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Brutal Day For Stocks As Reality Recouples; Europe Now Negative For 2012

Tyler Durden's picture




 

Months of hope that the economy could finally start a 'virtuous cycle' were once dashed in a puff of smoke, after the jobs report came and cemented that the economy is now rolling over and picking up speed to the downside. Only this time, in a very ominous development for the permabulls, the MORE QE IS COMING, BUY ON DIPS crowd was nowhere to be seen. Why? Because for QE to be unleashed everything has to tumble first. And in a harbinger of what is coming to the US, just look at Europe: the EuroSTOXX 50 just turned negative for the year.

Details:

ES has now retraced the entire QE hope rally:

For once equity is ahead of credit to the downside:

Elsewhere, Treasurys continue their relentless move higher, with the 10 year now under 1.88% and at a 3 month low yield. So much for "that" Goldman call:

At this pace ES and the 10 Year will soon recouple, with credit once again having been correct.

The biggest causalty of the day was oil, in the aftermath of the CME doing what we fully expected it to do when Obama became the Margin Hiker-in-Chief and last night's CME hike for member to spec levels being as we predicted back in April. WTI is now just shy of its 200 DMA. When that support, a critical threshold for more QE, is taken out, watch out below.

In fact, post the last NFP and the Bernanke hope rally, gold, silver and oil have again recoupled:

But most importantly, for the first time in along while, gold has finally recoupled from the risk trade. If this is indicative of the future, watch out gold bears:

Bottom line: unreality is once again recoupling with reality... Just like it did back in 2011, and 2010, only for the central planners to step in and put everyone in their place. Will they do it again? Does the pope no longer bank with JPM?

charts: BBG

Bonus Chart: YTD performance of major asset classes - Oil red YTD and underperforming 30Y bonds now...


 

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Fri, 05/04/2012 - 16:11 | 2398033 HedgeAccordingly
HedgeAccordingly's picture

how about some kate upton dancing - cat daddy to lift our spirits? http://hedge.ly/gFWVSm 

Fri, 05/04/2012 - 16:17 | 2398070 Colombian Gringo
Colombian Gringo's picture

Stinky F@cking Europeans are screwing it up for all of us. Good news is in 2 generations due to demographics, they won't matter. Even better for them, white whores will be able to charge more money due to a shortage of supply.

Fri, 05/04/2012 - 16:30 | 2398142 NotApplicable
NotApplicable's picture

Ooh, looks like all the planets are aligning for a grand celestial event. This should be fun!

*grabs popcorn*

Fri, 05/04/2012 - 17:05 | 2398282 CrashisOptimistic
CrashisOptimistic's picture

Brutal day for stocks?

Silliness.

We saw -2% and -3% days last year.  Lots of 'em.

Today was nothing.

Fri, 05/04/2012 - 17:23 | 2398316 Michael
Michael's picture

The BLS throws a half a million or so workers in a black hole each month and says they no longer exist just to make their stupid percentage rate look like it's going down. Everyone is getting tired of the BLS shit.

Fri, 05/04/2012 - 19:27 | 2398536 brettd
brettd's picture

BLS is run by Goebbles.

Go to the weekly IRS withholding filings and that defines how many people have a job.

Sat, 05/05/2012 - 03:18 | 2399007 Nobody For President
Nobody For President's picture

On the other hand, it IS predictable and can be faded reasonably well - go to U6, double it, and that is probably somewhere in the realm of reality...

Revise NFP data upwards the instant you hear it and be in the ball park -

You know, standard compensation for gubbermint data...

Fri, 05/04/2012 - 17:51 | 2398381 Id fight Gandhi
Id fight Gandhi's picture

Yuck. The creepy guy old enough to be her dad has several sexual assault cases to deal with.

Fri, 05/04/2012 - 16:10 | 2398035 Catch-22
Catch-22's picture

Sorry O/T… but let me ask this; how many aliases do we have for POTUS ?

 

-      

Barry

-      

O’Bummer

-      

Fri, 05/04/2012 - 16:12 | 2398043 niktamere
niktamere's picture

I like Telepimpter/totus

Fri, 05/04/2012 - 20:20 | 2398631 VisualCSharp
VisualCSharp's picture

Obama, Osama, Obama bin Lyin', Obummer, Barry Soetoro, Oblahblah, Zerobama, 0bama, The Kenyan, Purple Lips, The Community Organizer, TOTUS, POTUS

Fri, 05/04/2012 - 21:53 | 2398765 Banjo
Banjo's picture

MaoBama

Fri, 05/04/2012 - 22:19 | 2398806 Ned Zeppelin
Ned Zeppelin's picture

You who blame all this on Obama are fools.

Fri, 05/04/2012 - 22:20 | 2398809 WonderDawg
WonderDawg's picture

I don't blame it on him, he doesn't make any big decisions, but he's certainly complicit.

Fri, 05/04/2012 - 22:24 | 2398811 Ned Zeppelin
Ned Zeppelin's picture

I don't mean to ay Obama is not bad, he is, it's just that he is just as much a member of the squad in charge of this as Bush II, as Clinton, as Bush I, etc.  Once you get that, you understand that Romney and Obama are Tweedle Dee and Tweedle Dum, no difference.

Fri, 05/04/2012 - 22:33 | 2398822 WonderDawg
WonderDawg's picture

Got it. Been singing that song for a while now, but most people won't listen, still playing the red team/blue team game.

Fri, 05/04/2012 - 22:55 | 2398847 nmewn
nmewn's picture

It is what it is.

Until someone with a viable chance of upsetting the apple cart comes along...the choices are what they are. I think Romney is a fresh tampon somehow preferable to the soiled one.

Seen it comin a mile away...blue blooded ex-Massachusetts governor, interconnected with Wall Street cronyism hack, completely unknowing of the common mans desires and aspirations against a narcissistic Marxist know it all know nothing with illusions of granduer.

Nice set up...as usual...choose wisely ;-)

Sat, 05/05/2012 - 00:18 | 2398925 bigkahuna
bigkahuna's picture

The wise choice is to get ready. The propaganda from the MSM and .gov is blatant. BLS figures do not mean a thing and the rigged stock market has been on a tear - I have never observed so much bs on a day to day basis. I know there are sudden and spoadic bursts of bs and propaganda that come from .gov such as nine eleven and and TWA 800 to name a couple - but lately, there is nothing but a thick and richly slathered constant stream of bs coming out.

That being said, look at the two assholes running for the big parties nomination for president. We are in for it. The wise choice is to get ready.

Fri, 05/04/2012 - 22:42 | 2398835 Charles Wilson
Charles Wilson's picture

So tell us, Ned, real HONEST like.  When you get into the sacred toilet voting booth, WHO YER VOTIN' FOR?

TELL THE TRUTH!! Usually, when we hear someone bring up political equivalence AFTER a complaint made about Obama, we know that there is a grand probability that said commentariat is voting the Democratic/Socialist line.

As was said yesterday in a post, there is a BIG difference between Right and Left.  Both sides may be a little STOOPIT, but there is a difference.

 

C'mon, Ned, Butch up.  who's it gonna be?

 

CW

Fri, 05/04/2012 - 23:09 | 2398866 WonderDawg
WonderDawg's picture

Wrong. The differences are small and inconsequential. The issues they distract you with are the luxury issues of a healthy society, which we are not. The real issues are kept hidden from view, despite the efforts of honest men like Ron Paul to shine the light of truth on them. If you think the differences between left and right are BIG, you're either naive or delusional.

Fri, 05/04/2012 - 22:20 | 2398807 WonderDawg
WonderDawg's picture

Hopey the Clown

Fri, 05/04/2012 - 16:15 | 2398055 EclecticParrot
EclecticParrot's picture

Gratified that equity shorts could finally sit tight ‘til noon without the typical reversal squeeze.

To quote a famous investor :  “GRRRrrrr...eat !!!”     

( ‘Tony the Tiger’ stares in rapt wonder at the upward fanning display of emerald candlesticks on his 15-min FAZ chart, Pynchonian rockets that hover atop the Keltner channel as the Badinerie to Bach’s 2nd Orchestral Suite chugs insistently on a Victrola.

Looking up the ten-candle grouping in Steve Nison’s book, he confirms a rare but classic Japanese pattern known affectionately as “New Morning Puffy-Clouded Whale-Spouting Total Fucking Blowout.”

He takes profits, using the proceeds to buy a more favorable ‘Nutritional Facts’ section for his new ‘Frosted Fakes’ cereal, in which 100% sugar takes on a pleasantly chewy, wheat-like form, from key contacts at the FDA.  The masses view this sweet bomb as undervalued, and ravenously add it to their Roth IRAs  . . .   )

Sat, 05/05/2012 - 03:21 | 2399008 Nobody For President
Nobody For President's picture

Damn, greenie for a great Friday afternoon post - I'll have what you're drinkin'...

Sat, 05/05/2012 - 06:57 | 2399074 EclecticParrot
EclecticParrot's picture

Parrots just drink water -- but I'll tell you who damn likely was drinking this afternoon:  the MIT alumni algos and the cowardly Goldman trading desk dorks that melt up the financials and Russell index each afternoon, fucking the shorts on low volume.  For them it's like taking candy from a baby seal (while clubbing it with a truncheon, of course), but not today !

Fri, 05/04/2012 - 16:14 | 2398056 mayhem_korner
mayhem_korner's picture

 

 

Ride a painted pony let the spinning wheel turn...

Fri, 05/04/2012 - 16:16 | 2398057 battle axe
battle axe's picture

"In order for QE to happen there has to be a big fall", pick one of the triggers A) IRAN/ISRAEL/USA WAR B) Europe Blows up C) China has a hard hard landing D) US Economy blows apart E) All of the above. 

Fri, 05/04/2012 - 16:34 | 2398171 NotApplicable
NotApplicable's picture

But wait, there's more!

India/Pakistan War

Turkey/Kurdistan War

Syria/Martian War

Dictator X nationalizing Foreign Corp Y

CME/Wall St. Implosion

and on and on...

Fri, 05/04/2012 - 16:43 | 2398203 Randall Cabot
Randall Cabot's picture

F) Fukashima SFP 4 taking a hit from another temblor or any kind of coolant leak. 

Fri, 05/04/2012 - 16:18 | 2398069 Vamp-Squid
Vamp-Squid's picture

Massive multi-year head and shoulders patterns.

Canadian stocks:

http://stockcharts.com/h-sc/ui?s=$TSX&p=W&yr=6&mn=0&dy=0&id=p61954247579&a=266329982

British stocks:

http://stockcharts.com/h-sc/ui?s=$FTSE&p=W&yr=6&mn=0&dy=0&id=p34152331240&a=266329991

Funny how two exchanges not using the USD or the Euro are displaying the same pattern.

And of course Dr. Copper:

http://stockcharts.com/h-sc/ui?s=$COPPER&p=W&yr=6&mn=0&dy=0&id=p02393076146&a=266329994

Fri, 05/04/2012 - 16:19 | 2398076 Seafarer57
Seafarer57's picture

I finally found an asset allocation that I can live with:

 

30% dehydrated food

10% MRE's

40% ammo

10% antibiotics

10% silver coins

Fri, 05/04/2012 - 16:28 | 2398135 Quinvarius
Quinvarius's picture

How does one aquire anti-biotics?

Fri, 05/04/2012 - 16:37 | 2398181 CvlDobd
CvlDobd's picture

Brick meets window

Fri, 05/04/2012 - 17:02 | 2398269 tmosley
tmosley's picture

Aquire a chemistry degree.

Or move out of the country to one that doesn't have a stick up its ass about medicine.

Fri, 05/04/2012 - 17:08 | 2398290 Seafarer57
Seafarer57's picture

one way is to buy from vet supply companies (penicillin,amocyicillin, ampicillin) like www.calvetsupply.com

Food-grade but cheap and no prescription needed to treat goldfish and rabbits - same stuff we use but a fraction of the cost.

Fri, 05/04/2012 - 18:36 | 2398472 CPL
CPL's picture

Vet supplies are pharma grade on a goldfish budget.

Fri, 05/04/2012 - 18:24 | 2398452 LawsofPhysics
LawsofPhysics's picture

eat some fungus or mold.

Fri, 05/04/2012 - 19:32 | 2398545 brettd
brettd's picture

Will a nice Stilton cheese do?

Fri, 05/04/2012 - 21:56 | 2398769 Banjo
Banjo's picture

Go to the doctor complain about some flu or other crap. Get medicine. Stock. Rinse n Repeat

Sat, 05/05/2012 - 03:27 | 2399011 shuckster
shuckster's picture

You know in Ireland, they require pharma companies to install "swallowing" testers in the pills so that the government can tell if you took your pills or threw them away. It's a case of big brother like no other

Sat, 05/05/2012 - 03:50 | 2399030 mjk0259
mjk0259's picture

Hard to believe. How could such a device work? You would have to have a radio emitting microchip in each pill...

Sat, 05/05/2012 - 03:53 | 2399031 mjk0259
mjk0259's picture

You can buy them for almost nothing from India over the internet , about $10 per hundred plus $30 shipping. Cheaper than US with most medical insurance. it costs me close to $100 to go to doctor and get prescription in US with insurance and takes half a day. Buy them in advance and you don't need to do that.

 

Fri, 05/04/2012 - 16:19 | 2398084 Doubleguns
Doubleguns's picture

Still need position limits to go with the margin hikes on oil to make it really effective.

Fri, 05/04/2012 - 16:28 | 2398131 AccreditedEYE
AccreditedEYE's picture

Beautiful charts... and wild moves today as REAL assets were bid and everything else was sold off. MLP's, utilities and gold gave the financial aristocracy the middle finger. Whoever that monkey was selling gold indiscriminately this week got a pole rammed up his/her ass today. Have we at last come to it? The Great Deleveraging of our time? haha

Fri, 05/04/2012 - 16:43 | 2398199 SheepDog-One
SheepDog-One's picture

Like the buyer of the Scream painting said, he wants out of paper and into 'things'. Good idea. Multi million dollar paintings are not my bag, but other 'things' sure are.

Sat, 05/05/2012 - 09:16 | 2399133 grid-b-gone
grid-b-gone's picture

In the long run, the market always wins, but this has been a great run for the printers and manipulators.

Law firm Dewey warns

http://news.yahoo.com/law-firm-dewey-warns-possible-closure-002226550--s...

More evidence that the market forces pendulum is slowing to reverse?

Still, the dollar, primary dealers, and the Fed have not yet been so weakened that they can't ramp stocks any day back above support. It is safer to bet heavily on the bounce than the fall.

Fri, 05/04/2012 - 16:40 | 2398179 SheepDog-One
SheepDog-One's picture

Oh this must be zee stabileeteee?

Fri, 05/04/2012 - 16:44 | 2398197 Conman
Conman's picture

Funny that brutal day here is still less than a 2% drop on the ES.. Still so complacent its scary. Where were those awesome 300 point daily swings on the dow?

Fri, 05/04/2012 - 23:38 | 2398892 sof_hannibal
sof_hannibal's picture

soon

Fri, 05/04/2012 - 16:51 | 2398231 kill switch
kill switch's picture

A brutal day would be a 700 to a 1000 point drop. Fucking thing is still over 13k follwed by another 500 to 600 plunge, now that would be brutal,,,oh Tuesday? another 700 points down, NOW WHERE GETTING INTO THE REALITY BRACKET..

Sat, 05/05/2012 - 03:34 | 2399015 shuckster
shuckster's picture

I think when the day comes, we'll see 5000 point swing days - of course, the circuit breakers will trigger but that's anticipated and people will react accordingly. of course, the IRA people will be the last ones out the door as Wall St cashes out entire trillions of dollars over night. The morning will come and the market will be nothing but red and many zeros. Assets will go to zero, zip zilch. Stocks will become invisible toilet paper. Gold will skyrocket. Companies will their shareholders to bug off and then the riots will start. They do not have enough cops to prevent it, and the military will have no part of it. And if the military steps in and cools things off, it still won't matter because people will have sworn off all financial products by this point and there will be no winning them back. They will demand their foreclosed homes back from the bank, they will demand payment in assets for the bank deposits, whether in the form of mansions, or whatever else. And then they will go home and put on their guns and prepare for war. Someone will step up to lead this country, and it's going to be hell for anyone who stands in his way. The bankers and criminals will have nowhere to hide. Any country that harbors them will become public enemy number 1. We have their names written down, we will hunt them down and bring them to justice

Fri, 05/04/2012 - 16:58 | 2398255 Boilermaker
Boilermaker's picture

Monday morning ES +22 handles.

*poof* problem solved

Fri, 05/04/2012 - 17:10 | 2398294 CrashisOptimistic
CrashisOptimistic's picture

You'll require some massive electoral surprises in Europe for that.

And heads up, ppl, the more important election is May 23.

In Egypt.

Fri, 05/04/2012 - 17:30 | 2398330 insanelysane
insanelysane's picture

On CNBS, the day started out great.  They were taughting how 150k or 160k was going to be the number and that it wasn't a bad number.  We all know 160k is a bad number and we really need 300k minimum but they were selling 160.  Then 115k prints and they try to spin it as a good number.  They really tried because even when you are expecting a pbj sandwhich but all there is to eat is half of a peanut butter cracker it is still something.  But at some point they realized no one was buying this crap so they had to sell it as a neutral number that we will just need to wait for next months number because 1 number is nothing.  But even the computers are scratching their heads and wondering how you can build anything when there isn't even a pile of shit laying around to build with.

 

Just how are 500k more people not working going to pay taxes and buy icrap without a giant Ctrl-P or confiscation of other peoples money???

Fri, 05/04/2012 - 17:48 | 2398372 q99x2
q99x2's picture

Meeting time. AA meeting time.

Fri, 05/04/2012 - 22:27 | 2398814 WonderDawg
WonderDawg's picture

Went to a meeting tonight, then to dinner with some of my pals. Good stuff. And had a good week in the market capped off today taking a nice gain on some NFLX puts. Good day, all in all.

Fri, 05/04/2012 - 17:55 | 2398392 orangegeek
orangegeek's picture

SP500 weekly closed below a major trend line.

 

Not a good sign for the bullish case.

 

http://bullandbearmash.com/index/sp-500/weekly/

Fri, 05/04/2012 - 17:59 | 2398398 worbsid
worbsid's picture

The volume was 20% less than the current 3 month average which is 50% less than a normal day last year when the big 'W' happened last Sept. No one really cares because the money left shortly after the flash crash.   

Sat, 05/05/2012 - 03:56 | 2399033 mjk0259
mjk0259's picture

Since 70% of trades are algos, does volume really matter?

Fri, 05/04/2012 - 18:35 | 2398473 vast-dom
vast-dom's picture

Ty: what wrong with you!?!?!? Reality isn't even close to recoupling! The SP isn't even close to 800! Yet! When it is, then we can talk about recoupling.......

Fri, 05/04/2012 - 19:37 | 2398555 YesWeKahn
YesWeKahn's picture

Brutal, I would say "gentle".

Fri, 05/04/2012 - 19:53 | 2398582 CryingBear
CryingBear's picture

HOLY SHIT YOU GUYS GET A BONER OFF OF 1.61% DROP. DONT BE DUMB AND SHORT HERE. MY TECHNICAL ANALYSIS STUDIES TELL ME THAT ES WILL RETRACE WITH A BOUNCE FROM 1360 TO 1390 BEFORE IT HEADS ANY LOWER.

AS FOR GOLD. IT WILL BE MURDERED IF IT BREAKS 1620 SO PLEASE WATCH OUT. YOU DONT WANT TO BE 20% POORER IN 3 DAYS BECAUSE YOUR PRICE OF GOLD IS DETERMINED BY A BUNCH OF ALGOS THAT FOLLOW CHART PATTERNS AND NOT ANY FUNDAMENTALS BECAUSE THERE IS NONE TO DETERMINE THE PRICE OF GOLD.

THANK YOU.

Fri, 05/04/2012 - 21:58 | 2398773 Banjo
Banjo's picture

My only problem is that I'm not looking to exit gold for quite some time 5, 7 perhaps 10+ years. Gold is my long term savings.

 

Short term savings is cash in ironically in a burst of inflation some debt also ;)

Sat, 05/05/2012 - 06:38 | 2399070 shuckster
shuckster's picture

They do not tolerate criticism of gold around here. However, I agree - too much money is tied up in fake gold ETFs. Too many people got sold on gold and have no way out but to take a loss. They don't realize that the use of gold for mercantile transactions is basically illegal and that sooner or later they are going to have to turn their gold in or go to jail for breaking the law

Sat, 05/05/2012 - 11:49 | 2399333 CryingBear
CryingBear's picture

PRICE OF GOLD IS ALSO DETERMINED BY HOW BERNANKE TALKS.

Fri, 05/04/2012 - 20:32 | 2398644 sof_hannibal
sof_hannibal's picture

Melt up, monday on QE rumors... or no, ... as ZH has said, bleed before the QE... central planning is totally working... not;

By gold physical, go on vacation. Equity isstocks flat for the year. Gold up; then get straped. Collapse and dark ages... makes me laugh; caz i dont give a fuck

Fri, 05/04/2012 - 20:44 | 2398668 The Watchman
The Watchman's picture

This story is all wrong. If you think about it, everyday is a good day for stocks as long as S&P is greater than 400. Thank goodness for legalization of accounting fraud. We'd be in real trouble if it weren't for our government coming to the rescue to allow corporations and banks to lie about their balance sheets. whew!

Fri, 05/04/2012 - 21:42 | 2398751 Yen Cross
Yen Cross's picture

 I got up this morning , and guess what I saw in the [ LOU/JOHN]?     {Down trend lines!}  a little weekend narcissism <>

Sat, 05/05/2012 - 00:06 | 2398917 Wave-Tech
Wave-Tech's picture

The Crude Oil Market was also brutal over the last few sessions.

Here's what we did...

How did you Survive the recent Collapse in Crude Oil?

http://www.elliottwavetechnology.com/2012/05/sudden-collapse-in-crude-oil.html

 

Sat, 05/05/2012 - 00:14 | 2398923 SpasticGramps
SpasticGramps's picture

This is going to be great for Chesapeake's colllateral and cash flow.

Sat, 05/05/2012 - 06:32 | 2399066 overmedicatedun...
overmedicatedundersexed's picture

the PPT at the FED had a three day weekend, they will be back on monday. Ben is right now at a trilateral/CFR meeting being re programed for paper delivery increases. .gov has been placed on antipyscotics as they see anyone with social security number are the enemy. increased abuse coming for traveling kids and grandma.

Corzine has left the building, Buffet is counting fiat in his cellar vault. CNBC goes to one viewer who is blind.

Sun, 05/06/2012 - 15:04 | 2401238 sharkieboy
sharkieboy's picture

This is a curial  week. sarkozy is out and greece going to renagotiate or leave the Euro. lets see how the market takes it. I see a crash coming soon.

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