run up in eligible stock (up to about 638K oz), but there was an even bigger run up in delivery notices recently (328K oz).  I'm looking at about 310K oz left in registered stock once you account for these notices, which is about 3,100 /gc contracts vs. 127K traded today.  2.4% covered physical vs. paper by this metric, if you use open interest (376K), you're looking at 0.8% covered physical vs. paper.

I generally agree that the game could continue for a while, but Comex default looks like it will likely be an intended event.

 

Thu, 02/13/2014 - 15:21 | Link to Comment skwid vacuous
skwid vacuous's picture

never seen such a squeeze in momo stocks since 1999 - PCLN, CMG, NFLX etc... I hope robotarder is cashing out and buying his private island and jet...

Thu, 02/13/2014 - 15:24 | Link to Comment praps
praps's picture

Bail-ins coming.  They are all trying to covert their cash to assets, which are going to go through the roof.

Thu, 02/13/2014 - 15:22 | Link to Comment hobopants
hobopants's picture

This is fucking looney tunes, at least the carry trade made sense. Now we have risk correlating with a safe haven asset?

Thu, 02/13/2014 - 15:30 | Link to Comment Ham-bone
Ham-bone's picture

the first rule to this game is that there are no rules

Thu, 02/13/2014 - 15:39 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

If you wanted to shut down the anti propaganda and turn them into cheerleaders. M.A.D.

Though I suspect are headfaking since they've been sniffed out and will be rotating around different carry pairs as each one gets sniffed out to make it seem like they aren't still pumping up the stock market while saying otherwise aka tapering until OMT comes online.

Thu, 02/13/2014 - 16:25 | Link to Comment saints51
saints51's picture

I think you pretty much nailed it.

Thu, 02/13/2014 - 15:50 | Link to Comment debtor of last ...
debtor of last resort's picture

Hedging paper risk with a physical asset. We're approaching zero hedge.

Thu, 02/13/2014 - 16:04 | Link to Comment hobopants
hobopants's picture

Except the gold in this case is paper too right?

Thu, 02/13/2014 - 16:21 | Link to Comment debtor of last ...
debtor of last resort's picture

You are correct. Hedging with real physical won't appear. Before that it's collapse time.

Thu, 02/13/2014 - 17:12 | Link to Comment BandGap
BandGap's picture

Not all of it.

My silver mining stocks are hopping today, too.

Thu, 02/13/2014 - 17:26 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

The dollar is collapsing, every day more people are coming to the realization that the US is and has been for quite some time entirely insolvent.   The debt ceiling is meaningless because all they ever do is raise it, the USD is going to zero and the SPX is going to infinity as measured in dollars.  

 

if you chart SPY-GLD you will see that we are still like 40% under the highs of 07. so that means one of two things, gold is going lower (unlikely) or the S&P is going drastically higher from here (100% guarnteed, no brainer, stone cold lead pipe lock)

 

I have said it before and I will say it again, SPX 2000 this year is a given, the question is will we hit 2500 this year or next. 

Thu, 02/13/2014 - 19:29 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

Groups aligning to the major religions of WS:

SPX to the moon and

QE to infinity payback time

 

Thu, 02/13/2014 - 15:29 | Link to Comment skwid vacuous
skwid vacuous's picture

Junior traders at desks going with the flow as the older Lizards mailed it in today?

Thu, 02/13/2014 - 15:28 | Link to Comment Conman
Conman's picture

Makes total sense . Bad news is good news. Good news is good news. Risk asset(stawkks) is the safety trade. One word X 3 - BUY!

Thu, 02/13/2014 - 15:40 | Link to Comment Ham-bone
Ham-bone's picture

made total sense everytime when monetary base was rocketing up...but this buying frenzy into an almost surely shinking monetay base as of Jan will be the most epic crash...hello '29

Thu, 02/13/2014 - 15:47 | Link to Comment hobopants
hobopants's picture

What is squeezing the monetary base? taper? Doesnt seem like that would be enough... This looks like a contraction not a slow down.

Thu, 02/13/2014 - 18:20 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Remember that shadow banking collapse?  Yeah, that never stopped.  

Thu, 02/13/2014 - 21:57 | Link to Comment hobopants
hobopants's picture

You think the fed would have stemmed that deflationary tide a bit after 5 years of sopping up shitty mbs, but you're probably right, I can't see what else it could be.

Thu, 02/13/2014 - 15:34 | Link to Comment GolfHatesMe
GolfHatesMe's picture

Overlay it with the Debt Ceiling....we're going Plaid!

Thu, 02/13/2014 - 15:37 | Link to Comment Dr. Venkman
Dr. Venkman's picture

USD/JPY will reconnect violently, I am sure.

Thu, 02/13/2014 - 16:11 | Link to Comment jtz5
jtz5's picture

It will only reconnect when USD/JPY is going up.  When it goes down, there's no connection.  Funny how that works.

Thu, 02/13/2014 - 15:42 | Link to Comment firstdivision
firstdivision's picture

Where's our daily update of the clusterfuck known as Bitcoin markets?  I for one miss hearing Phonystar's prudent analysis.

Thu, 02/13/2014 - 15:56 | Link to Comment TuPhat
TuPhat's picture

let me try it for you.  They are going to pump gold as high as they can just so they can slam it big time.  When they slam gold, stocks will have a correlated drop into the abyss and everyone will be buying bitcoin as the only safe haven.    /sarc

Thu, 02/13/2014 - 16:24 | Link to Comment disabledvet
disabledvet's picture

interestingly BTC was hit with a denial of service attack.

that would normally be Government related as I would think trying to a hack that big against (an albeit open) exchange would still be pretty tough.
It also doesn't make any sense for hackers to attack bitcoin...that's literally "their" currency.

In the end we'll never know of course.
http://www.youtube.com/watch?v=Lw4g75nZTxA

Thu, 02/13/2014 - 15:48 | Link to Comment tip e. canoe
tip e. canoe's picture

S&P up + USTs up + PMs up
=
hot paper still flowing down Exeter's Pyramid from EMs?

Thu, 02/13/2014 - 15:50 | Link to Comment Australian Economist
Australian Economist's picture

Question: Why hasn't gold been getting it's daily slamdown lately?

Thu, 02/13/2014 - 16:01 | Link to Comment hobopants
hobopants's picture

Well now that gold and stocks are a couple, slamming gold would slam stocks. Oh the irony Haha

Thu, 02/13/2014 - 15:58 | Link to Comment FieldingMellish
FieldingMellish's picture

Cartel are now long PMs. No more slam downs.

Thu, 02/13/2014 - 15:57 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

I bought JNUG (+16% today) recently. I'm happy I did.

Thu, 02/13/2014 - 15:58 | Link to Comment totem
totem's picture

No correlations... the S&P just jumps on anything that goes up.  It's the Slut & Poor.

Thu, 02/13/2014 - 16:10 | Link to Comment roadlust
roadlust's picture

There is no correlation or logical explanation.  It's simply options week manipulation gone early (because of the holiday). 

The boys need to get out of the puts before and close the gaps on the SPY before things get too hard to hold up. 

After next week, get your popcorn ready for the fireworks.

Thu, 02/13/2014 - 16:13 | Link to Comment jtz5
jtz5's picture

Haven't heard that before...

/sarc

Thu, 02/13/2014 - 16:11 | Link to Comment Yen Cross
Yen Cross's picture

 

Stocks correlated to usd/jpy = higher yields and stronger dollar.

Stocks correlated to xau = weaker $ and lower yields. 

 Equity markets levered to the hilt don't like higher yields, and stronger $ is bad for earnings.

Thu, 02/13/2014 - 16:14 | Link to Comment devo
devo's picture

I was expecting BTC (-8%)! You know, because it's the new gold, and litecoin is the new silver.

I wonder how the nerds feel about their first economic lesson in ponzis.

Thu, 02/13/2014 - 16:17 | Link to Comment skwid vacuous
skwid vacuous's picture

Gartman must be pulling his beard out... tonight he will be "long of both", and get his face ripped off as per usual hopefully by the spooz

Thu, 02/13/2014 - 16:29 | Link to Comment U4 eee aaa
U4 eee aaa's picture

Do not try to understand the market, that's impossible

Instead, only try to realize the truth

What truth?

There is no market

http://youtu.be/dzm8kTIj_0M

Thu, 02/13/2014 - 16:56 | Link to Comment gatorengineer
gatorengineer's picture

Othe positive correlation is that all risk assets have reverted to bad is good again...  what remains to be seen is good good at the same time

Thu, 02/13/2014 - 17:06 | Link to Comment lasvegaspersona
lasvegaspersona's picture

If the S&P can achieve new market highs without new stimulus call me. If it takes POMO to the nth don't bother. Any kid with a printing press could do that.

Thu, 02/13/2014 - 17:08 | Link to Comment lasvegaspersona
lasvegaspersona's picture

Don't forget the Sisters of St. Soache (or whatever...I forget the actual name but I'm sure they are as legit as everything else on Youtube) have predicted the end of the world for the 15th.......so stock up....again.....shit my pantry is so full of 'stock' if we don't have a disaster soon I'll have to move out.

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