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Fed Cat Bounce

Tyler Durden's picture




 

Investors, or perhaps algos, it appears are shocked that the Fed is just as dovish as it has always been (despite endless speeches since Yellen's six month comment - but will not tapering the taper) and today's minutes sparked a short-squeeze loaded VIX-slamming jerk higher to get the Dow back to unchanged from the FOMC statement (S&P back to unch on the month and Nasdaq back to unch on the year). Bond yields ripped lower (the best FOMC minutes day since the Fed announced QE3 expectations) with the short-end outperforming (unwinding only 50% of the flattening post-FOMC) and long-end selling off. Gold and silver had been fading early but rallied on the FOMC minutes (back above $1310). Oil pushed on to $103.50 and copper rallied back to unch (supported by PBOC buying rumors). Credit markets were diverging notably before the FOMC jerk but remain wider on the week. Just as the initial squeeze euphoria ("most shorted" stocks had their best day in 2 months) was fading, the 330 Ramp in JPY occurred and lifted stocks to the highs of the day.

 

  • Biotechs +4% - best day in 12 months
  • VIX -8% - biggest drop a month (2 day -12%)
  • "Most Shorted" +2.1% - stocks best day in 2 months
  • FB +7% (but rest of momos only smaller gains)
  • Nasdaq +1.7% (best in 4 weeks) and back above its 100DMA

Right on time - 330RAMP CAPITAL showed up to try and keep the momentum...

 

As AUDJPY ruled the market once again...

 

The S&P did not make it back to unch from the FOMC (but the Dow and Trannies did)...

 

Nasdaq is back in the green for 2014...(and Russell very close)

 

 

Momo high growth high multiple names bounced but remains down between 10 and 18% from the FOMC...

 

As "most shorted" names rallied the most...

 

VIX cracked 0.5 vols instantly and broke below 14 - but was notably less exuberant about the late day surge...

 

Today was the "most shorted" names best day in 2 months

 

The short-end of the bond curve rallied the most today as the entire complex jerked lower in yields.

 

 This steepened the curve but only retraces half the major flattening that occurred...

 

Credit markets were widening notably this morning but were snapped tighter on the FOMC minutes. It looks like the 330 ramp squeezed the last of the credit shorts back to unch on the week...

 

Commodities all rallied post FOMC...

 

We leave it to Bill Miller (yes that Bill Miller) to end today's market update...

"the conditions for a bad market don't exist"

Trade accordingly...

Charts: Bloomberg

Bonus Chart: "Growth" has retraced only 25% of its relative underperformance to "Value" since the FOMC...

 

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Wed, 04/09/2014 - 16:12 | 4640604 firstdivision
firstdivision's picture

We're saved!

Wed, 04/09/2014 - 16:24 | 4640649 hobopants
hobopants's picture

I think the big issue here is trading on what the Fed is saying rather than what the Fed is doing. The market is the Alamo, they will never give it up or let it fall until the end. It will continue going sky high until the system it's based upon breaks.

Wed, 04/09/2014 - 16:26 | 4640661 i_call_you_my_base
i_call_you_my_base's picture

I disagree. The last line is bonds and they will sink the market to save them.

Wed, 04/09/2014 - 16:28 | 4640676 Soul Glow
Soul Glow's picture

If they keep burning the dollar at the fiat alter of shame then no one will notice.  Well, the poor will notice, but who cares about them?  Right Janet?

Wed, 04/09/2014 - 16:31 | 4640688 i_call_you_my_base
i_call_you_my_base's picture

THE response to credit bubbles is inflation. It's written in the Oligarch Handbook, right before the section on fucking your cousin.

Wed, 04/09/2014 - 16:29 | 4640668 Soul Glow
Soul Glow's picture

Throw a dart.  They're all going up.

- Bill Miller

Wed, 04/09/2014 - 16:41 | 4640735 ebworthen
ebworthen's picture

Saw that too.

Considering the FED's ritual sacrifice of Main Street on the altar of Wall Street he's probably right.

 

Wed, 04/09/2014 - 17:03 | 4640828 Keyser
Keyser's picture

BTFATH - same as always.  

Wed, 04/09/2014 - 16:45 | 4640750 TrustWho
TrustWho's picture

Exactly correct, the stock market performs exactly as designed. The corruption is The Fed. The Fed creates the bubbles and the fools gave them more regulatory power through Dodd-Frank. This is all a charade to keep the 99.9% from killing the crony politicians.

Wed, 04/09/2014 - 16:38 | 4640716 Max Damage
Max Damage's picture

And the multiple expansion continues, simply because the FED doesn't have a clue, and keeps changing its mind, well that or lieing alot

Wed, 04/09/2014 - 16:13 | 4640606 NDXTrader
NDXTrader's picture

Dear Algos...THEY ARE NOT TAPERING THE TAPER! Jesus

Wed, 04/09/2014 - 16:14 | 4640610 Cursive
Cursive's picture

I guess they don't pass copies of "The Emporer's New Clothes" or "Catch-22" around trading desks.

Wed, 04/09/2014 - 16:31 | 4640686 Soul Glow
Soul Glow's picture

C'mon.  Traders are illiterate button pushing monkeys.  Everyone knows that.

Wed, 04/09/2014 - 16:27 | 4640613 Dr. Engali
Dr. Engali's picture

People trying to short this market crack me up. They remind me of Charlie Brown trying to kick the football while Lucy is holding it. Come on Chuck I promise you I'll let you kick it. They fall for the BernakenYellen's trick every time.

Wed, 04/09/2014 - 16:32 | 4640694 Soul Glow
Soul Glow's picture

Until Charlie kicks Lucy in the head.

Wed, 04/09/2014 - 16:35 | 4640709 negative rates
negative rates's picture

I never saw that one, which year did it come out?

Wed, 04/09/2014 - 17:34 | 4640939 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

2008 Nov 2

Wed, 04/09/2014 - 16:15 | 4640615 wmbz
wmbz's picture

No need to pay attention anymore. The machine has it all under control. The dip days are just for sport.

Wed, 04/09/2014 - 16:15 | 4640616 NoDebt
NoDebt's picture

I feel like I'm watching somebody play Cookie-Clicker.  Meaningless, but the numbers keep going up and up and up.  No point, just MOAR.  Perfect game for our times.

Wed, 04/09/2014 - 16:16 | 4640621 devo
devo's picture

Is the "Fed cat" Yellen's pussy? Rank!

Wed, 04/09/2014 - 16:20 | 4640633 dcohen
dcohen's picture

Yellen and pussy should not be used in the same sentence, I feel like throwing up.

Wed, 04/09/2014 - 16:33 | 4640687 TruthInSunshine
TruthInSunshine's picture

Yellen's acidic dark pool.

*That's misogynist!

Wed, 04/09/2014 - 17:09 | 4640857 goBackToSleep
goBackToSleep's picture

I think I just puked a little in my mouth

Wed, 04/09/2014 - 16:42 | 4640742 devo
devo's picture

Plus it is bouncing.

Eek.

Wed, 04/09/2014 - 16:38 | 4640717 ebworthen
ebworthen's picture

I do pity her Gynecologist.

Wed, 04/09/2014 - 16:19 | 4640630 dcohen
dcohen's picture

Bernanke's legacy, the man who destroyed markets, the dollar and USA

Wed, 04/09/2014 - 16:53 | 4640780 devo
devo's picture

That was actually Keynes --> Nixon. Then Greenspan. Bernanke just carried their torch.

Wed, 04/09/2014 - 16:23 | 4640646 CrashisOptimistic
CrashisOptimistic's picture

The algos, down in the deepest lines of the code, have this snippet that says "we can't HFT 80 million years of oil formation underground".

Wed, 04/09/2014 - 16:25 | 4640654 zipit
zipit's picture

All aboard the BTFD.

Wed, 04/09/2014 - 16:27 | 4640664 John Law Lives
John Law Lives's picture

Never underestimate the depth of resolve of the 0.1% elite when it comes to preserving their wealth and their way of life.  Those cocksvckers would stomp on the corpses of the middle class to ensure another day of privilege for themselves.

FedFUBAR.

Wed, 04/09/2014 - 16:30 | 4640682 NaiLib
NaiLib's picture

Eventually FED will own 100% of all Treasuries. And the American People will own trillions of USD that are wrth nothing.. That's it.

Wed, 04/09/2014 - 21:52 | 4641741 TheRideNeverEnds
TheRideNeverEnds's picture

I have an idea, we make those American people buy aforementioned treasuries.  We tell them that it is a guaranteed profit.  Tell them how its a no risk great investment and they cant lose so buy them, to uh.. secure their retirement or something like that .  We can give it a cool, hip name like myRA.

Wed, 04/09/2014 - 16:31 | 4640690 ebworthen
ebworthen's picture

Lies are so easy to tell these days.

Getting close to $18 Trillion lies:  http://www.usdebtclock.org/

Wed, 04/09/2014 - 16:32 | 4640692 Hubbs
Hubbs's picture

Classic "baffle them with bullshit" at work here.   When your airplane is in an inverted spin and you don't know how to recover, the only option is to cover the instrument panel so no one one will ever be able to know what's going on until the "splat."

Wed, 04/09/2014 - 16:32 | 4640696 Cupid Stunt
Cupid Stunt's picture

...........thanks for the advice Abe..........

Wed, 04/09/2014 - 16:53 | 4640730 gapcrap
gapcrap's picture
seasonally appropriate; israeli stock market led...
couldn't passover getting long or writing the following - it's part homage to mel brooks, part gratitude to one of my favorite leading indicators, and thanks to our new fed chairperson
    • hey janet yellen
      what do you say 
      you must be learning
      ya saved the bulls today

      you made it done,

      a fait accompli
      a jew from brooklyn
      just set us free

      it was just a flash thought

      a fact i did contemplate
      what the struggling market
      had been missing to date

      conspicuously absent

      was any help from zion
      although I’m sure it’s not
      for any lack of gods' tryin

      but, u know what they say

      & it  just might be true they're good with money
      know business and fair value

      so, like Moses before ya
      his people he led
      u didn't pass us over, &
      got the spx out of the red

     

    Wed, 04/09/2014 - 17:02 | 4640820 adr
    adr's picture

    So more confirmation that the Fed is the market. Not commerce, not sales, not demand, not capitalism in any form.

    Just a gang of fucks trying to enrich as many of thier tribe as possible. If the rules of the game say the game is failing, they change them until it looks like they are winning. Mark to market, GAAP, GDP, PMI, earnings, Employment, all manipulated and completely worthless.

    The only thing that stops those with no remorse is death. DEATH TO THE MONEY CHANGERS!!!

    Wed, 04/09/2014 - 17:36 | 4640945 The_Ungrateful_Yid
    The_Ungrateful_Yid's picture

    Sick fucking world, what a depressing time to live.

    Wed, 04/09/2014 - 17:05 | 4640836 ebworthen
    ebworthen's picture

    Just cashed out more of my I.R.A. to pay the bills.

    Joked with the Gal on the phone that she'd better hold back the 10% I.R.S. penalty because they needed my tax dollars to send to Ukraine.

    She laughed, in an understanding way.

    Wed, 04/09/2014 - 18:03 | 4640980 Wait What
    Wait What's picture

    5%. there's that threshold again. works every time.

    Wed, 04/09/2014 - 18:51 | 4641149 AdvancingTime
    AdvancingTime's picture

    Of course, the market and bears in particular are jumpy.  Over the last several years a pattern of a random statements from the Fed and several other sources have caused crazy and illogical rallies. An unholy alliance of the Federal Reserve, the government, and the too big to fail has left those of us who question the validity of the recovery in a precarious position.

    For the big boys, its insider information and computer trading, this includes computing patterns that exploit where stops are placed, this improves their ability to wash the timid and weak bears out of their positions in this manipulated market. More on why a trap should be expected in the article below. The good news is someday it won't work and the light of truth will show through.

    http://brucewilds.blogspot.com/2014/04/bears-have-little-reason-for-conf...

    Wed, 04/09/2014 - 21:14 | 4641606 Save_America1st
    Save_America1st's picture

    do dead doves bounce?

    Do NOT follow this link or you will be banned from the site!