Fed Hike Sparks Biggest Selloff Since Election

Tyler Durden's picture

This seemed an appropriate place to start... Make sense right?


Which made us think this...


So, the market's reaction post-Yellen... (banks were bid, puked, and then ramped)


Nasdaq almost made it back to unchanged on the ramp...Small Caps and Trannies slammed hardest but this was the market's worst day since October 11th.


Small Caps and Trannies have been notably ugly the last few days...


Dow 20,000 was on the cards - everyone expected it... but we stalled 35 points shy of it, before tumbling...but then there was the panic bid on JPY carry which ultimately failed...


Seems like a big Yen-arb correlation catch up...


Also, as we noted earlier, VIX and stocks had been rising together into this...


And did again this morning...before chaos was unleashed by The Fed...


The biggest reaction was a surge back to the upper end of the recent range in the Dollar Index...(at 14 year highs)


Jamming Yuan weaker...


And crushing JPY...back above 117.00 for the first time since Feb 8th and EURUSD below 1.05 - lowest since March 2015...


Treasury yields spiked across the curve but 30Y notably outperformed, flattenin the curve by 9bps on the day...


Crushing the yield curve to 3mo lows...


Crude plunged to a $50 handle...

*  *  *

Finally, let's just remember what happened last time The Fed hiked rates on the Wednesday before a Friday Quad-Witch...


Everything was awesome before...


Bonds rallied...


And crude tumbled...


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Say What Again's picture

The market is rigged.
The russians are to blame.

Buy moar Gold.

Long live the MoneyMakers.

Say What Again's picture

I'm trying to corner the market in Vodka.  You never know how long it will be available.

Holy hand grenade of Antioch's picture
Holy hand grenade of Antioch (not verified) UndergroundPost Dec 14, 2016 4:15 PM

"You never know how long it will be available."


Yeah ~ It's real fucking hard to grow potatoes... Fucking Matt Damon did it on Mars FFS

Say What Again's picture

HHG --  Another russian newbie.  Member for 8 weeks.  What a troll!

Holy hand grenade of Antioch's picture
Holy hand grenade of Antioch (not verified) Say What Again Dec 14, 2016 4:19 PM

U have no fucking idea, do you?

Holy hand grenade of Antioch's picture
Holy hand grenade of Antioch (not verified) Say What Again Dec 14, 2016 4:33 PM

Have you met?




U see... My problem with you is basically that (within your famous 8 week 'newbie' judgement), you haven't invested any of that time whatsoever to figure out what it took others, like Tall Tom. MsCreant, & others to figure out in 2 seconds...


Moreover ~ you have ZERO to argue with me about (except to try and argue that I'm some kind of 'Russian newbie')...


What a maroon! ~ lol


Arnold's picture

Settle this like men, Comradicals,

Across the table with American made Wodka.



Deathrips's picture

I have an arguement....you cite matt damon growing potatoes on mars?


You do know that was a movie and hes a actor?

Free Francis Sawyer!


Say What Again's picture

Deathrips -- Nice observation.

The truth about the new trolls emerge from behind the smallest of comment.

Say What Again's picture

My problem with you is that the majority of your posts are childish insults, riddled with adolescent use of vulgarity, and totally void of content -- and all this from a noob.  Are you truly a newbie, or perhaps you were previously on the site and had your login revoked, which fits your MO.

I will Up-Vote a person that disagrees with my opinion, but provides a healthy cogent argument in favour of theirs.  You have done neither.

You are a worthless troll.

GreatUncle's picture

Hi HH we were watching the comments by the others :-) Think he is a good un "say what again".

Raffie's picture

The Yellzilla has been unleashed on the markets.


Oh no, that bitch has got to go, GO YELLZILLA!!!

Eww euuu....



Fukkin grandma is going to ruin my Christmas. 

froze25's picture

I would like to thank Harry Dent's team for providing the information I needed to make money on this. Thank you Harry. Thank you YCS for your 30% gain over the last 2 months.

Lore's picture

Those fur-hatted bastards!

gaoptimize's picture

While keeping good company, ZeroHedge not honored with the top Fake News award from the MSM:  http://www.infowars.com/alternate-reality-viral-propaganda-chart-demoniz...


Traderone's picture

Closing below the previous days low is never a good sign for the bulls but i would hazard a guess that the ES is simply trying to re-establish fair value and this may take a few days. The rally from the lows though to VWAP and then subsequent sell-off is still something to be admired ,,and expected,,and traded.:)

Darktarra's picture

So when will the helicopters here (America) be dropping money from the sky? 

Al Huxley's picture

The free money's for the bankers, not for you.

AlexCharting's picture

Benefits of Trading Gold (GLD) with Options
100 shares of GLD now costs $10,900, while buying a slightly OTM option on GLD (Call/Put) costs around $150 (20 Jan. expiration). Both orders represents 100 GLD shares, but the option alt. dramatically lowers your cost-basis, and maximum loss is $150. A 1% loss of $10,900 is -$109, and 10% loss is -$1090…. goes without saying, options are a better alternative. As such, its not that expensive to get great market and directional diversification with options. 

Technically speaking, all key Gold datapoints are bearish (days, weeks, months), hence my Gold call options are purely speculative on some mean-reversion. Hell, might not even get that at this pace, so they might only function as a market hedge at best. Bear in mind, 90% of my portfolio is evidence-based (technicals) and do not speculate on normatives manifesting themselves in a batshit crazy market :P More, my recent loss in Gold is likely to even further decrease number of non-evidence-based positions.

Al Huxley's picture

Or, if you want better odds in a less crooked game with a more honorable opponent, try 3-card monte on the streets of any major metropolitan area.

NugginFuts's picture

Thanks - gotta learn me some options trading.

I sold out of some GDX positions this morning when they were up 2%, then jumped back in after they'd fallen 6% from opening value. After hours trading shows them still falling, though, so I maybe should have stayed out of those until the carnage is over. 

NUGT sure got pistol whipped today. Hope we can somehow pull that back up again. 

AlexCharting's picture

Options are also great for protecting shares you already own, you can 100% protect those shares from the bears by just buying a put. 
Here is a free course: https://optionalpha.com/
This one is good for learning and finding strategies: http://www.theoptionsguide.com/option-trading-strategies.aspx

Kaiser Sousa's picture

so let me see if i understand today’s "market” activity…
the MoneyChanger midget witch trots out and proclaims that just like over the past 8 years she’s gonna raise interest rates SOMEDAY in the not to distant FUTURE, even though we all know she’s a lying sack of banker shit…and then the Fraud Markets drop along with the only 2 forms of REAL Money…

then a funny little thing happens….
the Fraud Markets, particularly the Dow Jones Propaganda Index magically "trampolines’ off the low as “investors” change their minds about higher rates being bad for the fake ass fraudulent Fraud Markets, but the phony paper prices of Gold & Silver suffer 2 very distinctive WATERFALL declines…

A) Current Negative Real Interest Rates = Sale Non-Existent Gold & Silver

B) “We’re not kidding…This time we gonna raise rates” = Sale Non-Existent Gold & Silver

C) Stronger debt coupon Dollar + Foreign Currency’s Crashing + Domestic Export Slaughter = Sale Non-Existent Gold & Silver

yeah, i got it now…no matter what i do, just don’t buy anymore Physical Gold & Silver with your worthless banker paper script…too bad mother fuckers… aint gonna happen.…


SomethingSomethingDarkSide's picture

It's all about The Yenjamins, baby!

Keltner Channel Surf's picture

One big Jupiter-sized upvote for our friend Kaiser.  According to our friends at Google, this is the first (FUCKING) time he's used the phrase "real interest rate", THE most important determinant of nominal gold prices, in one of his posts.  There is hope indeed.

Now, if he would only add "expected future path of" before that phrase, he might understand the high absolute value of that correlation |-0.82|, one of strongest relationships in the arcane world of finance, means lotta folks will try to front-run, given how closely the two have inversely tracked since 1972, as the following chart shows:


Eventually, he'll perhaps realize that most of the other factors he rants about daily (Londone intraday trading shenanigans, flight-to-safety as on election night) are usually short-lived -- it's the path of real rates that largely drives the 'phony', unimportant-to-savers price. 

Of course, nothing's ever simple, there are nuances, as the following article discusses, significant, and more lasting, gold price increases often occur only during periods of negative real rates, when Kaiser's 'store of value' argument holds the strongest sway:  http://www.sunshineprofits.com/gold-silver/dictionary/gold-real-interest...

So, then, my beef, if any, isn't with his general argument, but his emphasis on intraday, transient market and newsy items, and the notion that our lovely bankers are always trying to crush nominal gold to prop up the dollar.  Seems that post-2009 Bernanke/Yellen ZIRP did precisely the opposite, at least for a good long spell.  Carry on.

LawsofPhysics's picture

Interesting.  Remind us, how does physical gold fare during a currency crisis?

Seems to me that the central banks always view physical PMs as the "preferred collateral" regardless of the fiat du jour?

Remember, there is no "price" if your trade partner, rejects your currency.

Let the Fed buy all the crap/bullshit paper they want...

Full faith and credit...

Keltner Channel Surf's picture

The persistent error in that sort of argument is suggesting that, with current facts at hand, the odds of a complete crisis of the world’s most important currency can be logically placed (not emotionally placed), with any precision, even slightly above zero, using comparisons to Venezuela, ancient Samaria or the fact that you, like all of us, don’t agree with central bank actions or charters. 

An ancillary error is assuming that, should this event occur ‘in our lifetime’, as Kaiser insists (which, given current actuarial tables, puts it within 25 years), that the 95% of the population not owning metals in any meaningful quantity will immediately transfer all the food and energy to the few that do. 

So, sensible hedges are fine, grab a 15% physical savings position if you’re a complete worry wart, but a near-100% ‘savings’ stash, as KS suggests, in preparation for what has less chance than an asteroid strike, in an extremely volatile commodity that nearly EVERYONE will need to convert a portion back to currency 'in their lifetime' (regardless of how many bold-fonted all-caps Biblical references appear here), at a time when there is a MUCH LARGER (caps for emphasis) chance of a major secular increase in real rates only just beginning, on pages that are increasingly read by those with less financial knowledge that any time in ZH’s history is, to my mind, more than unhelpful, regardless of the number of upvotes. 

But, I enjoy reading your posts, nonetheless, Mr. Physics.

mkkby's picture

buy all the crap/bullshit paper they want...

Kelt -- You'll never convince religious thinkers with a logical presentation.  As for *physics", I will remind you that most people think they know physics because they read a book on popular metaphysics.  The vapid Susan Sarandon character in Bull Durham is the example of this.

Keltner Channel Surf's picture

I know, but since this particular board, the last bastion of financial, non-'religious' types, has been largely ruined with their tiresome foolishness, I can't resist poking them periodically, not hoping to wake them from their dogmatic slumber, but to at least make them zip it, if only for a fortnight.

Anopheles's picture

Gold does POORLY during a global currency crisis.  Gold is a luxury commodity, not money.  60% of annual gold production goes into jewelry, the very definition of a luxury good. 

You are confusing a currency crisis in a single country with a global currency crisis and making the assumption they are the same.  Nope, not even close. 

ParticularlyStupidHumanoid's picture

Today is uninteresting. Everyone expected it to go down when the Fed raised rates, and everyone expected the change in December. So far all is as planned.

We'll know in a week's time if it's more than just what was expected or not.

Rainman's picture

the trillion in infrastructure stimulus is the big sweat for the boyz now ... it looking shaky in CONgress

Arnold's picture

Pizza is the big sweat.

Trillions are just a few, well placed  constituent earmarks away.

Keltner Channel Surf's picture

Just a few Fed dots moving about, just for fun -- no reason to get so excited. 

Just think of them as really, really large pixels ...

Keltner Channel Surf's picture

So, you're thinking simultaneous rate hikes and QE for '17?  Operation 'Twist' becomes Operation Grist?  I wouldn't put it past them ...

FreeShitter's picture

Yes sir...in the land of QE infinity, the satanic bankers and their usury depend on it.

Justin Case's picture

Double, Double, Toil and Trouble

That Libral You Hate's picture

 "Grizelda:"   ...wowwwww .... the school systems are really falling appart these days aren't they?  I hope you are just being ironic and actually realize that famous quote is originally Shakespear (from "The Witches' Poem" in Macbeth), and that it keeps appearing in modern pop-culture because it is making reference to the original Shakespear work.

CheapBastard's picture

If these left wing radical tearrist electors screw with the voting, I bet the stawk markets will dump at least 50% if not more. The markets hate uncertainty and that would be one of the ultimate uncertainties if they screwed with it.

o r c k's picture

NOTHING matters.  Manipulation.  There is no "market" and NO reason to discuss the "market".  Manipulation by organized crime. We might discuss "how long".  Maybe not.  Maybe we'll remain manipulated plebes. For decades.  Yak on ya'll.

ParticularlyStupidHumanoid's picture

I mean, it's like ZH is run by some fucking noobs. THE CALENDAR surprises ZH? what?

Say What Again's picture

This is an interesting comment from someone here for only 28 weeks.

Justin Case's picture

Why dont'ch help him out? Show him where he came in.

ParticularlyStupidHumanoid's picture

Identifying arguments...




Not an argument.

Say What Again's picture

Actually, I'm identifying the trolls, who have yet to provide a single post with thoughtful comments.