Bondmageddon Sparks Crude Carnage & Biggest Stock Slump In 7 Months

Tyler Durden's picture

Oops...Compared to recent lack of volatility, today was indeed a bloodbath and the week was the worst week for stocks in 7 months...


Dovish Rosengren's confidently hawkish comments seemed to spark this, sending rate hike odds notably higher (and not sparking confidence in the market)...


And rate hike odds are rising as macro data dumps...


But blame Draghi for starting it...


Before today's tumult, realized volatility had collapse to a 45 year low...Volatility has rarely been lower. We can argue about the cause but the facts are clear: S&P 500 one-month trailing realized volatility has dropped to 4.8, its lowest level since 1971.


Some context for today's move - Equity market at post-Brexit cliff-edge...


Stocks catching down to fundamentals?


Today's moves were impressive... Dow -392 points!! *S&P 500 SINKS 2.4% IN BIGGEST SELLOFF SINCE JUNE 24, *DOW AVERAGE LOSES 392 POINTS IN BIGGEST DECLINE SINCE JUNE 24

Today's closes were very technical...

  • The Dow closed at its 100-day moving average 18,085, biggest weekly drop since the first week of January
  • S&P biggest weekly drop since early Feb, closing just above 100-day moving-average at 2120.
  • Russell 2000 biggest weekly drop since Feb, closing at 50-day moving average at 1217.
  • Nasdaq biggest drop since April, closing below its 50-day moving average at 5134.
  • Trannies closed below 50-day moving-average at 7841.

On the week it was ugly, worst week since February...


The S&P closed below its 2015 highs...


"Most Shorted" stocks plunged... (biggest drop since Brexit)


On the day, homebuilders lost the most ground (worst day in 3 years), but this was the biggest drop in financials since Brexit..


Financials and the yield curve have begun to converge...


VIX soared...


Jumping most since Brexit...surging above its 200-day moving-average...


Today was the 11th biggest jump in VIX in history... (h/t @Stalingrad_Poor)


Notably most 'risk-parity' indices are end-of-day only, we found one fund in Canada that trades - The Horizons Global Risk Parity ETF - and today was ugly (as we expected)...Bonds & Stocks slammed on the week


Total bloodbath in bondland today with the long-end getting slammed... Worst 2 days for 30Y in a year - few things to consider - major issuance demands rate-locks, Japanese reverse twist chatter contagion, ECB losing faith at long-end, and finally Congress signed the 9/11 bill today allowing families to sue Saudi Arabia who have threatened to sell their Treasuries...

The entire curve is back to Brexit level highs in yields.

2s30s jumped around 12bps on the week (with a bear steepening) - the biggest weekly steepening since Jan 2013


Notably USTreasuries and Bunds tracked each other almost perfectly this week (as JGBs and Bunds managed to get back to 0% yield)...


The Dollar Index ended the week lower, despite a notable rise in the last two days (led by Cable and commodity currency weakness)... Yen strengthened on the week.


Dollar strength slammed into commodities with crude giving back yesterday's inventory gains and silver rolling over notably... (gold and silver closed below their 50DMAs)


Today's crude retracement of yesterday's inventory drawdown...


Charts: Bloomberg

Bonus Chart: A gentle reminder of how well things are going in the 'economy'


Bonus Bonus Chart: Still over 200 points to go in the S&P before fair value to The Fed Balance Sheet


Bonus Bonus Bonus Chart: Stocks year-to-date...

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Kaiser Sousa's picture


shocking no rescue mission today by the Fed & ESF… and i was gonna wait til next month to get some more physical REAL MONEY… but oh no - the just keep the phony paper price discounts comin’….. thanks you sociopath asshole banker pieces of shit… to all my comrades in arms here have a good weekend as this phony economy speeds towards total collapse…


Looney's picture


The Wall Street has perfected this scam – every time there’s a tiniest risk of the Fed raising rates, they drop a few percent and… Yellen poops her Granny Panties and the rates stay the same.

This time, it might be different, though. There’s a new “data point” in their data-driven-drivel, Donald Trump.   ;-)


Kaiser Sousa's picture

the New Dork "trade"....



froze25's picture

I nailed it yesterday with my call to short oil and short it hard.

Kaiser Sousa's picture


now here's some more debt coupon dollars 4 u...

oh wait - theyre worthless!

BaBaBouy's picture

Bullish Day For Hellery ...

knukles's picture

Lunatics have taken over the asylum

Hopeless for Change's picture

Could we see a few more charts please?

bleu's picture

America's days are numbered.

jeff montanye's picture

off topic but the lead hillary and her heart story is essentially inoperable.  for the last five hours at least all i get upon bringing it up is about four seconds of operation before the spinning beach ball takes over.  what gives tylers??  is this you or them or somehow me?  i hope it's them.  getting under someone's skin who you really don't like is a little fun.

and i was a democrat since mcgovern until obama.

Paul Kersey's picture

A falling stock market is not Hillary's friend, because another four more years of Obama is already not an easy sell (and that's if the market is up).

Tarzan's picture

They know it will fall, it's baked in, the timing is another matter.  According to Mark Cuban, it comes election day, it's Trumps fault.

You can smell their desperation, and see it in the "market".  What a fucking mockery, one fed dunce speaks, and the whole thing trembles like a house of cards over a fracking well.

If your still "playing the market" with anything more then mad money, If you are still trying to catch that falling knife, your ignorant to the core! 

You go pile into those oil shorts, let them rape you.  I'll go buy more "Junk"! 

When the dollar dives, oil will rise through the roof.  The dollar will not retreat slowly, it will be propped up, until it suddenly dies. It's no differant then a Corporation rated AAA until the day it dies, or a bank who operates seemingly normaly, until the minute it closes it's door.

In that day, when such great percieved wealth vanishes, Powerful grown men will weep in the streets, the whole earth will grown!

Nobody For President's picture

Fuck weeping in the streets.

JUMP you fuckers!

Solosides's picture



But as long you can drink fake beer ether-injected-swill, and look at plastic tits on your I-phone, this must be the greatest thing anyone in the world has ever had.

Kaiser Sousa's picture

great country aint it...

fightin' for our freedoms and all...

now, sing the anthem.

Never One Roach's picture

Hearts 'n Minds......


It's a new rock group.

jeff montanye's picture

re anthem, as red traphagen said of a singing stadium in the southpaw (best baseball book written): ain't none of 'em free, ain't two hundred of 'em brave.

Cui Bono's picture

Kaiser, I vote for this one.....

Maggots at the Party Combichrist

hxc's picture

Combichrist is legit. Surprised others here know this

Kaiser Sousa's picture

they need more cowbell...

bamawatson's picture

what you yellen bout, willis ?

I am a Man I am Forty's picture

i mean it's so fucking obvious isn't it

I am a Man I am Forty's picture

i mean it's so fucking obvious isn't it

Clock Crasher's picture

No Rescue coming.  Doctors orders.

monk27's picture

PPT must have taken an early weekend... Is Kevin Henry still with the FED ? If so, this is a sure sign he's neglecting his job...

pkea's picture

who are they fooling with the " fed fears" ...please,,,the saudis are just throwing a fit and demanding a veto from Obama( coming shortly next wekk or so) and just started selling their treasuries and USD reserves as an intimidation in response to the 9/11 bill passage... and dont hope for any physical money solution.. they will pass $100 ban in a few months by december for sure...


CPR Steps_30 pumps_2 breaths_then repeat's picture

Yikes, the market can be a bitch! I got totally raped, mutilated, and eaten today… Jeffrey Dahmer style! I just saw red splatters flying everywhere! 

Clock Crasher's picture

I like the 60 minute chart with pre/post market data.

Candle stick formation as follows; Red Red Red Red Red Red Red Red Red

jeff montanye's picture

i have been dating sds since '11.  been a rocky road, mostly downhill, but she's starting to look better this summer.

she has a sister srs if you're interested.

Hohum's picture

It felt like Christmas!  Or the secular equivalent.

Clock Crasher's picture

Risk can not be destroyed, it can only be shifted through time and redistributed in form.

Volatility and the Allegory of the Prisoner's Dilemma

-Artemis Capital

Follow through selling after market by the way

Keltner Channel Surf's picture

“We Broke the Bollinger Band”     from   “We’re an American Band”     by Grand Funk Railroad

Stuck in a range for 40 days
Neither longs nor shorts have really gotten paid
Sweet, sweet Janet doin' her act
She’s been the whole show and that’s a natural fact

Up all night with a trading king
I got to tell you, put spreads are his thing
Spoos and Diamonds ain’t acting right
The longs may get their comeuppance tonight

We broke the Bollinger band, we broke the Bollinger Band
Central bankers are clowns, they’ll help us take this thing down
We broke the Bollinger Band

Who is that big cheese from Omaha?
He’s hatin’ on bears every CNBC show
The host, she’s kneeling before him like he’s always right
But the price discovery, it’s been outta sight

Now these fine bears, they had a plan
They were out to bleed the long weak hands
They said, "Come on dudes!   Let's get it on! "
And we proceeded to tear ‘Yellen Hotel’ down

We broke the Bollinger Band!   We broke …

Citizen_x's picture


Great tune and very clever musings.

There might be some damage to the

bulls.  Monday should be interesting.

Keltner Channel Surf's picture

While both IWM & Nazzy-DAQ ended at a typical bounce point (intersection of Daily 2.0 Keltner & 50 DMA), grandpa SPY crashed below these levels and could, paradoxically, be the one to lead us further adrift, with the 100 DMA, just a bit below, needing to serve as "support" going into OPEX. 

Based on past scenarios, you wouldn't want to bet on pre-OPEX, pre-live-meeting-FOMC SPY smashing past the 100, but as always, trade based on post-open short-term quant-fueled technicals.  At least the coma appears to be over.

Keltner Channel Surf's picture

Thank you, sir, hope you caught some of the crazy currency action as of late.

Yen Cross's picture

  I shorted aud/jpy last night.  Covered just before the N.Y. close.

  Keep kicking those most shorted asses over at RUT. ;-)

Keltner Channel Surf's picture

RUT algos have nothing against selling, but when they see middling summer volume for MONTHS and buy limit orders from hedge fund 3Q 'performance painters' lurking just below weekly lows, it's easier to goose weaker shorts that believe a large position with a tight stop is equivalent to a smaller position with a wider stop than assume the risk of bearish vacation-time positions. 

As soon as volume is respectable, their sense of value, fair play and good citizenship returns, as you can see :)

Mr. Universe's picture

Finally, a song with enough cowbell.

Clock Crasher's picture

<< Long Volatility from here on out

<< Long equities and new all time highs from here on out

Rainman's picture

Bonds and stawks crushed big smells like taper tantrum, circa 2013

GunnerySgtHartman's picture

No rate hikes ... just watch ...