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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 | 4433308 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 | 4433316 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 | 4433350 Stoploss
Stoploss's picture

WOO HOO!!!!

 

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

Thu, 02/13/2014 - 15:52 | 4433438 SovietCong
SovietCong's picture

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

Thu, 02/13/2014 - 16:08 | 4433489 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 | 4433808 FuzzyDunlop21
FuzzyDunlop21's picture

whateer gets it highest

Thu, 02/13/2014 - 15:21 | 4433323 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 | 4433329 derek_vineyard
derek_vineyard's picture

wake me when its over

Thu, 02/13/2014 - 16:09 | 4433496 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 | 4433548 Transformer
Transformer's picture

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

Thu, 02/13/2014 - 16:36 | 4433624 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 | 4433310 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 | 4433311 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 | 4433314 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 | 4433430 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 | 4433547 disabledvet
disabledvet's picture

JPM has been long since last fall.

Nuff said...move along.

Thu, 02/13/2014 - 16:21 | 4433570 ReactionToClose...
ReactionToClosedMinds's picture

good observations...thks

Thu, 02/13/2014 - 16:24 | 4433576 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 | 4433621 vulcanraven
vulcanraven's picture

Get busy livin'...

or get busy dyin'

Thu, 02/13/2014 - 17:20 | 4433819 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 | 4433856 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 | 4434035 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 | 4433324 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 | 4433337 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 | 4433339 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 | 4433367 Ham-bone
Ham-bone's picture

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

Thu, 02/13/2014 - 15:39 | 4433370 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 | 4433587 saints51
saints51's picture

I think you pretty much nailed it.

Thu, 02/13/2014 - 15:50 | 4433439 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 | 4433475 hobopants
hobopants's picture

Except the gold in this case is paper too right?

Thu, 02/13/2014 - 16:21 | 4433557 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 | 4433784 BandGap
BandGap's picture

Not all of it.

My silver mining stocks are hopping today, too.

Thu, 02/13/2014 - 17:26 | 4433633 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 | 4434298 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 | 4433347 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 | 4433361 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 | 4433394 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 | 4433405 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 | 4434056 Panafrican Funk...
Panafrican Funktron Robot's picture

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

Thu, 02/13/2014 - 21:57 | 4434867 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 | 4433381 GolfHatesMe
GolfHatesMe's picture

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

Thu, 02/13/2014 - 15:37 | 4433393 Dr. Venkman
Dr. Venkman's picture

USD/JPY will reconnect violently, I am sure.

Thu, 02/13/2014 - 16:11 | 4433504 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 | 4433399 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 | 4433453 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 | 4433572 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 | 4433429 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 | 4433432 Australian Economist
Australian Economist's picture

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

Thu, 02/13/2014 - 16:01 | 4433461 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 | 4433465 FieldingMellish
FieldingMellish's picture

Cartel are now long PMs. No more slam downs.

Thu, 02/13/2014 - 15:57 | 4433449 _ConanTheLibert...
_ConanTheLibertarian_'s picture

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

Thu, 02/13/2014 - 15:58 | 4433458 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 | 4433495 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 | 4433520 jtz5
jtz5's picture

Haven't heard that before...

/sarc

Thu, 02/13/2014 - 16:11 | 4433500 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 | 4433519 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 | 4433531 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 | 4433589 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 | 4433690 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 | 4433738 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 | 4433771 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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