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Oilpocalypse Now Sends Small Caps To Worst Day In 3 Weeks
WTI Crude plunged another 3.75% to as low as $74.06 today - the lowest since Sept 2010 and dropping at the fastest rate of collapse since Lehman. Airlines popped and Energy stocks dropped 2.7% (now worst sector of the year) but Small Caps were the worst performing major index of the day (turning first around 1030ET and dropping most in over 3 weeks). The S&P tested back into the red for the week but was VWAP-rescued twice. AAPL once again bid saved the Nasdaq. Treasury yields slid lower all day (down 2-3bps across the complex) but remain up 4-5bps on the week. The USD weakened very marginally (still up 0.25% on the week) led by EUR strength. Gold and silver were flat but copper tumbled back below $300 - its lowest close in a month (near lowest close since Jul 2010). HY Credit diverged bearishly this afternoon as stocks ramped to VWAP. VIX rose for the 3rd day in a row, back over 14. Dow record close, Russell biggest drop in 3 weeks.
It was a weak day in stocks... so what do u think happened to trading volume... But of course, it wouldn't be the US equity market without a late-day panic buying algo surge to VWAP??!!
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But today was all about Oil...
WTI at over 4 year lows and falling at the fastest pace since Lehman...
And Lowest seasonal gas price since 2010...
The Energy sector is easily the worst performing sector of the year (and note EVERYTHING else ignoring the dip)
Don't forget - the collapse in oil prices is due to over-supply and NOT (repeat not) due to a collapse in global demand (which of course are merely 2 sides of the same coin)
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On the day, Small Caps underperformed...
And the S&P tested red for the week intrday... and bounced...
VIX has decoupled for 3 days and it appears stocks are catching down...
Treasuries rallied today but yields remain 4-5bps higher on the week...
HY credit decoupled from stocks yesterday and remained there...
FX markets were relatively quiet today with EUR strength the main driver (as it seems EURUSD and TSYs are flip-flopping each day)
Gold and Silver were relatively quiet today as Copper and Oil got plugged...
Close up, oil down from over $78 to just above $74...
and Copper smashed from over $3.05 to $2.98...
Charts: Bloomberg
Bonus Chart: It appears Airlines decided that once Bullard had spoken low oil prices can only mean good things for the global economic wealth of travelers... +45% in 3 weeks?
Bonus Bonus Chart: Just when you thought TWTR was fixed with Noto's dreams yesterday.. all the gains are eviscerated today...
Bonus Bonus Bonus Chart: Today marked the 20th day in a row that the S&P has closed above its 5-day moving average. MKM's Jonathan Krinsky notes this length of streak has only happened 3 other times in the past 20 years.. and each time the 5DMA was broken, it was followed by a sell off (2/14/96 -2.3% in 2 weeks, 7/2198 -14.66% in 6 weeks, 12/3/96 -2.97% in 2 weeks)
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Kinda of a disparity. NOticed that on the charts.
Gotta have a little chaos, that does not make sense, create fear and keep you on your toes.
Nothing major at all, for it is all an illusion. Ponzi at it's best.
exactly.
why not $200 oil?
I picked up some DIA puts today.
I want moar graphzzzz!
i love that monthly chart of oil. looks like a test of $60 should be coming. at that price, does WW3 finally begin?
SHTFPOCALYPSE coming in 3...2...1
LOL - calling the crash. Rookie move bud. I learned long ago the Central Banks have more money and influence than my sad ass expectations.
Chart porn Thursday is my favorite...
favorite what?
Crude needs to trade down near $71 paper bluebux to justify hammering Au & Ag in the process & put the squeeze on Putin.
YAWN!
looking forward to a 2-3% "correction" in two weeks /sarc
Given that not literally 'everything' is going up -- we will soon see some REAL turbulance as some of the traders like the London Whale will be hghly leveraged and on the WRONG side of some of these trades.
Of course, the immediate impact may be delayed as free central bank money flows in to ease the pain -- but the will be REAL losses when you are 50-to-1 on the wrong side of a trade.
maybe, maybe not on central banks riding to the rescue anytime soon
US - done for now (lack of supply / liquidity)
Japan - Kuroda's Halloween move came on 5 to 4 vote
ECB - do not see germany allowing draghi any large scale "print"
Bound to be a lot of wrongs at 50 to 1.
"Don't forget - the collapse in oil prices is due to over-supply and NOT (repeat not) due to a collapse in global demand"
sure sure ...
The oil, natural gas, gold, greenbacks, etc will flow to where the credit is being extended not destroyed.
Again...not trying to wave the flag here (save the flag?) but that would be at a minimum New York.
I mean forget merely oil refining the cost of refining anything is collapsing.
It is neither. It is obviously a move to weaken Russia, regardless of any other explanations out there, of which I must say the "Saudis are trying to destroy the U.S.'s shale industry" is the most idiotic.
The Saudis can never take on the U.S. They are uncle Sam's bitch. Ever heard of that massive U.S. base in the Kingdom?
The house of Saud is history the day the U.S. withdraws support.
There goes the inflation, which actually never came.
Where is the negative carry then? Or negative rates or negative yield?
Lot of things that look like plain old default to me not deflation.
"No dollars."
Move along...
Good ol' VWAP -- what would we do without it? Poetic justice, almost, that after thrashing about, stocks end at their volume-weighted average.
On the topic, it seems that Citibank employees have a different take on the VWAP acronym:
Vikram Was A Punk
Vikram Waylaid Any Profitability
Vikram, We’re All Pissed
Very well … Axe Pandit
Price of crude oil drops 25%, cost of gas drops 5%.
Not nearly enough to pay for Obamacare premiums or food inflation.
I just bought a gas-guzzling SUV and gas priced DROPPED! Imagine that. I guess I used up my luck for the year.
Now wait a minute. Hold on a second. I just read another article that we were having inflation right here on the same website. What's going on? Scared now.
Just click on some of the ads, you'll feel better in no time.
Oil prices are dropping because everyone is driving a Tesla...
Everyone who counts, anyway.