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Bond Yields Collapse To 11-Month Lows; Trannies Soar To Record High

Tyler Durden's picture


Wednesday is not Tuesday (except for Trannies). Some early weakness in stocks was bid mindlessly back to its highs even as 10Y bond yields kept tumbling to 11-month lows and oil and copper rolled over. VIX ended the day higher (again) ignoring the exuberance in the light volume equity market. 10Y yields dropped to 2.43% - its best day in 5 months (breaking last October's key support). The yield curve flattened dramatically with 2s30s at its tightest in a year. The USD was bid (led by GBP weakness) buy JPY's volatility is what ran the stock show today. Gold and silver fell further as did WTI crude (back under $103). The S&P 500 is now around 60 points rich to 10Y bond yields (and the world is still short bonds); credit spreads are well off their tights and VIX isn't falling; breadth is weakening and so is volume... but apart from that... BTFATH. A late-day selling frenzy took the shine off the CNBC headlines with stocks closing red.


10Y at 11-month low yields... fuck yeah America...


Trannies don't care... but the last few minutes saw selling volumes pick up notably...


as USDJPY ran the show...until stocks decided to catch down to EURJPY


And stocks are entirely decoupled from bonds


Utes remain the year's big winner and builders not so much...


It's been quite a week for the entire bond complex...aside from 2Y!! which slammed the yield curve to its flattest in a year


VIX remains stubbornly high relative to equity exuberance as it seems some protection is warranted with stocks so decoupled...


Commodities were ugly...


And suddenly everyone excited about Biotechs and MoMo stocks.. here's some context...


Charts: Bloomberg

Bonus Chart: Wee Divergence...



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Wed, 05/28/2014 - 16:08 | 4802888 stant
stant's picture

Bonds are saying there a kaboom out there somewhere. But which kind? Economic or war

Wed, 05/28/2014 - 16:16 | 4802895 Say What Again
Say What Again's picture

Today was just a minor sell-off.  We will continue the ramp-a-thon tomorrow, because all the central bankstas are still printing to cover their losses (i.e., debt)


The rally in the TRAN index is strange.  Everyone here keeps saying the the global economy is not really doing so well.  If that's the case, then why are the transportation stock doing so well?

Wed, 05/28/2014 - 16:27 | 4802938 LawsofPhysics
LawsofPhysics's picture

Correct, with infinite fiat available to buy everything, ultimately the price of everything will keep going up.


Wed, 05/28/2014 - 16:38 | 4802957 Winston Churchill
Winston Churchill's picture

Symptomatic of severe Kono fever, brought to the US by Zimbabwean refugees.

Always fatal, it presents itself by inflating assets until they are  worthless,misallocation

of the extremities, and gaping running  sores known as Krugman's.


Wed, 05/28/2014 - 16:51 | 4802998 Say What Again
Say What Again's picture

How poetic.

You should be writing old-world narratives.

Wed, 05/28/2014 - 16:33 | 4802949 ACP
ACP's picture

TRAN is probably going up a lot because the fundamental investors are short, and thus getting burned by the Fed-fueled bots.

Anyways, a late selloff, in this abnormal backasswards bullshit market, always seems to presage a hard core SPY bang-up the next day. I guess we'll see if the SPX hits 1924 tomorrow.

Wed, 05/28/2014 - 16:30 | 4802942 Rainman
Rainman's picture

I'll figure it all out by the end of my next martini.

Wed, 05/28/2014 - 16:52 | 4803003 infinity8
infinity8's picture

And, in the morning, will we all be confused again?

Cheers anyway!


Wed, 05/28/2014 - 16:10 | 4802892 Chupacabra-322
Chupacabra-322's picture

"Currency wars, trade wars, world wars."

-Gerald Celente.

Wed, 05/28/2014 - 16:12 | 4802897 i_call_you_my_base
i_call_you_my_base's picture

Looking forward to Japan retail sales this evening. Should be funny.

Wed, 05/28/2014 - 16:30 | 4802944 NDXTrader
NDXTrader's picture

Yep, Japanese data is always a can't lose proposition - if better than expected: "See, it's working"...if worse than expected: "It's not working so they HAVE to do more of it"

Wed, 05/28/2014 - 16:17 | 4802910 jubber
jubber's picture

All US futures already back bright green

Wed, 05/28/2014 - 16:19 | 4802914 ebworthen
ebworthen's picture

Churn and rotation; making butter from FED milk.

Wed, 05/28/2014 - 16:28 | 4802939 machineh
machineh's picture

If GDP prints below zero tomorrow, then you'll know: SOMEBODY LEAKED!

Wed, 05/28/2014 - 18:12 | 4803266 CrashisOptimistic
CrashisOptimistic's picture

Tommorrow is the GDP rev 1 of Q1.  The consensus has been managed to be -0.5.

-0.2 will be a celebration moment for CNBC.

Wed, 05/28/2014 - 16:31 | 4802945 Boston
Boston's picture

10Y at 11-month low yields...


What's worse is the technical damage that just occurred today. Look at Tyler's chart carefully and you'll see that all the lows (in yield) over the last 11 months have been taken out. This was a key level of support, support that had held every time....until today.

Sure, yields could bounce a bit over the next few days, or even weeks, but at this point---technically---there's little support until the 2% area for the 10y.

Wed, 05/28/2014 - 16:32 | 4802948 orangegeek
orangegeek's picture

Negative GDP for Q1 reporting tomorrow, but 3.7% forecast for Q2.


Ponzi scheme is running out of rope/time.

Wed, 05/28/2014 - 16:46 | 4802982 Winston Churchill
Winston Churchill's picture

Finally so bad they can't hide it anymore even with the bogus deflator.

QE, or no QE, somebody is going to run for the exits.

Four weeks after the Bilderburg meet sound about right, for cover and all.

Wed, 05/28/2014 - 16:42 | 4802963 disabledvet
disabledvet's picture

"I see a red door and I want to paint to paint it black. No colors anymore I want them to turn black...

Wed, 05/28/2014 - 17:13 | 4803062 disabledvet
disabledvet's picture


"Prepared to be gang raped by a herd of mules."

Wed, 05/28/2014 - 17:14 | 4803063 Mitch Comestein
Mitch Comestein's picture

The ten year yield chart looks like the copper chart.  Maybe that means something.

Wed, 05/28/2014 - 17:44 | 4803160 Spungo
Spungo's picture

A whole lot of gold and silver miners have dipped below the 50 day, 1 standard deviation bollinger band. If you have some money to gamble, try buying this dip and put the sell price slightly higher. You might make a quick 10%.

Wed, 05/28/2014 - 19:37 | 4803541 Millivanilli
Millivanilli's picture

Profit margins are slim to none.   Buy physical and wait.

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