Russell Rebounds On Late-Day Buying Panic But Rest Of Market Reluctant

Tyler Durden's picture

Treasuries oscillated in a 3-4bps range all day to end flatter with 30Y -1.5bps and 2Y +1.5bps as stocks flip-flopped around like Charlie Sheen in a Phat Phong whorehouse. Trannies resumed their post-Iraq drop (-0.3% today) but high-beta honeys sent Russell 2000 up 0.4% with the S&P and Dow unchish. Stocks recoupled with bonds after 2 attempts to spark new all time higherer highs. Ahead of this week's FOMC, the USD weakened as EUR gained and oil, gold, and silver all slipped in a highly correlated manner. VIX rose 0.4 vols to 12.6 - notably decoupling from the S&P as Iraq/Fed uncertainty prompted some hedging. The now ubiquitous buying panic took hold at 330ET and Russell closed at highs of the day.


Take you pick - Great Day; Terrible Day; or Flat


AUDJPY was in charge the moment POMO ended...


VIX decoupled as it seems Iraq or Fed uncertainty prompted some hedging


Stocks kept ramping away from bond reality and falling back...


But Treasuries flattened with the long-end rallying modestly...


Commodities slipped all day - in a highly odd correlated manner...


Because nothing says buy small cap stocks like growth estimates being slashed, oil prices surging (and stymying growth), and a Fed day this week (after they already noted stretched valuation in small caps)

For a sense of just how systemically correlated the stock market has become, Capital Context's SPY Arb model (which trades SPY ETF against a weighted basket of Vol (VXX), Credit (HYG) and Bonds (TLT)) saw incredibly tight trading today...

It's all one trade!

Charts: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
So Close's picture

What is the formula to figure FED days into P/E?

stocktivity's picture

Does anything really matter? There are no more market slumps. It's all Bullshit!!!

NDXTrader's picture

An asteroid could hit the Earth and end all life or Yellen could fly a C-130 around dropping cash on people and the effect would be the same - flat through Thursday. Futures expiry this week is far more important to TPTB than anything else. Derivatives drive the stock market, not the other way around

MFL8240's picture

Another day at the circus!  Russell stocks are the riskiest stocks out there and Gold and Silver the most underpriced.  Of course this is all about whether or not the troll will fart during the FOMC charade this week.  Laughable yet very sickening!

NDXTrader's picture

It must feel good to trade at a central bank. If a position turns against you, you hit a button to create more fiat and replenish your account and then just blow through anyone short to create your own momentum. That would be fun

Kprime's picture

it's like play money poker, you can go all in, pre flop, with an unsuited 2,7 and still come out ahead.

jubber's picture

Total utter humiliation in Iraq, $Trillions pissed away, on the verge a possible regional middle east war , every world Index down, then a massive US futures ramp...Peak Insanity

NDXTrader's picture

Well, who wouldn't want to be levered long overnight? Not much going on in the world

Rainman's picture

only thing going on tomorrow is tuesday...yipppee !

AccreditedEYE's picture

I have ZERO doubt they will break this bitch up and out on the Fed news and we'll see another 8-10% higher in equities from here till September. Count on it

NDXTrader's picture

You might be shooting low. They WILL NOT let the market go down while they are tapering as that would hurt "confidence". Looks like the Nasdaq is making a nice cup and handle - breakout to target the 2000 bubble high

techstrategy's picture

The entire market is now playing the traditional MOMO/float scam games...  sell vol, pump the bid on declining volume, unload the net via calls...  works until it doesn't then it crashes hard.  Exit to cash and gold.  Let those responsible hold all the risk.