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Bond-ocalypse Sparks Stock Selling Scramble

Tyler Durden's picture




 

Given the illiqiuidty in markets and distance between fundamentals and perception, this seemed an appropriate analogy....

 

Stocks were exuberantly running stops early on as talking heads proclaimed the great rotation about to begin... Then once stops were run and bonds kept bleeding, stocks were shaken...

 

After Hours, yields kept pushing higher and stocks lower...

 

With the 30Y break through 3.00% triggered a leg lower to lows of the day

 

From the Friday payrolls print,

Who do we blame for this unacceptable selling in stocks... Simple! Gartman again who went "modestly long" this morning at the open...

 

Social media stocks remains beaten and YELP has given up some of its 'rumor' gains (after tagging unch from earnings)...

 

Shale stocks continue to suffer too...

 

Treasuries were sold across the entire complex with the long-end steepening dramatically...

 

This is the worst absolute yield move for 30Y bonds since July 2013... with the highest 30Y yield close since Nov 19th 2014 (and first close over 3% since Dec 2nd)

 

For the worst year-to-date performance since 2009...

 

But as soon as the bond pits closed (3pmET) stocks u-turned...

 

and v-shape-recvored desprate to get back to VWAP... but failed

 

The dollar was oddly quiet after Asia closed - ending with a small 0.2% gain (with cable strength the biggest deal)...

 

As stocks ran stops at the open so gold and silver were monkeyhammered lower leaving  all commodities lower - even copper after China's QE...

 

Crude was an EKG again...

 

And Silver was insane...

 

Who could have guessed that higher interest rates would stymie stocks exuberance when it's all driven by easy-money-financed share buybacks?

Charts: Bloomberg

 

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Mon, 05/11/2015 - 16:13 | 6082288 The Bell Rang
The Bell Rang's picture

I KEEP ON SCREAMING, could be the C wave down, or the start of THE BIG ONE ESTER............

Mon, 05/11/2015 - 16:18 | 6082312 NotApplicable
NotApplicable's picture

In other news, the next "debt-ceiling" "debate" is going to be blamed for the upcoming bloodbath.

Mon, 05/11/2015 - 16:26 | 6082350 Hype Alert
Hype Alert's picture

In other other news, the MACD on the VIX has been negative since Feb 9 with a brief touch at 0 on 5/7.  Hammer time.

Mon, 05/11/2015 - 16:26 | 6082352 ThaBigPerm
ThaBigPerm's picture

Quick - somebody close bond trading temporarily for unscheduled scheduled maintenance...

Mon, 05/11/2015 - 17:31 | 6082596 rccalhoun
rccalhoun's picture

traders are selling on the bet that the fed will never raise. thing is...once inflation gets rolling...its very hard to stop

Mon, 05/11/2015 - 16:32 | 6082380 BlueStreet
BlueStreet's picture

Don't worry bulls, Gartman will go "pleasantly neutral" in the morning. 

Mon, 05/11/2015 - 18:12 | 6082761 aurum4040
aurum4040's picture

The great 'rotation' being the fed, 'Belgium' and 'SNB' rotating from buying qe infinity bonds and DOW 36k stocks into....? A financial black hole perhaps, I dunno, maybe corporate buy backs are now rotating at ludicrous speed into debt to buy the highest pe's on record, akin to negative interest rates on roids while real wages continue to stagnate leaving only the 1% club the only group to buy the crap they sell. Can I please, please  jump on the same side of the ship as everyone else?  I don't wanna miss anything..... /sarc

Mon, 05/11/2015 - 17:06 | 6082503 Butterflying
Butterflying's picture

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... www.jobs-review.com

Mon, 05/11/2015 - 18:00 | 6082717 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Fuck off

Mon, 05/11/2015 - 16:14 | 6082290 philosophers bone
philosophers bone's picture

Just got Chart-nado'd by the Bond-ocalypse.

Mon, 05/11/2015 - 16:21 | 6082329 Bell's 2 hearted
Bell's 2 hearted's picture

as a bond bull: Bring It!

 

the economy can not handle higher rates

 

anytime since the recession "ended" when yields got frisky ... they ultimately crashed to new lows

 

the answer to high interest rates?

 

even higher rates (till economy cries "no mas")

Mon, 05/11/2015 - 16:14 | 6082291 Bell's 2 hearted
Bell's 2 hearted's picture

april retail sales should be ugly

 

thomson reuters had expected comparable store sales poor ... and literally everyone STILL missed (reuters had april comparable sales negative - year over year -  for 1st time since 2009)

 

just waiting for apparel big boy (GAP) to report today ... expected -7.2%

 

actual ... -12%

 

OUCH

 

http://www.gapinc.com/content/gapinc/html/media/pressrelease/2015/med_pr...

Mon, 05/11/2015 - 16:18 | 6082310 i_call_you_my_base
i_call_you_my_base's picture

Temperatures were moderate, meaning that there was no need for new clothing. People already had the appropriate clothing. If temperatures swung more wildly, different clothing would be required.

Mon, 05/11/2015 - 16:14 | 6082293 i_call_you_my_base
i_call_you_my_base's picture

"NEW YORK FED'S DEBT CEILING CONTINGENCY PLANS INCLUDE USING OPEN MARKET OPERATIONS TO SMOOTH MARKET VOLATILITY"

I'm curious under which "mandate" this falls.

Mon, 05/11/2015 - 16:17 | 6082304 RobD
RobD's picture

Price stability? Otherwise I got nothin!

Mon, 05/11/2015 - 17:34 | 6082615 max2205
max2205's picture

TLT  lost 9  Months of interest today and down 14% from the highs or 7 years worth of interest 

 

Carry on stay calm

Mon, 05/11/2015 - 16:17 | 6082308 El Vaquero
El Vaquero's picture

Their mandate to keep their banker buddies in business so that they can suck the rest of us dry.

Mon, 05/11/2015 - 16:20 | 6082320 i_call_you_my_base
i_call_you_my_base's picture

Winner!

Also known as "the third leg" of the fed mandate.

Mon, 05/11/2015 - 16:16 | 6082299 disabledvet
disabledvet's picture

Bleeding all over the place right now.

I am surprised treasuries getting hammered isn't bullish since everyone is short. And still there is no recovery too.

"Let it Bleed" is the Lead...

Mon, 05/11/2015 - 17:30 | 6082605 Loucleve
Loucleve's picture

the short interest on TLT is down from > 100% to about 25%.

Mon, 05/11/2015 - 16:19 | 6082309 nopalito
Mon, 05/11/2015 - 16:20 | 6082319 Keltner Channel Surf
Keltner Channel Surf's picture

“Spoofin’”    from “Groovin’” by The Young Rascals

Spoofin’ on a warm May afternoon
Really couldn’t get to my desk too soon
I can’t imagine a way to trade that’s better
Ensure my Ask and their Bid never come together
While far below I’ll scoop up shares – god, I’m so clever

Spoofin’, just like a kid playin’ peek-a-boo
Doin’ anything I’d like to do
There’re always lots of pings so they can see
My big fat orders resting lusciously
No happy buyers will my fake shares ever meet

Just spoofin’ on a thin tape afternoon
Really, my games can’t lower price too soon (No, no, no)
(Aah, aah, aaaah)

We’ll keep on fucking markets up this way
With regulators yet to send out RFAs
I feel more omnipotent day by day
This is my legacy:  spamming relentlessly

Spoofin’ on a mid-May afternoon
Really couldn’t find more prey too soon (No, no, no)
Spoofin’, (Aah, aah, aaaah)

Mon, 05/11/2015 - 16:23 | 6082324 FreeShitter
FreeShitter's picture

This sideways shitshow will continue on till yeller injects the addicted patient with qe4 or we collapse as lot have said by sept-oct.

Mon, 05/11/2015 - 16:29 | 6082368 SheepDog-One
SheepDog-One's picture

Gotta keep the music playing till the stern goes under.

Mon, 05/11/2015 - 18:32 | 6082826 acetinker
acetinker's picture

Seems odd that the Troika is pretending to play hardball with Tsipras & Co. when they know damn good and well that if Greece defaults it'll likely be the strand that unwinds the entire hairball.

Mon, 05/11/2015 - 16:45 | 6082428 new game
new game's picture

and why can't the 30 or ten be manipulated? am i missing something?

Mon, 05/11/2015 - 17:31 | 6082611 Loucleve
Loucleve's picture

it is being manipulated.  DOWN.

if algos see the yield curve inverting, that means recession (if I am not mistaken).

sheeple must be driven from bawnds into stawcks, as Goldman needs more high quality collateral (treasuries) to write more derivitives.

simple, really.

Mon, 05/11/2015 - 17:10 | 6082522 Keltner Channel Surf
Keltner Channel Surf's picture

Interesting Bloomberg story about huge long VIX trade this afternnon, I assume the Tylers might be working on a related post:

http://www.bloomberg.com/news/articles/2015-05-11/vix-trades-flood-marke...

Mon, 05/11/2015 - 17:29 | 6082601 Loucleve
Loucleve's picture

At around 1:45 pm, the VIX quote at BigCharts was still from 12:45 pm.

I thought it had broken (closed) or something.  here is the answer I guess.

Mon, 05/11/2015 - 20:50 | 6083230 walküre
walküre's picture

Biggest volume trade ever and it's related to the vix? Color me stupid but that's a broad sell signal if I ever saw one.

Short term trade or are the players gettin' ready for the long haul down?

Tue, 05/12/2015 - 01:43 | 6083853 JoWazzoo
JoWazzoo's picture

June & July VIX calls.  Article here somewhere.  $ 100 Million worth.

Mon, 05/11/2015 - 17:38 | 6082627 Omega_Man
Omega_Man's picture

when is the movie Bondo-packo-lips  coming out?

Mon, 05/11/2015 - 19:31 | 6082988 Soul Glow
Soul Glow's picture

Smooth market volitilty like Blankfein's ballsac.

Mon, 05/11/2015 - 21:06 | 6083295 fremannx
fremannx's picture

There may be a little upside left in the Dow and the S&P 500. But the obvious Dow Theory non-confirmation between the Industrials and the Transports means the markets are on the edge of collapse.

 

 http://www.globaldeflationnews.com/dow-jones-industrial-averageelliott-w...

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