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Stocks Turn Red For The Year While Nasdaq Smashed Most Since October 2011

Tyler Durden's picture




 

Early hope faded into middle-of-the-day-despair which was rescued (briefly) on a sea of JPY carry (which dragged the S&P all the way to VWAP) then crashed and burned on the shores of dismal reality into the close. USDJPY was in charge and 103 was the magic number that kept the S&P 500 from breaking its 50DMA (for now). The Nasdaq and Russell were ugly as Biotechs' early ripfest gave way. This is the biggest 2-day swing lower in the Nasdaq since Oct2011. Treasuries rallied modestly on the day (-2bps) as the USD weakened 0.25% led by EUR strength. Copper rallied from an overnight dump low but gold (~$1300), silver (~$20), and oil (~$100) all clustered around -0.5%. VIX tested up to 16 intraday but was rammed lower as the 330 ramp too early to hold and merely enabled VWAP sellers out... and we closed near the lows...

As we reminded everyone...

USDJPY and stocks glued at the hip...

 

VIX was also banged at around 230ET but lost contact...

 

The ramp efforts made the S&P 500 rise to VWAP and that was that ...

 

And rescued it from the 50DMA (green)...

 

The S&P 500 oscillated around unchanged for the year with the Dow, Nasdaq and Russell all notably red...

 

Utilities are up around 9% YTD as all the broad QE/growth sectors pulled back to unch...

 

The Nasdaq has plunged over 5% from Friday's highs - its biggest 2-day swing since oct 2011

 

Biotechs dumped, pumped, dumped and VWAP bounced as the 200DMA ($132 on Bioecth ETF) was crucial...

 

BTFD?

  • Biotechs -24% (at 200DMA)
  • NFLX -27% (at 200DMA)
  • TWTR -43% (below every moving average, near all-time lows)
  • FB -24% (well below 200DMA)
  • P -33% (well below 200DMA)
  • TSLA -22% (below 50DMA)

 

Charts: Bloomberg

Bonus Chart: The smart money is leaving the building in a hurry...

 

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Mon, 04/07/2014 - 16:11 | 4633343 TheRideNeverEnds
TheRideNeverEnds's picture

BTFD

Mon, 04/07/2014 - 16:12 | 4633350 NOTaREALmerican
NOTaREALmerican's picture

Buying opportunities like this happen only once a generation.   Don't miss out!

Mon, 04/07/2014 - 16:18 | 4633375 Say What Again
Say What Again's picture

I'm looking forward to reading the headline that says "Stocks Smashed Most since 1987"

Mon, 04/07/2014 - 16:24 | 4633393 Supernova Born
Supernova Born's picture

"Crashed and burned on the shores of dismal reality"

Love it.

"Are you nervy, irritable, depressed, tired of life? Keep it up."

Monty Python Mortician

Mon, 04/07/2014 - 16:26 | 4633396 Say What Again
Say What Again's picture

Did they have "Fat Fingers" back in Oct of 1987?

Just wondering

Mon, 04/07/2014 - 16:29 | 4633408 dcj98gst
dcj98gst's picture

Going to be a fat fist soon.

Mon, 04/07/2014 - 16:39 | 4633446 aVileRat
aVileRat's picture

No tears.

Technical level breached, and RSI general trend reversed so the signal switchers like Rentech are now trading down negative on 100D and 50D. Most tech funds, some which are worth 15B leveraged (!!!) are down over 18% YTD. Margins and cash calls will accelerate, esp. since the chinese tech IPO multiples are going to be subpar to the 2013FY estimates and the King Digi IPO.

NO sympathy for anyone long right now. Unless you know what exactly what you own, and they are going to beat the 1Q, do not expect anything further in beta growth until after the October elections. I could be wrong, but I doubt it.

On that note, gold bugs should recognize that gold is an inflation hedge. This is a deflationary cycle and most GLD (and gold) was purchased on discretionary income + speculative leverage. Both of those two income streams are going negative bigtime, which implies that this is going to be a standing room only event when Yellen + Draghi must accept the ZIRP bound does not exist in reality.

Ironically, Bill Gross, like Meredith Whitney is correct. It's just his timing, like Tyler was off by about 1 year due to the solvency of the US Fed's asset purchasing strip.

For a second dose of irony, Mark Mobius was on Bloomberg shilling Emerging markets like Russia. If anyone with half  a brain remembers what happened after 1987 and everyone piled into the Russia/Asian Tiger trade then this is deja vu all over again. When the Singapore host quizzed Mark if he was conflicted by sitting on Rosneft's board while shilling MSCI in lieu of record low liquidity + 1987 analogs he swallowed hard. Hard enough you could see his eyes twitch without HDTV on the trade desk.

This is going to be fun.

 

Mon, 04/07/2014 - 17:48 | 4633660 constantine
constantine's picture

Remind me where the deflation is.  Risk assets going down has nothing to do with it.  Oil hangs around $100, natural gas is up substantially, and food inflation is up 20% on the year. 

Gold, yes, is an inflation hedge.  It's also a meltdown hedge if/when counterparty risk becomes a huge issue (it will).  This is what is referred to when people call gold a deflation hedge.  Gold should do horrible when encountered with the other kind of deflation caused by increases in productivity.  I believe that these details are often misunderstood as it pertains to gold.

Gold will do fine this time around if stocks crash.  Remember all the leveraged players were long in 2008.  Now they're short.  If there are margin calls with leveraged stock traders, I suspect that the the gold positions that will be liquidated to raise cash will be those on the short side.  I look for a short squeeze in gold if there is a massive stock selloff.  Plus, all evidence points to a much tighter physical market than a few years ago.  They're running on fumes here.

Mon, 04/07/2014 - 18:12 | 4633747 Citizen_x
Citizen_x's picture

FWIW...Today's dead cat bounce on the NASDAQ was small

Mon, 04/07/2014 - 16:47 | 4633475 wallstreetapost...
wallstreetaposteriori's picture

The headline will Read; "stocks smashed, investors broke, not the weathers fault"

Mon, 04/07/2014 - 16:56 | 4633503 Say What Again
Say What Again's picture

You might get something like this -

NEW YORK - U.S. stocks gained on Monday with the S&P 500 posting its biggest three-day gain in four months, as investors bid up Internet stocks and rotated into speculative names after learning of WW-3 starting in eastern Europe.  Analysts also felt that the three major earthquakes, two tsunamis, and global hoard of locust contributed to inverter optimism.

Mon, 04/07/2014 - 16:31 | 4633415 negative rates
negative rates's picture

No, but the fat lady was tuning her vocals.

Mon, 04/07/2014 - 16:34 | 4633422 Headbanger
Headbanger's picture

Looks like the Tylers were right these past few months taunting BTFATH after all!

We may well see a bounce the next few days but this big drop the past two days must be causing a lot of fear into the bulls.

And what happens when the algos stop working in a downward market cause they're tuned for it always rising?

The plug gets pulled on the algos and all those bullshit bids vanish and we get an implosion!

Mon, 04/07/2014 - 19:57 | 4634103 Squid-puppets a...
Squid-puppets a-go-go's picture

or rather, the sell algos take over from the buy algos

Mon, 04/07/2014 - 16:25 | 4633395 Supernova Born
Supernova Born's picture

double

Mon, 04/07/2014 - 16:41 | 4633453 mtndds
mtndds's picture

Dont worry folks, tomorrow everything will be at record highs.  Minor setback only, please move along...

Mon, 04/07/2014 - 16:47 | 4633476 goBackToSleep
goBackToSleep's picture

Not Looking forward to it, just want it to happen on my watch instead of the progeny. They are young and can adapt.

If you grew up swimming in the excess of the 80's & 90's it's going to be a really cold lonely place. No more icrap to warm the hands for the x and y crowds.

Mon, 04/07/2014 - 16:14 | 4633360 Caracalla
Caracalla's picture

You got that right!  We are now techically oversold in a big way...which means a big rally tomorrow....which means BTFD

Mon, 04/07/2014 - 17:10 | 4633547 Spastica Rex
Spastica Rex's picture

I think your predicted outcome is just as likely as the "doom has finally arrived!" scenario.

Haven't we all seen this movie every few months for the last five years?

Mon, 04/07/2014 - 17:01 | 4633516 slaughterer
slaughterer's picture

Do not underestimate the power of Q1 earnings hype to turn the market against the bears.  Analysts have played along very well the last few weeks so that (lowered) earnings will beat across the board, and the most-shorted index and Russell2000 will be back stabbing the shorts left and right.   We will already see it starting tomorrow. 

Mon, 04/07/2014 - 17:07 | 4633539 Squid Viscous
Squid Viscous's picture

It's almost tax time... haven't filed in a while instead i play this game for a few hours every April 15th>

http://www.newgrounds.com/portal/view/528055

Mon, 04/07/2014 - 17:18 | 4633567 Wahooo
Wahooo's picture

Very true. Biotechs amd spec techs get hammered and the screaming meemies think the world is ended.

Mon, 04/07/2014 - 17:25 | 4633592 SAT 800
SAT 800's picture

Article needs a graphic with a Bear; big ugly sucker; all teeth. caption something like, "yeh team; get em; bite, claw, choke; go for it".

Mon, 04/07/2014 - 16:12 | 4633348 syntaxterror
syntaxterror's picture

I guess my buy order for 1,000,000,000 ES didn't make it thru to ramp this thing back to its all time high.

-Kev

Mon, 04/07/2014 - 16:13 | 4633354 fonzannoon
fonzannoon's picture

someone seriously needs to explain the 10yr. we should be south of 2.6% right now.

Mon, 04/07/2014 - 16:15 | 4633362 Caracalla
Caracalla's picture

By the time the markets get ready to sell off, the ten year will be testing its highs...and will probably break them!

Mon, 04/07/2014 - 16:41 | 4633455 Caracalla
Caracalla's picture

Somebody's buying them.  Given the uncertainty is their domestic economies right now, I would guess that both China and Russia are net buyers of the 10 year although publically they will deny it.  Also, people believe, rightly or wrongly, that Mario Draghi is about the unleash the mother of all QEs, which would provide plenty of demand for bonds, worldwide.

Mon, 04/07/2014 - 16:26 | 4633398 dcj98gst
dcj98gst's picture

Everybody and their mother is selling right now.  China, Russia piling on.  Only FED & Belgium floating.

Mon, 04/07/2014 - 17:14 | 4633555 Callz d Ballz
Callz d Ballz's picture

We'll need a lot more red first.  Avalanche affect after 2.6%...

Mon, 04/07/2014 - 17:21 | 4633577 Boston
Boston's picture

Yes.

The US equity sell-off is nothing but a scratch......so far.

Mon, 04/07/2014 - 17:32 | 4633610 SAT 800
SAT 800's picture

Scratch>infection>septicemia>death. everything starts with a scratch; the question is; is this a healthy animal, this stock market; and the answer is no.

Mon, 04/07/2014 - 17:33 | 4633613 SAT 800
SAT 800's picture

You mean where did the money go? into Money Market Funds, probably.

Mon, 04/07/2014 - 17:33 | 4633614 PAWNMAN
PAWNMAN's picture

Maybe that joke of a "flight to safety" trade may be finally wearing thin?

Mon, 04/07/2014 - 18:31 | 4633517 jtz5
jtz5's picture

.

Mon, 04/07/2014 - 17:35 | 4633618 SAT 800
SAT 800's picture

After 7 digits it's recorded as an error in transmission; try again next time with just a million. LOL. just joking.

Mon, 04/07/2014 - 16:13 | 4633356 101 years and c...
101 years and counting's picture

BOJ to save the day tonight.  right????  as BTFATH'ers aren't even breaking a sweat.  every dip has been bought since nov, 2012.  every dip.

Mon, 04/07/2014 - 16:28 | 4633403 dcj98gst
dcj98gst's picture

Just when this is the mentality is when it goes the other direction.

Mon, 04/07/2014 - 17:29 | 4633601 SAT 800
SAT 800's picture

Every dip is always bought until the last one. The easy money right now is in the hands of the shorts; sell Friday's close of the S&P with a futures contract; ES; and collect money today. Too late? wait for the next silly spike up that sticks out of the daily price chart like a nail waiting to be pounded down, and short that one. This is called easy money. It's a momentum market that can't; connot; make any significant new highs; any spike highs for a day need to be sold.

Mon, 04/07/2014 - 16:14 | 4633359 22winmag
22winmag's picture

Major earthquakes are generally preceeded by tremors... maybe it's the big one this time.

Mon, 04/07/2014 - 16:17 | 4633374 starman
starman's picture

Somebody bring baby Bernakie baaack! Im having a bad baad day, bruhaha! nah fuckem all son!

Mon, 04/07/2014 - 16:19 | 4633377 Rainman
Rainman's picture

Durden Twatter Taunting is a nice touch

Mon, 04/07/2014 - 16:20 | 4633379 ...out of space
...out of space's picture

did Liseman told me a lie?

Mon, 04/07/2014 - 16:32 | 4633418 negative rates
negative rates's picture

He's over that, he lives it now.

Mon, 04/07/2014 - 17:34 | 4633616 holmes
holmes's picture

If Cramer's bullish, it definitely is Armegeddon time.

Mon, 04/07/2014 - 16:21 | 4633386 wmbz
wmbz's picture

The Titanic may have sprung a wee tiny leak. Not a problem! Capt.Jack Yellen has her crew on the pumps.

Please go on with your dining, dancing & drinking.

Mon, 04/07/2014 - 16:22 | 4633389 monopoly
monopoly's picture

Will be so glad when this all ends and it is over. Then, we can start over. 

Mon, 04/07/2014 - 16:31 | 4633412 BandGap
BandGap's picture

If you have ever watched someone who didn't want to.....die, it is a very drawn out, agonizing ordeal.

Yes, let's get to the next stad\ge. the problem is the inertia of the last. Sometimes people/institutions fight till the end. The ordinary person (via retirement, 401K) was drawn into this by plan. They will twist away from the pain and the inevitable.

They watch CNBC and hope.

Mon, 04/07/2014 - 17:21 | 4633578 MillionDollarBoner_
MillionDollarBoner_'s picture

Uuuhhh...but, dude, what will we do then?

Life will seem kinda empty and cold once we are finally proved right.

There's only so much self-congratulation we can spin out. Then what?

Only sayin...;O)

Mon, 04/07/2014 - 16:28 | 4633402 q99x2
q99x2's picture

Unless Russia is forced to abandon the petro dollar by the TOTNWO I'm not worried. Banksters are out of options except for the market and printing.

Mon, 04/07/2014 - 16:28 | 4633405 philosophers bone
philosophers bone's picture

The "Great Rotation" from bonds to equities hasn't even happened yet.  Time to leverage up and take advantage of this buying opportunity!  There's basically no risk when you factor in the Great Rotation and the Bernanke / Yellen Put.  Long Term, this market is only going one way (up, if I need to spell it out for you).  Growth is happening everywhere, even Nigeria.  Also, Cramer "believes" in this rally and thinks some stocks are cheap!  Whatever you do, don't sell Bear Stearns.

Mon, 04/07/2014 - 16:31 | 4633414 dcj98gst
dcj98gst's picture

NO they will tank equities to support the bond market.  They don't care about the stupid equities.  The gig is up.  The petrodollar is mortally wounded with the double eagle replacing the swift.  They are crediting Belgium to pump the us paper.  

Mon, 04/07/2014 - 16:33 | 4633420 polo007
polo007's picture

http://www.theaureport.com/pub/na/ted-dixon-what-gold-stock-insider-trading-tells-us

The Gold Report: The price of gold fell more than 6% in March. To what do you attribute this?

Ted Dixon: Gold took a one-two punch in late March. The first was the widening of the renminbi trading ban in China by 2%, which added extra costs to buying and hedging gold. The second was the surprisingly hawkish tilt of the U.S. Federal Reserve, pointing to interest rates rising a little bit sooner. Tighter monetary conditions do not usually benefit gold.

TGR: Increased import duties in India haven't reduced gold buying there. Why would China be different?

TD: I think the flows are different. In China, there is a lot of financial activity related to gold, whereas in India gold buying is cultural and driven by consumer consumption.

TGR: We've heard about greatly increased governmental buying in China, have we not?

TD: There have been rumors of that, and the Chinese media has called for the government to boost its gold reserves. That could provide a longer-term counterbalance to the shorter-term renminbi pressure.

TGR: DataQuick's latest U.S. national homes sales snapshot shows that "prices are flatlining or drifting lower while sales are sinking like a stone." Meanwhile, "The big private equity firms [are] exiting the [housing] market." These data don't suggest a U.S. economic recovery, do they?

TD: Basically, insiders are telling us that stock prices now have priced in a lot of good news, so it would be interesting to see how they react to whips to the downside. One has to be cognizant that much of the U.S. equities rally has been driven by the Fed and, arguably, has little to do with GDP growth one way or the other.

TGR: With regard to this hawkish tilt, it has been assumed for several years that we'd see higher interest rates and an end to quantitative easing (QE) only after an economic recovery. Given how weak the U.S. economy remains, can we assume that the Fed believes it is close to exhausting the utility of zero interest rates and quantitative easing?

TD: The Fed has a big ticking time bomb on its balance sheet. It is still piling up reserves, and I'd love to be a fly on the wall in staff meetings that don't get reported. I have to assume there is much concern about what happens to those reserves, particularly if the economy does surprise on the upside. In this sense, the low-altitude economy has been a blessing for the Fed.

We may have a little game of bluff going on here. The Fed is taking a hawkish stance now, saying it has to move rates up earlier, but, of course, if the economy remains weak, and the Fed has to backtrack, that opens up risks on the other side. The Fed has been running a big monetary policy laboratory over the past few years, and sometimes in laboratories accidents happen. At this point, however, the stock market seems to have assigned a very little risk premium to something bad happening.

TGR: It has been argued that if you remove the Fed's monthly stimulus from the monthly GDP report, GDP is actually shrinking, not growing.

TD: The Fed has certainly manipulated the economy. It has picked its favorite sectors, housing and autos. I believe that Operation Twist and QE have hurt the commodities base because they have favored interest-sensitive industries. Now, however, these industries will have to stand on their own two feet, and we'll see how this experiment in industrial policy works out. Usually, planned economies have a day of reckoning when stimulative measures run out of steam.

Ted Dixon is co-founder of INK Research (Insider News and Knowledge), Canada's first online financial news and research service dedicated to providing data on public company insider trading. (Free services are found on CanadianInsider.com and InsiderTracking.com.) He worked previously for Connor, Clark & Lunn Financial Group in portfolio strategy and product development, the Fraser Institute as an analyst, TD Bank as a treasury specialist and the Vancouver Stock Exchange as a floor trader. He has lectured in corporate finance at the BC Institute of Technology and is a Chartered Financial Analyst and member of CFA Vancouver. He holds a Master of Business Administration in financial management from the University of Chicago.

Mon, 04/07/2014 - 16:34 | 4633423 dcj98gst
dcj98gst's picture

Furious Putin Orders “Project Double Eagle” To Destroy US, EU Economies

 

http://www.whatdoesitmean.com/index1759.htm

Mon, 04/07/2014 - 16:35 | 4633425 polo007
polo007's picture

http://truthfrequencyradio.com/how-far-will-stocks-fall-this-time-when-the-fed-decides-to-slow-down-quantitative-easing/

From the time that QE1 was announced to the time that it ended, the S&P 500 rose from about 900 to about 1,200.

When QE1 ended, the S&P 500 fell back below 1,100.

In a panic, the Federal Reserve first hinted at QE2 and then finally formally announced it. That round of QE drove the S&P 500 up to a bit above the 1,300 mark.

Once QE2 ended, there was another market correction. The S&P 500 fell all the way down to 1,123 at one point.

In another panic, the Federal Reserve first announced “Operation Twist” and then later added QE3. Since that time, the S&P 500 has been on an unprecedented tear. At this point, the S&P is sitting at about 1,800.

Mon, 04/07/2014 - 16:36 | 4633433 dcj98gst
dcj98gst's picture

Russia and China gold standard will be soon:

 

https://www.youtube.com/watch?v=GjaCh0S2nu4

Mon, 04/07/2014 - 16:40 | 4633438 Squid Viscous
Squid Viscous's picture

seen this movie before, loaded up on calls of the most worthless POS stocks today, seriously... fool me once shame on me, fool me 29 times, shame on... not gonna get fooled again

Mon, 04/07/2014 - 16:53 | 4633496 Rainman
Rainman's picture

atta boy , soldier !

Mon, 04/07/2014 - 19:19 | 4633969 LooseLee
LooseLee's picture

Let me know how that works out for you...

Mon, 04/07/2014 - 16:50 | 4633485 Ban KKiller
Ban KKiller's picture

I dunno...has the HFT "issue" freaked someone(s) out a bit? Or are the accountants spilling the beans? Insiders selling can't be good for the muppets, can it?

Hide the shitgums for sure. 

Mon, 04/07/2014 - 17:31 | 4633607 disabledvet
disabledvet's picture

"smart money" becomes dumb money too. I would call that HOT money...not "smart" money anyways.

If I were advising the President I would point to the map with Ukraine and...well, say nothing actually.

70 years of peace is worth explaining to people...ideally with back up, without funny flags or weird rallies either.

Congress will not vote for boots on the ground..."nor will Zero Hedge I'm afraid Mr. President."

Mon, 04/07/2014 - 19:15 | 4633957 LooseLee
LooseLee's picture

The NY Fed Boys are a bunch Of PUSSIES. Come on out to the NE where we will show you what life is all about...

Mon, 04/07/2014 - 21:40 | 4634386 luna_man
luna_man's picture

 

 

Speculate, all you want...I'm losing my money "SHORTING"!!

 

CRIMINALS, have it coming(:

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