Late-Day Panic-Buying Sends Dow To Longest Record Streak In 30 Years

Tyler Durden's picture

Millions of investors cried out today...

 

"Pause that refreshes" or "Time to panic"?

Of course utter panic buying into the close ensure a green close and an 11th record in a row - the longest streak in 30 years - because everyone knows stocks don't close red into the weekend -

The Dow went green for the first time of the day with 17 seconds to the close!

But this was the 3rd up-week in a row for The Dow (and 5th up-week in a row for the S&P and Nasdaq). Biggest weekly drop for Small Caps in 5 weeks

 

After 15 straight days higher, the S&P tech sector suffered its biggest decline of the year...

 

Financials worst day in 5 weeks, Goldman worst day in Feb, worst week in 5 weeks...The Big Banks were all red on the week...

 

Stocks and Bonds are both up 5 days in a row...

This is the 6th day in a row that The Dow and the Long Bond have risen in price together... equal record longest streak (1989 and 1994)

 

But while stocks actually having a down day was briefly possible, it was precious metals that stood out...

Gold rose above $1250 this week for the first time since the election - Gold is up 8 of the last 9 weeks... Silver is up 9 weeks in a row, back above its 200DMA - longest streak since May 2006

 

Bitcoin hit a new record high...

 

Crucially, anxiety in Europe - ignored by most - has sparked panic bids into short-dated German paper

 

Dragging global DM yields lower across the curve...

 

Leaving Treasuries 'cheapest' to Bunds since 2000...

 

Even as 10Y yields tested 3-month lows...

 

This was the 10Y Bond Future's best week since June 2016...

 

The Dollar dropped on the week - the 7th weekly drop of the last 9...

 

Yen was the biggest driver (stronger against the greenback) but we note Cable had been until it tumbled today...

 

Copper was clubbed but bounced back, Precious metals were the week's big winners...

*  *  *

As we asked earlier... Who's Right?

The 30Y Yield just dropped back below 3.00% once again and 10Y is back at February lows - what happens next?

 

Despite the exuberance of hope, protection is heavily bid...

 

And if Utility stocks' demand is anything to go by, bond yields have a long way to fall...

 

Finally - absent the hope-strewn soft-survey data, 'hard' data has decidedly deteriorated...

 

So who's right? Stocks... or VIX and Bonds and Real macro data?

 

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Altesh's picture

Miners have been outperforming gold quite a bit since december, they are due for a correction while gold catches up. Miners usually leads the price as well so it could be a sign telling us that gold is due for a intermediate top as well. 

NugginFuts's picture

Tell me where I'm off.... Miners are leveraged to the value of Gold. Gold goes up 1%, miners go up ~3%. If I overlay charts for GLD and GDX, there is NEAR PERFECT correlation between them in terms of direction. Until this month. All of a sudden you've got GLD going up constantly while GDX gets clubbed like a baby seal. 

Gold is behaving as it should - when yields decline and the dollar drops, gold goes up. But the companies tasked with PRODUCING the increasingly valuable mineral go down? I don't think so. There's a fixed cost to harvesting gold. As the price of the commodity goes up, so do your profit margins. Intrinsically and based on any kind of fundamental analysis, their stocks should improve.

Meanwhile you've got CAT with DECREASING sales and less likelihood of infrastructure spending and yet it keeps rising. In short, these are BOTH examples of manipulation. The only question remaining is WHY???

Altesh's picture

Most of your post is way off. Just do one simple thing. Look at gold price from today and compare it to last year when it was at the same level. How much was GDX, GDXJ valued by then? I can help you a little bit, days around Trump victory GDXJ were at about the same level as now, yet gold was about 50 dollars higher, same story with GDX. 

Looking at the lows from december GDX has risen about 40%, GDX about 60%. Gold is up 12%. 

Just going by fundamental analysis is retarded, you fail to take resistance levels into account, trends, sentiment, future expectations. You think it's a coincidence that miners are sold off at levels that have been resistance or support going back at least year? Miners have reached heavy resistance and are sold off on profit taking. It's not a conspiracy or outright manipulation. This weakness didn't surprise anyone who has been following the technical aspects of the miners. 

If you stopped crying about manipulation maybe you'd actually manage to understand how miners move. They have violent corrections and they do not follow gold perfectly either, they lead or lag depending on investor sentiment. It's just the same as with gold/silver where one metal may lag or lead. Just look at the breakout from 17.25 in silver this year. 

 

NugginFuts's picture

I didn't claim perfect correlation. But sure, let's go back to the December low. Between then and now Gold has gone up 12% and GDX has gone up 33%. 3 to 1 correlation. GDXJ isn't a fair comparison to gold because it involves JUNIOR miners. The correlation is closer to silver than gold. And silver has done better than gold since the December low.

Yes, I get resistance and support, etc etc. I love charts and study the underlying factors as much as the next guy if not more. Been tracking these guys for years. But here's our latest puzzle: when global uncertainty is up, yields down, dollar starting to correct downwards, and gold has surged UPWARDS by 1.3% in the last week, miners have DROPPED 4.3%. So now we have a negative correlation instead of weak positive. If that seems natural to you, then I hereby dub you President of the Counterintuitive Society.

Here's my actual theory: today was options expiration day. If you look at the open options interest, there was a ton of options positioned 4-5% below the opening price of GDX. That also helps explain some of the larger volume we saw today. In short, the selling pressure outweighed buying pressure. Assets tend to gravitate towards the largest block of open options on expiration day, and that just happened to be lower. So not outright manipulation, just that's where the pressure focused: downward.

mosfet's picture

Nothing to do with a correction or beta decay.  Everything to do with Gold rallying pre-market during the last 2 days in a row.  JNUG and NUGT drive the entire Gold market sector (a demonstratable fact) and they primarily trade during market hours from 9:30am to 4pm ET.  Gold runs 24 hours a day weekdays so, by the time JNUG & NUGT opened, Gold had already made it's big moves both mornings; before market open.  No one buys mining stocks 'after' Gold goes up so this was more of a shorting opportunity.  It's sucks but that's the way it is.  I've been trading for years and seen it over and over.  Gold/Silver mining stocks front-run the metals - Not track them.  For ETF's that track metals, USLV & UGLD are the way to go but I don't recommend them cause the moves are too anemic in comparison to the beta slippage.  Only real choices in PM's are to hold physical and/or trade very risky leverages.  The former preserves wealth, the later (attempts) to build it.

Peak Finance's picture

Farse is

Gold up Bigly
NUGT & JNUG down Bigly

Yet another sector I have to abandon due to manulipatiors :(

 

Altesh's picture

Maybe you just don't understand the sector and cry manipulation instead. 

NugginFuts's picture

Coming to that same conclusion. CAT can bleed money like a wounded pig and go to the moon, but lean profitable companies get their stocks dumped as their margins improve? I call bullshit. 

Altesh's picture

Many miners are up several hundred percents going back one year. Obvious manipulation to keep miners down. *facepalm* Seriously go check out how previous bull markets in gold has played out. There are plenty of big 20%+ corrections taking place in the miners during a bull cycle. 

SomethingSomethingDarkSide's picture

That all sounds great, but I think the main point being made is how bat shit insane it is that Gold & Miner pricing tracks all of those factors (mentioned in your post above) while the rest of the market prices itself seemingly out of whimsy.  It's frustrating, no?

dude duderson's picture

Stocks are right, obviously. 

Snaffew's picture

If the Casinos gave out money to the longs like the stock market does...there wouldn't be any more casinos---the stock market is not a casino---at a casino there are calculable odds---in the markets, there is only calculable madness.

Wee_littte_dogee's picture

Speaking plainly, and I'm sure Germany is a nice place and I'm pulling for the German people to awaken from their self-induced Merkel slumber but with all the new "arrivals," unwanted or otherwise, Germany seems to turning into a real shithole. Outside of the Mercedes-Benz plants the country must be going to shit. And really, MB doesn't rate that high in Consumer Reports. I guess it's a status thing but Honda is a much better, even if not more desired, auto. Sucker born every second...

BigFatUglyBubble's picture

very funny. conditioning the future muppets

milking institute's picture

Well,they managed to keep this turd afloat one more time while clubbing the miners. gold was unimpressed and kept moving north. bonus checks are in the mail for the few remaining Humans actually involved in this Farce,the Bots just get their scheduled maintance and lubrication. it's just amusing at this point in the game,sit back with cash and gold and enjoy the show....

Silver Savior's picture

I thought this turd would have sunk a few years ago. It's totally amazing it still floats. 

2rigged2fail's picture

They are blatantley showing the sheeple they can do whatever they want.  The will schduele the implosion, or Dow 30K.  Its totally rigged

BlueHorseShoeLovesDT's picture

Replace "spoon" with "market" and you will understand.

 

https://www.youtube.com/watch?v=dzm8kTIj_0M

RightLineBacker's picture

Gawd! I've been overcharted.

Probably have recurring nightmares this weekend of being attacked by swarms of angry charts.

And wake up Monday in Kansas.

Feel it Reel it's picture

The Fed owns stocks..The congress and their families owns stocks..The owners of the companys issuing stocks own stocks and their family members own stocks...So, why wouldn't they continue to levitate stocks? Why would they allow their portfolio to lose money...and this goes for other Countries and their so-called leaders as well...I just don't see an end game...What am I missing??

lakecity55's picture

Somewhere in the near future, a butterfly will flap its wings and everyone will be in for a surprise, surprise, SGT Carter.

 

Barney08's picture

It's like they are printing money to buy this market. Oh wait.

Lizardking's picture

Friday reversal, interesting.... stay awake for the next several Friday's. You will be entertained with volatility very soon.

HoserF16's picture

Panic Buying and POMO look an awful lot alike...

Silver Savior's picture

They can buy up as much of this bullshit as they want all I care about is what my 401k balance will be when I take out a loan to buy even more PMs. I was just going to go with a silver monster box but the funds are flowing like crazy I could buy some gold St.Gaudens double eagles too. I figure might as well get something before the dollar collapses.

lakecity55's picture

They have a 401 where I just started to work (again).

I was going to get burned by marriage penalty SS tax. I am going to put in the minimum, and take cash for the low-vol fund I am buying and spend some on Ag. I think I will get more Geiger kilo bars. I had a shelf collapse in the PM safe due to too many bars, so now they have to sit on the floor of the safe. I am having a guy put bracing under the floor joists.

I can't put any more than a few rolls of Pandas in the gun safe, it's too full of guns.

I may have to go boating.

Silver Savior's picture

Geiger bars are a good choice but I prefer the Scottsdale stacker bars. Yeah sounds like a boat trip should be in the works. lol.

Silver Savior's picture

Who is buying this shit?

ParticularlyStupidHumanoid's picture

lolololol ZH is trying to short sell a bull run?

lakecity55's picture

I am bailing out. I made out like a bandit, but it's too nerve-wracking. I put an order in to sell all my ABX. Next up on the block is CSX.

I am putting everything into a low-volatility Franklin fund.

Now I have not looked at any margin charts, but I'd bet tons of people are buying on margin. This looks like '87 or 1929 or something.