Russell 2000 Gloom, Camera-on-a-Stick Doom, Bond Yields Boom

Tyler Durden's picture


For the 5th month in a row, US treasury bonds started with a 2-day sell-off as yields rose arond 6bps today (back to unch from FOMC). Gold, silver, and copper all gained notably (despite a knee-jerk lower on the ADP data). The US Dollar jumped instantly on the ADP print then flatlined for the rest of the day but USDJPY pushed higher. However, stocks chose to ignore their ubiquitous drivers - VIX was slammed lower (stocks ignored it) and USDJPY surged (stocks ignored it) as early weakness in Trannies was overtaken by Russell 2000 losses as the S&P and Dow flatlined in a very narrow range. Shortly after the US markets opened, credit markets diverged notably from equity markets (but caught up into the close). VIX closed lower. The Dow had its narrowest range since Dec - funny what happens when there's no $190 billion repo injection, eh? The S&P and Dow closed marginally green at new record highs.

Perhaps Art Cashin summed it up best - good news is indeed bad news...

"I find it fascinating we're all sitting here worried about prosperity breaking out."

Early weakness in Trannies; extended weakness in Russell - S&P and Dow clung to record highs..


Which left the Russell almost unch for the month...


10Y rates rose back to FOMC levels (with S&P +2% still) as USDJPY also surged...


So stocks ignored USDJPY and also ignored VIX best efforts...


Credit and stocks diverged at the US open but credit rallied back towards the close...


The Dow had its narrowest range since Dec - has tended to signal a short-term turn...


10Y rates are back to breakeven from the FOMC (and 30Y above)


FX Markets were quiet with the main action at the ADP print (USD bid)...


Copper surged on the day as the CCFD unwinds continue to squeeze shorts and unwind hedges. Gold and silver also jumped off the knee-jerk snap lower from ADP...


Gold was slammed on the ADP print and again into the European close...


All we have to say is WWJSD?


Charts: Bloomberg

Bonus Chart: Camera-on-a-stick tumbles 17% from its highs...

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Wed, 07/02/2014 - 16:06 | 4919019 NOTaREALmerican
NOTaREALmerican's picture

If it goes up too high it'll poke a hole in the bottom of the Hindenburg Omen!  

Wed, 07/02/2014 - 16:07 | 4919023 Say What Again
Say What Again's picture

There was something funny about the close today.

Most of the day was as boring as it can get, low volume, etc., but all of the volatility indexes were creeping higher.  Then in the last minute or so, we get massively high readings in all of the TICK indexes. 


The market is such a value, that everyone wants to get in at this level?

Wed, 07/02/2014 - 16:14 | 4919026 hedgeless_horseman
hedgeless_horseman's picture




The market is such a value, that everyone wants to get in at this level?

It should be obvious.  Someone leaked some bad news.  Stock indices pop like that, it could be something really bad, like plague, war, pestilence.  You know, the traditional drivers of stock prices.  Maybe a deflationary monster has left Japan and is headed across the Pacific to attack Los Angeles.

Wed, 07/02/2014 - 16:19 | 4919049 Say What Again
Say What Again's picture

I think J Siegel might be right about the DOW, but not because the economy is that good.  ALL of the central bankers are pulling out the stops and printing even moar than before.

Also, I keep track of the various volatility ratios, such as VIN/VIF, VIX/VXV, etc. and ALL of them were pointing at a lower close.  Someone is working real hard to prop up this POS!

Wed, 07/02/2014 - 16:41 | 4919126 Keltner Channel Surf
Keltner Channel Surf's picture

Regarding volatility, while the Russell of late has been closely tracking inversely with its vol measure, today the R2K traced a relentless, shallow-sloped diagonal descent (the work of a periodic sawtooth algo visible on the 2-min chart), while the RVX traced a “U” pattern, selling off before rising steadily after 1:30.  Wonder if someone was shorting Russell vol in the morning (as opposed to unwinding a hedge) perhaps anticipating a breakout above the March highs (?)

Wed, 07/02/2014 - 19:57 | 4919677 lotsoffun
lotsoffun's picture

jamie dimon has 90% chance.  there - i did it.  i got ugly.  good thing he's smarter and richer then me.  i wish him and his family the best, and maybe - they will wish that upon the rest of us someday also.


Wed, 07/02/2014 - 16:11 | 4919041 buzzsaw99
buzzsaw99's picture

Bang Dae-Ho (bang the close)

Wed, 07/02/2014 - 16:13 | 4919045 frankTHE COIN
frankTHE COIN's picture

I saw it also. Rightly or wrongly somebody acted like they knew something and expected a burst of Violence tomorrow.

Wed, 07/02/2014 - 16:32 | 4919098 Godisanhftbot
Godisanhftbot's picture

 Tim sykes issued a buy signal based on his years of pimping dvd's

Wed, 07/02/2014 - 16:08 | 4919028 Hindenburg...Oh Man
Hindenburg...Oh Man's picture


Wed, 07/02/2014 - 16:08 | 4919024 Greek_lab_rat
Greek_lab_rat's picture

Get zee gold

Wed, 07/02/2014 - 16:10 | 4919038 buzzsaw99
buzzsaw99's picture

siegel = jalapeno on a schtick

Wed, 07/02/2014 - 16:23 | 4919074 Rainman
Rainman's picture

Dow 20k means I only need to change out one digit on my crusty 4 year old hat . I'll have Mrs. Rainman get right on it.

Wed, 07/02/2014 - 16:29 | 4919094 Godisanhftbot
Godisanhftbot's picture

 has anyone here made two cents from any of the advice proffered, offered, excreted?



Wed, 07/02/2014 - 16:32 | 4919097 i_call_you_my_base
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Please point out the advice offered in this article.

Wed, 07/02/2014 - 16:46 | 4919142 RhoneGSM
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Want advice? Subscribe to a newsletter. ZH is for gathering information. You decide what if anything to do with it.

Wed, 07/02/2014 - 16:50 | 4919149 Rainman
Rainman's picture

" Now is a great time to buy stawks " ...Obomba

            March 2009

Wed, 07/02/2014 - 17:19 | 4919241 max2205
max2205's picture

That's what made me not buy then....

Wed, 07/02/2014 - 17:57 | 4919361 disabledvet
disabledvet's picture

Too bad for you then.

Gold had a beautiful double top and then got totally incinerated. Something about "making the cabbage but not paying any taxes on it" though seems to be a problem. Especially now that it's game time on World War Z.

How did Ozzie Osborne's opening to Crazy Train go?

"ALL ABOARD!" I think.

Wed, 07/02/2014 - 19:53 | 4919665 lotsoffun
lotsoffun's picture

what was that again?  'you can remain irrational longer then the FED can remain insolvent?'  something like that, help me.


Wed, 07/02/2014 - 17:23 | 4919252 SkySavage
SkySavage's picture

I remember that do we wait for the top call from Barry as well?

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