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VIX Hits 14-Month Low As Stocks Rally On Lowest Volume Of The Year

Tyler Durden's picture




 

Another day, another melt-up on the lowest volume of the year and VIX collapse. The Dow and the Nasdaq almost made it back to unchanged for the year; The Dow almost made it back to unchanged for May; but as the S&P surged towards its record highs once again, "most shorted" stocks led the way with a massive squeeze (almost 4% in the last 2 days). VIX broke back below 12 once again trading at its lowest in 14 months. Equity markets decoupled notably once again from bonds. Treasury yields rose once again at the long-end (30Y +8bps on the week, 5Y -1bps) but the steepening trend stalled today. The USD rose today (+0.2% on the week) led JPY weakness. USDJPY was in charge of stocks with a correlation over 90% once again. Commodities all closed higher with WTI testing $104 again. HP's 'early' release of earnings appeared to take the shine off things into the close as VIX gapped higher back above 12 to close...

 

This is the lowest NYSE volume in at least a decade - even for this holiday time of year...

 

Spot the down-day in the volume chart...

 

"Most Shorted" stocks have surged almost 4% in the last few days - almost tripling the broad market as hedge funds have yet another bad week...

 

Squeeze-a vu...all over again...

 

As the Momo stocks have exploded higher since last Thursday's lows...

 

Which is what supported the Russell and Nasdaq in their epic ramp of the last few days...

 

A close-up of today...

 

VIX was run even lower - to its lowest intraday since March 2013... (still room to go for the 9.39 all-time intraday lows on 12/15/06)

 

But look at the illiquidity in VIX... and a very ugly close once the HP reesults hit...

 

USDJPY was in charge of stocks...

 

Once again - stocks decoupled from bonds... that hasn't worked out so well recently for stocks...

 

Commodities rose on the day - despite a higher USD

 

 

 

Charts: Bloomberg

Bonus Chart: The spread between Q1 GDP and Q2 GDP expectations is now over 4percentage points as Q2 jumped this week to +3.5% consensus...

 

Bonus Bonus Chart: Looks like the Fed's transmission mechanism to housing has finally broken...

 

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Thu, 05/22/2014 - 16:10 | 4786152 hugovanderbubble
hugovanderbubble's picture

Market NO LONGER EXISTS ( MARK TO MARKET)

Thu, 05/22/2014 - 16:17 | 4786181 LawsofPhysics
LawsofPhysics's picture

mark to fantasy bitchez...

 

yes, it's very hard to price or value anything when fraud and corruption has completely destroyed the underlying currency you are trying to price everything in...

 

Thu, 05/22/2014 - 16:28 | 4786221 flacon
flacon's picture

Putin speaks 06:30am EDT tomorrow morning. 

http://www.cnbc.com/id/101697110

Thu, 05/22/2014 - 16:43 | 4786294 NoIdea
NoIdea's picture

"Putin speaks 06:30am EDT tomorrow morning. "

That's bullish, regardless of what he actually says

Thu, 05/22/2014 - 17:54 | 4786541 Okienomics
Okienomics's picture

Speaking of which, news about China dropping U.S. dollar transactions with one country... is this a temporary thing or a test case?

 

http://www.reuters.com/article/2014/05/22/afghanistan-banking-idUSL3N0O8...

Thu, 05/22/2014 - 16:13 | 4786161 Tsar Pointless
Tsar Pointless's picture

Buy in May, buy every day.

Thu, 05/22/2014 - 18:13 | 4786622 Haager
Haager's picture

May is the new September. Especially on Tuesdays. Oh, forget about Tuesdays, make it weekdays, 3:30pm, some exceptions allowed.

Thu, 05/22/2014 - 16:32 | 4786169 HedgeAccordingly
HedgeAccordingly's picture

123

Thu, 05/22/2014 - 16:15 | 4786170 HedgeAccordingly
HedgeAccordingly's picture

perfect.. Maybe Putin will BTFD ? http://hedge.ly/1lX6bOh

Thu, 05/22/2014 - 16:15 | 4786171 Spungo
Spungo's picture

It's now called mark to algo accounting

Thu, 05/22/2014 - 16:16 | 4786174 LawsofPhysics
LawsofPhysics's picture

Jump on in, the water is fine...

Thu, 05/22/2014 - 17:09 | 4786373 new game
new game's picture

never mind the 16 foot croc...

Thu, 05/22/2014 - 16:16 | 4786175 The Axe
The Axe's picture

VXX is the most broken  POS  ever EVER.....should not even exist!

Thu, 05/22/2014 - 18:12 | 4786617 Luke 21
Luke 21's picture

Yeah, and why shouldn't etf companies make vix futures more accessible for the retail investor through etfs? Do you want the government to be protecting you from your own mistakes?

Thu, 05/22/2014 - 16:18 | 4786178 Make_Mine_A_Double
Make_Mine_A_Double's picture

No volume ergo no volatility. Makes perfect sense.

Being at an all time highs with leverage far beyond 07' up the ass levels with the real economy in a depression. Sorry, no recession - we never crawled out of the gutter from 2008.

Can the Magic Monkey and his organ grinders keep it levitated through November? Not at the fast forward speed we are seeing events happen in SE Asia, Eastern Europe, etc.

Thu, 05/22/2014 - 16:18 | 4786184 LawsofPhysics
LawsofPhysics's picture

Listen to us, "no volatility" after 48 hours and a several hundred point run up in the Dow,  fucking surreal.

Thu, 05/22/2014 - 16:17 | 4786183 Unknown Poster
Unknown Poster's picture

Is it even legal for VIX to do that at the end of the day?

Thu, 05/22/2014 - 16:19 | 4786186 FuzzyDunlop21
FuzzyDunlop21's picture

Tyler, the numbers in the volume chart, what does it mean? They are negative, is it difference in volume compared to average for that time of day or something?

Thu, 05/22/2014 - 16:21 | 4786196 gatorengineer
gatorengineer's picture

1900 tomorrow count on it....

Thu, 05/22/2014 - 16:36 | 4786197 Rainman
Rainman's picture

LOL ....Chainsaw Meg was brought in to unshit the bed at HP....so she'll can 11K more employees. Foarward !

Thu, 05/22/2014 - 16:23 | 4786205 buzzsaw99
buzzsaw99's picture

hey i'd jam the market higher too if my bonus was based upon notional gains

Thu, 05/22/2014 - 16:24 | 4786206 disabledvet
disabledvet's picture

"Looks like we'll have to kill more than Americans this time. Make me some money worthless New York maggots!"

Thu, 05/22/2014 - 17:00 | 4786341 theyellowking
theyellowking's picture

Can you please explain what 'illiquidity in VIX' is referring to?  Illiquidity in the SPX options that comprise the VIX? Looking at volumes in June monthly options I would say that illiquidity is currently of no issue. So I would geniunely love to know what you mean when you say that people 'sell the VIX' every day. 

 

Honestly, I would love a response from one of the TDs.

Thu, 05/22/2014 - 17:05 | 4786360 nosoeawe
nosoeawe's picture

now when is the the  lying, deceitful, supreme cunt and daughter of a whore going to have that stroke?

Thu, 05/22/2014 - 17:59 | 4786569 Lastline
Lastline's picture

It's open season on Weekly OTM puts on Fryday. The low Vix will make em dirt cheap. Be ready to press the Nuke button!

Thu, 05/22/2014 - 18:04 | 4786590 starman
starman's picture

The show must go on at any cost! To much at stake!

Thu, 05/22/2014 - 19:41 | 4786899 pebblewriter
pebblewriter's picture

So strange to see USDJPY sell off and VIX spike a little at the close.  Thought for sure they'd ramp it up to SPX 1900.  Thanks, Meg for the reminder of what closes were like back when the "market" didn't need quotation marks.

Anyone following the descending triangle on the Nikkei?  Past top tags cost eminis 56 points on average.  And, no POMO tomorrow...

http://pebblewriter.com/charts-im-watching-may-22-2014/

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