What Are Stocks Doing?

The US equity market took 16 hours to fall 15 points and 90 minutes this morning to recover amid an absolutely dismal retail sales print. The full bulltard farce of disastrous news being great news is writ large in stocks as they decouple from any FX carry or bond market sense of reality.

Bonds and stocks are no longer friends...

and FX carry is dislocated as S&P 500 futures "beta" to JPY doubles as stocks open (80 pips down in JPY and 14 point drop in ES...

40 pips up in JPY and 15 point rise in ES)

It does seem that stocks are circling around gold to some extent though...

One has to wonder at this clear level of total schizophrenia whether the analog that everyone loves to hate is on the cards...

Charts:Bloomberg

Comments

[cassotto]

meanwhile the nasdaq has reached full-retard all time new highs

cnbc: macro numbers were bad because of the bad weather

bad (weather) = good (weather), therefore we must move another leg higher

stocks are cheap

[oceanwavesgoodbye]

Ok, long time caller first time listener here. I'm extremely uneducated with all this so please excuse my ignorance. But if the s&p is pretty much always tracking with usdjpy now, then what was the Dow tracking with in 1929? I mean it seems like whatever happens with usdjpy effects the s&p directly, so what was the correlation to the dow back then, and how does all of it correlate together? How does whats happening now with stocks correlate to then if theres different forces at play? Or is there? Again, sorry for my ignorance. I'll listen to my answer off air.

[Praetorian Guard]

http://www.gold-eagle.com/article/gold-stocks-and-great-crash-1929-revisited-0

[MeelionDollerBogus]

http://flic.kr/p/enJ7Cs

matches well with what else I found in back-testing (some re-scaling required but rectangles indicate where & by how much).

Sorry I didn't find an actual time-series equation, it would be rather pointless. Scatterplots would have been possible but really, the picture on its own tells the story.