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Stocks Retrace Putin Gains As Copper And Yen-Carry Crash

Submitted by Tyler Durden on 03/11/2014 16:02 -0400

Just before the European close, copper prices on the LME (and US futures) began to crack on rumors that another China corporate had defaulted. This plunge was accompanied by a collapsed in AUD and rumors across desks were a levered fund unwind (which appears some China-commodity play) was responsible. While many would like to believe that fundamentals matter, today made it clear they don't as AUDJPY weakness dragged stocks lower tick-for-tick. A brief moment of hope in the early-afternoon - where VIX was slammed lower as momentum away from carry was sparked failed and stocks continued to slide, retracing a considerable amount of post-Putin gains. Bonds and gold were bid (after the latter suffered early) as WTI crude slipped back under $100 and copper was crushed.

AUDJPY led the S&P lower... (note the brief hope in blue) where stocks disconnected higher...

Which was driven by a slamdown effort in VIX (blue)

With AUD's collapse starting as Europe closed along with Copper's dive...

All major indices fell today - retracing much of the post-Putin gains...

Bonds remain discnncted from stocks thanks to the squeeze on Friday with payrolls - we suspect the bearish bias is being sustained thanks to the massive size of corporate issuance recently and need for rate-lock hedging by dealers...

Gold outperformed and caught back up to Putin levels but overall commodities suffered on the day...

FX markets have been domianted by AUD strength and JPY weakness since Putin but that is unwinding rapidly - note that the USD Index is now unchanged since Putin's speech!

"Most Shorted" stocks are getting hammered relative to the market (which is thi new normal is worrisome as it provides more ammo for the next ramping leg.. until it doesn't)...

Credit markets remain very skeptical...

Charts: Bloomberg

Bonus Chart: The hedge-fund hotel GSEs took it on the chin. Presenting - the Ackcat

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Tue, 03/11/2014 - 16:05 | 4535547 Devotional

a small correction to 1720? 3 weeks of overall momentum downwards, then it's back to BTFD?

Tue, 03/11/2014 - 16:17 | 4535586 max2205

Love the dead black cat

Tue, 03/11/2014 - 16:29 | 4535625 WhyDoesItHurtWh...

Disclaimer: No animals were hurt during the production of this chart.

Tue, 03/11/2014 - 17:29 | 4535815 James_Cole

Copper be scarin' folks, need war asap.

Tue, 03/11/2014 - 18:57 | 4536082 kaiserhoff

Fun day in the "efficient" markets.

Thanks, Tylers.

Tue, 03/11/2014 - 16:06 | 4535551 g'kar

A couple of blown fuses in the printer, all will be back to abnormal soon.

Tue, 03/11/2014 - 16:09 | 4535565 SAT 800

I got out just in time to avoid taking a profit on my S&P shorts; sigh. I hate the stock market.

Tue, 03/11/2014 - 16:10 | 4535576 SAT 800

Why didn't I short Copper last week? God only knows; Maybe I'm getting old. I never even considered it.

Tue, 03/11/2014 - 16:16 | 4535584 Dr. Engali

If only Robotrader were still around to tell us what trades to make after it's moves already happened.

Tue, 03/11/2014 - 16:19 | 4535598 Headbanger

No worries.. Fonerats will be here any minute to tell us how wonderful those Bitcoynes are again.

Tue, 03/11/2014 - 16:18 | 4535591 Dollarmedes

So the EU markets (home of the gold fix) close, and then copper takes a dive? Hmmmm....

Tue, 03/11/2014 - 16:21 | 4535603 Dollarmedes

"While many would like to believe that fundamentals matter, today made it clear they don't..."

Except for, you know....copper.

Tue, 03/11/2014 - 16:34 | 4535642 GooseShtepping Moron

Fundamentals DO matter, but for too long they have mattered only as the instigating causes of countercyclical market manipulation. Copper is a case of fundamentals mattering the way they're supposed to, which in the New Normal counts as not mattering.

I think. It gets pretty hard to keep up with this stuff.

Tue, 03/11/2014 - 16:20 | 4535599 Debugas