Credit Slumps, Equity Pumps, And Volume & Volatility Dumps

Tyler Durden's picture

UPDATE: MANU below IPO price at $13.90 now....sigh

You know the score by now. Equities stage late day surge to green driven by an irrepressible squeeze lower in short-term volatility but high-yield credit doesn't follow suit as volume remains absolutely amazingly incredibly non-existent. S&P 500 e-mini futures (ES) ended the week nicely higher - closing today at the highs over 1402 (at the day-session close) with VIX at 5 month lows well under 15% (down 0.5 vols on the day which is a big move for a 1.5pt ES gain). HYG (the high-yield bond ETF) ended lower again - basically 5 days in a row - which is very unusual given equity's push to new highs. Risk assets in general did leak higher as stocks pushed up but are notably less bullish (and it appeared from our chats that credit desks left early and the IG and HY indices were simply being reracked higher - as opposed to traded there). Gold outperformed on the day - and it seemed like the EOD ramp in ES was a magnetic pull to Gold - as it disconnected from Treasuries and FX quite handily. The USD ends the week up 0.29% (yes, up), the S&P 500 up 1% while Treasuries limped a little higher in yield today to end the week 5-10bps higher (and steeper) in yield and commodities up the same as stocks (around 1%) aside from oil which managed 2.2% on the week.

NYSE Volume....dead

S&P 500 e-mini futures saw the lowest volume in years this week (as low as xmas-weeks) with the week's range the lowest in 16 months...It does make us wonder if Knight was using ES as its market overlay to manage its market-making exposure as 'nothing' changed this year in ES volumes in general until this week and suddenly now a cliff-dive!


VIX smashed over 22% lower in the last 7 days - this has happened twice before in the last year and did not end well for the bulls...




Gold outperformed but stocks tried to catch up into the close...

and credit continues to underperform...


Credit underperforming not just stocks (green) but notably weak relative to intrinsic value (dark red and lower pane). We suspect they are trying to soak up the selling pressure in the ETF before they are forced to unwind in the cash bond market (and we pointed out this week that HYG has little cash left)...


but FX markets exhibited major dispersion this week with EUR 0.9% weaker vs USD and CAD 0.9% stronger as the DXY closed up 0.3% (with the now ubiquitous US open to EU close actin dominating)...


Charts: Bloomberg


Bonus Charts: MANU Afterhours hit $13.90...

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fireangelmaverick's picture

Need to hump some hot rumps.

Ahmeexnal's picture

Berlin airport unable to service it's debt.

German fascist authorities buy UBS database of German tax-evaders. Germans start fleeing their country in advance of complete fascist state implementation upon euro collapse:

Switzerland delays new banknote release. Are the Swiss waiting for euro-collapse to issue GOLD FRANC backed paper notes?

Piranhanoia's picture

Berlin tower to Air France jet incoming;    "Your credit card didn't go through for landing payment and subsequent privileges.  Please hold until we get the euros.

francis_sawyer's picture

 "Even the dump is dumpin'"...

~Tony Manero

ZeroAvatar's picture

My beer belly has it's OWN beer belly!

walküre's picture

Berlin Airport needs to find 1,17 billion Euros...

MONTI!!!!! To the printers!!!!

Seriously though. Imagine this shit going down in Germany against the backdrop of German taxpayer funded bailouts to Greece, Spain, Italy, France ....

This toast has two sides and they're both BURNT!

Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

Preferably scrump a plump rump. OK, chump?

mrjig27's picture

I usually kiss my kids before I tuck them in at night, so I like to keep it clean. But after watching today’s meld up? Just this once..


Hey Ben, FUCK YOU!!  

Bear's picture

I know that you'll be calm by bedtime ... insanity is expecting anything else from the market (We are mark and they are mark-get)

Manthong's picture

You really should include Tim and their boss, Evelyn in that shout out.

Squid Vicious's picture

you meant Lloyd, right?... is Evelyn his confirmation name or something?  

lineskis's picture

"and credit continues to underperform..."

Equity, watch out below...

Winston Churchill's picture

Standing by my top call of last Friday.

When this sucker rolls over,aint nothing going to stop it.

French Frog's picture

Yeah but until that happens the bears will get spanked many times trying to pick the proverbial top (sad really)!

Brother Sebastian's picture

What was your call last Friday?  I agree that the SPX is topping...probably just below the April 2 intraday high.  My guess is that this will occur sometime on Monday.

French Frog's picture

Oh please, in case you haven't watched properly it's "equity, watch out above"; until it changes (and it will ... eventually) the bulls are in charge and the bears got forced to cover ... yet again. No need to worry if you're a bull at the moment: recent gains have been so substantial that a stop loss can be safely positioned and even when it'll get hit, the profits will be nice.

Bear's picture

Amazing .... all the real action 'after' the close. What do they do ... turn their HFT machines off at 1:15?

pods's picture

Wow, stroll through the comments on that one if you ever thought the comments on ZH have gone downhill!

So many people, so little thinking.


Dr. Engali's picture

I like to read the commentary on the yahoo boards. It helps me appreciate the commentary here. It also helps my to keep expectations real when I see what kind of stupidity is out there.

pods's picture

I have started to look at the comments on stories on my online local rag, and to me it seems that the VAST majority of people will happily give up any freedom they have left for someone in authority tell them that everything will be fine, and that monsters are not real.

It is going to be a very rude awakening.  

Like a drowning man will use anything to keep his head above water, when things get rough people will sell out anyone and anything to have their comfort back.


Rainman's picture

"Nobody ever went broke underestimating the intelligence of the American public."

H.L. Menckin

Hype Alert's picture

"Like a drowning man will use anything to keep his head above water, when things get rough people will sell out anyone and anything to have their comfort back."

Seems like the country did that last election.  I'm confused on why so many still want him.

Somehow we just ping pong back and forth, lose more freedom and never move forward.

disabledvet's picture

The media has us right where they want us. We do not PARTICIPATE. Try and get a guy or gal will keep YOU honest...and everywhere and always "that's the hardest thing."

magpie's picture

The psyops agentur is too centralized for its own good. One problem 'the other side' won't ever have to deal with lol

Legolas's picture

Unbelievable.  Reuters PIMPS is more like it.  Excuse me, but I'm going to go lose my lunch.

govttrader's picture

Seriously...last minute ramp in ES...feels like a sale

Dr. Engali's picture

So is this how Obama and the Bernank grind the bourgeoisie between the millstones of taxation and inflation? A market that offers no return and bonds that offer no yield.


“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.”


Vladimir Lenin

LongSoupLine's picture

One step closer to revolution.

foodstampbarry's picture

JPM,  Golden Saks Long. USA short.

Dr. Engali's picture

Speaking of taking a dump.....

Flaming Ferrari's picture

Overnight futures losses erased. All US equity indices positive.  Bad news can’t touch this market. March higher continues.

Who is buying this rally?Answers on the back of a stamp please.

EvlTheCat's picture

Drunk and OT:

The world has absolutely gone mad.  When bikini clad women can't do a fashion show on an airline because of PC bullshit:

Runway clear for take off!': Vietnamese passenger airliner fined for hosting mid-air beauty pageant with scantily clad Hawaiian dancers

However the airline has now been fined after a video showing the unusual high-altitude antics was posted on YouTube and became a hit on social network sites.
The Vietnam Aviation Authority has ordered the airline carrier, which was only launched last year, to pay £600.

I can tell you one thing if I was a passenger I would pony up to help pay the fine.


Freewheelin Franklin's picture

Off Topic

I just caught the end of an interview with Bill Black on CNBC where he totally destroys the Talking Heads regarding the prosecution, or should I say lack thereof of fraud.

"Oh boohoohoo. If you prosecute Goldman Sachs, you have to prosecute everyone, you can't do that, boohoohoo."


Man, FUCK these assholes! Maria Bartoromo can suck my cock!

101 years and counting's picture

olympics end on sun.

and so does the illusion.

walküre's picture

Beijing 2008 and ensuing collapse REDUX

Flaming Ferrari's picture

She probably has. Her damn mouth is so big you just didn't feel it.

IMA5U's picture

$1.1bn went into high yield funds last week


credit is hardly slumping


clcmae's picture

I think the best thing that can happen for market reality at this point is for the Fed to ease.  BFD...then what's going to happen?  Stocks are going to rally?  Based on what?  

If things are so fucking bad that central banks on 3 continents are easing, is that really a cause for asset price appreciation?

Flaming Ferrari's picture

In case you need a reminder of what to do when QE hits, here is the video. Best not think. JBTFDYFI

walküre's picture

The only "dip" you can maybe buy is in ETFs tracking the indexes. If you're lucky they will perform according to market moves.

If you bought dips in most equities since 2010 and held through 2011 and 2012, you would have lost money by now.

Bernanke put is a myth.

Tangible assets are the way to go.

no life's picture

I know you are, 'cause it's fuck or walk..

magpie's picture

Oh i'm all right.

If it took 200 Euros to turn things around, i invite
you to spend 800 Billion to take my 800 'Euros'. You know i don't use stops, bad kid who grew up during the Spring of 2009.

LG_Knight's picture

Was anyone clever enough to buy/sell the MANU roundtrips to $14 after ZH post today?