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Crude Crushed, Stocks Slump, Silver Recouples With Gold

Tyler Durden's picture




 

WTI Crude dropped its most in almost five months today, losing around 2.5%, beginning its descent after Draghi somewhat disappointed a hungry markets this morning (after better-than-expected claims data). Silver (which recoupled with Gold today) and Copper also started their drops at that point and extended the losses after the ISM Services miss. Gold leaked lower (though not as much as the rest of the commodity complex) even as the USD (which had been following its typical path of strengthening through the EU day session) dropped as an expectant EUR popped on no rate cuts. Stocks started their slide at the same time but broad risk-assets were in general leading equities lower (more carry FX and commodities than Treasuries today). We had a little bounce in stocks into the European close (up to VWAP) but that quickly fell back, lost today's lows, then broke yesterday's lows heading for one-week lows and the S&P 500's 50DMA. AAPL lost its 50DMA and closed there for the first time since earnings. After some noise around the macro data (and Draghi) this morning, Treasuries were extremely flat - trading in a very narrow range all afternoon - as did FX in general but AUD kept leaking lower (down 2% on the week now) and JPY stable on the week. Equities and credit re-converged today and late in the afternoon as ES (the S&P 500 e-mini futures) caught up to the downside of broad risk assets and stabilized in the late day ahead of tomorrow's noisy and meaningless NFP print. ES volume was average as it traded closest to its 50DMA in a week (and dropped the most in 8 days today closing near its lows of the day) and VIX, while off its highs of the day, closed above 17.5% - its highest close in over a week. While stocks are short-term in line with risk-assets, over the medium-term they remain notably expensive (especially to Treasuries since last week).

Brent and WTI suffered notably today as they suffered their biggest single-day losses in almost 5 months - though the spread remained relatively stable...

Equity and credit markets - from the short-term lows of a week or so ago - have recoupled and the obvious exuberance in stocks (blue) has retraced back to the less sanguine (more realistic) credit market AGAIN!

Silver's recent underperformance has been notable. It does seem though that today's move - which appeared to get the other precious metal back in line with Gold from early January - may just have brought the forced selling or unwinding of Gold/Silver trade to an end for now as it limped higher into the close...

Short-term, equities (red below) caught up to risk-asset's (green below) weakness and this provided some stability this afternoon ahead of the NFP data tomorrow...

Stocks remain expensive relative to longer-term CONTEXT (risk-asset-proxy)...

but most specifically ion the short-term the hope for QE3/4 has driven a wedge between Treasuries and stocks that we suspect will be filled soon...

and finally, a weak end to the day for ES - unable to make it back to VWAP (light blue) which also corresponded to the pre-ISM levels - suggests some stuck longs wanted out ahead of tomorrow in a hurry amid larger than average volumes (red ovals)...

Charts: Bloomberg and Capital Context

Bonus Chart: Longer-term S&P 500 e-minis show today's close coincided with 4/27 lows (solid red vertical) and a 61.8% Fibonacci retracement fan (dark red) of the 4/23 to 4/27 swing high -

click for larger image

 

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Thu, 05/03/2012 - 16:35 | 2395115 BandGap
BandGap's picture

Somewhere, Burl Ives is smiling....

Thu, 05/03/2012 - 16:51 | 2395173 LFMayor
LFMayor's picture

you mean with his old busker song?
"to be buggered sore,
as a hobo's whore,
at the big rock candy mountain".

oh. Not that song, the other one.  Gotcha.

Thu, 05/03/2012 - 17:26 | 2395260 cheesewizz
cheesewizz's picture

I just love Burl... We used to tan together, I think...

Thu, 05/03/2012 - 19:02 | 2395443 spekulatn
spekulatn's picture

I'm just happy I called Blanchard.

 

P.S. Shame on you for taking your toddler to tan.

Thu, 05/03/2012 - 16:36 | 2395117 lolmao500
lolmao500's picture

Silver still crap...

Thu, 05/03/2012 - 16:48 | 2395149 Paul Atreides
Paul Atreides's picture

Physical silver is a bargain! Hitting my dealer up tomorrow after the daily 10am smackdown....

Thu, 05/03/2012 - 16:50 | 2395167 Spitzer
Spitzer's picture

Gold stocks are almost free. Exeters (XRC) gold is worth about $20 an oz at its current stock price. No debt, 88 million in the bank..

Thu, 05/03/2012 - 17:05 | 2395195 Paul Atreides
Paul Atreides's picture

Staying muppish on paper...

Thu, 05/03/2012 - 17:08 | 2395209 Likstane
Likstane's picture

Got my round shiny things today.  Had them for over an hour before the bridge to my house.  You know the rest of the story. 

Thu, 05/03/2012 - 17:24 | 2395257 Pete15
Pete15's picture

Agreed Gold stocks are too cheap not to buy, I had to get some IAG and just for some dividend fun I picked up Leroy Seafood Group. 

Thu, 05/03/2012 - 17:29 | 2395268 flacon
flacon's picture

Let me guess....ummm..... you had a boating 'accident'? Same thing happened to me and gosh darn it I just can't find that monster box... 

Thu, 05/03/2012 - 19:48 | 2395498 oddjob
oddjob's picture

Buzz on Exeter 'not good'.

Thu, 05/03/2012 - 23:15 | 2395795 Desert Irish
Desert Irish's picture

The only problem with Exeter is the deposit will never be developed. This was posted this on IKN blogspot yesterday.

I will go on record as both an experienced “geologist of the world” (visited Cerro Casale in 1991) and an analyst (since 2007) by saying this:

I “see no real value” in either the Cerro Casale or Caspiche projects. Neither is economic and that is the reason that Barrick/Kinross has chosen not to develop Casale and Exeter has not found a partner to fund nor has been able to obtain financing on its own to development Caspiche.   There is no need to hide under the veil of anonymity when giving an honest opinion. Please feel free to post this using my name as its source.   Regards, Mickey Fulp

Mercenary Geologist

Thu, 05/03/2012 - 17:49 | 2395301 LULZBank
LULZBank's picture

26$ is cheaper than 29$.

 

Just sayin...

Thu, 05/03/2012 - 16:58 | 2395186 tmosley
tmosley's picture

Mr. Hankey suspects you have forgotten the importance of crap: http://www.youtube.com/watch?v=NicJcAx5sD0

And what happens when you try to smash it once too often: http://www.southparkstudios.com/clips/103458/mr-poo

Thu, 05/03/2012 - 16:44 | 2395145 skepticCarl
skepticCarl's picture

I am playing the impending decline in crude with the inverse ETF, DTO.  I expect WTI to reach only the low 90's, not a huge collapse.  The emerging world still is thirsty for this stuff, despite it's current temporary high inventory.

Thu, 05/03/2012 - 16:49 | 2395161 SheepDog-One
SheepDog-One's picture

Yea oil went up because we had big problems, and mid east troubles with war at any minute...so thats all been resolved now I guess.

Thu, 05/03/2012 - 16:44 | 2395146 sbenard
sbenard's picture

I really like the daily market summary!

Thu, 05/03/2012 - 16:45 | 2395152 Lost Wages
Lost Wages's picture

I better wake up early tomorrow.

Thu, 05/03/2012 - 16:47 | 2395155 SheepDog-One
SheepDog-One's picture

These guys dont know WTF theyre doing at all, this entire market now is just 1 continuous 3 Stooges movie. 1 guy in Europe says something, and the entire world markets move 2-3%? Just stupid. 

Thu, 05/03/2012 - 17:09 | 2395215 Vince Clortho
Vince Clortho's picture

+1 upvote for the three stooges analogy

Thu, 05/03/2012 - 16:48 | 2395159 Fips_OnTheSpot
Fips_OnTheSpot's picture

SELL EVERYTHING! :]

Thu, 05/03/2012 - 17:00 | 2395191 Seafarer57
Seafarer57's picture

Asset allocation is a fraud.

Thu, 05/03/2012 - 17:00 | 2395192 VonManstein
VonManstein's picture

rick rule knows the score and he know it!

http://www.caseyresearch.com/cdd/rick-rule-contrarian-speculation

Thu, 05/03/2012 - 17:06 | 2395206 carbonmutant
carbonmutant's picture

The direction of the current economy does not encourage speculation in oil...

Thu, 05/03/2012 - 17:16 | 2395230 thursday0451
thursday0451's picture

WARNING WARNING WARNING
(this is off topic but important!)

Russia threatens to strike NATO missile defense sites
http://www.washingtontimes.com/news/2012/may/3/russia-threatens-strike-nato-missile-defense-sites/

Russia’s most senior military officer said Thursday that Moscow would pre-emptively strike and destroy U.S.-led NATO missile defense sites in Eastern Europe if talks with Washington about the developing system continue to stall.

“A decision to use destructive force pre-emptively will be taken if the situation worsens,” Russian Chief of General Staff Nikolai Makarov said at an international missile defense conference in Moscow attended by senior U.S. and NATO officials.

Russia warns on missile defence deal with Nato and US
http://www.bbc.co.uk/news/world-europe-17937795

Russia says it is prepared to use "destructive force pre-emptively" if the US goes ahead with controversial plans for a missile defence system based in Central Europe.

Thu, 05/03/2012 - 17:22 | 2395253 Cdad
Cdad's picture

Yep...only found a link to the story today on Drudge.  Everyone else is into FB and the coffee trend.

Thu, 05/03/2012 - 17:48 | 2395302 CvlDobd
CvlDobd's picture

Does anything outside of coffee and facebook matter?

Thu, 05/03/2012 - 20:29 | 2395542 Spastica Rex
Spastica Rex's picture

Apple.

Thu, 05/03/2012 - 20:48 | 2395570 CaptFufflePants
CaptFufflePants's picture

I found it on the front page of the SF Chroicle.

Thu, 05/03/2012 - 17:47 | 2395296 LULZBank
LULZBank's picture

*Yawn*   War with Iran is fading, oil price is receeding, someone had to beat the war drums ... *Yawn*

Rooskis dont go to war with big adversaries, neither do American citizenism.

Thu, 05/03/2012 - 17:52 | 2395307 DanDaley
DanDaley's picture

That's just woofin'.  The real threat will be when the Ruskies and Chinois set up a gold backed currency that circumvents el dólar. Then you'll know that it's "OUCH" time for real, baby...er, sorry...bitchez.

Thu, 05/03/2012 - 17:53 | 2395309 hoos bin pharteen
hoos bin pharteen's picture

Classic example of "vranyo."

Thu, 05/03/2012 - 19:10 | 2395448 DosZap
DosZap's picture

Russia’s most senior military officer said Thursday that Moscow would pre-emptively strike and destroy U.S.-led NATO missile defense sites in Eastern Europe if talks with Washington about the developing system continue to stall.

 

Then they better get their Spetnaz, and Elite troops ASSES the hell back home, instead of practicing policing with our forces ON  American soil, in a town near you.

The old saying "Something is rotten in Denmark", has changed...................now it the entire friggin planet.

Thu, 05/03/2012 - 23:05 | 2395769 earleflorida
earleflorida's picture

The USSR starts a war with Afghanistan Dec.24,1979, and is defeated by the Afghan's approx. ten years later, Feb.15,1989.  Reagan supplies the Pakistan's and Afghan's with U.S. $$$ and weapons through a covert war, which created and immobilizes present day al Qaeda, and the Taliban. Which by the way, funded the entire Nuclear program for A.Q. Khan through the ISI. All this to help defeat the Russians. Was this a Pyrrhic victory for the U.S.A. or Russia? Don't answer if your confused about the subliminal query. 

What is noteworthy from the above statement is extremely interesting regarding the timing of the USSR"s [2/15/1989] defeat. On Nov/1989, approx. seven months later, the Berlin Wall comes down, bringing about the reunification of East and West Germany. Very interesting, indeed? 

The USSR collapses in Dec/1991,... approx. two years later, and goes belly-up - bankrupt! Shortly after fifteen former soviet-block nations become independent. Coincidentally [?] the Maastricht Treaty of 1992 becomes relevant bringing about the European Union approx. the same time-frame.

The clock is ticking? Approximately six years plus, on Jan.1,1999 the Euro$$$ is introduced to the European Community. Timing is everything [9-11 occurs ~two years later, with a boat-load of warnings???], or is it a grand master-plan by the [TPTB?]  NWO? Ironically, ten years [~2009] later the EU almost fails because of the U.S. Financial debacle,... dragged down/up by the FRB and the TBTF's? How quaint?

Finally, the date is May 3,2012, and at present it has been approx. thirty-three years since the USSR's invasion of lowly Afghanistan. Thirty-Three Years my friends, which brings me to my final thesis [whoa there cowboy ;)]. Was the Euro$$$ and the EU designed to fail, and if so what could have been the motive? Here's a clue. The 'Euro$$$/EU' was designed by 'TPTB' to bring about a "One-World-Currency", period! With China's current problems being political and monetary, along with the Arab Spring about to blow-up the ME, and not to forget the BRIC's [?],... the U.S. FRB will print to infinity and beyond. There doing it now, and there ain't no-one gonna be able to stop them until the NWO get's their manifesto accomplished.    ___  [and please, for God"s sake, don't kill the messenger]

jmo

thankyou tyler    

 

Thu, 05/03/2012 - 17:55 | 2395317 SILVERGEDDON
SILVERGEDDON's picture

The only paper I own is the stuff I wipe my ass with. Market paper is worthless, because I cannot do a good job of wiping my ass with it. Gold was worth $28.00 an ounce when I was a kid. Silver was worth whatever was printed on the coin you spent. Any one think those days are coming back? All of the lying bum fucking aristocracy of the Age Of Paper Power can burn in their paper suits soonest. I won't even bother pissing on them to put out the flames. I collect gold, silver, lead, copper, real dry powder, food, tools, diesel fuel, and other useful commodities. There is a community of folks all doing the same, so skill sets and extra eyes and hands can guard each others sixes. Time for a Jim Morrison moment, and "break on through to the other side, break on through to the other side, YEAH

Yeah, this is a repost of my opinion, and attitude. BUT- if enough folks think longer and harder about covering their asses rather than watching Snookie and/ or whatever other brain cancer vomit is playing on network brain washing TV, then my work here is done. Be mother fucking prepared, bitchez.

Thu, 05/03/2012 - 18:04 | 2395334 Pooper Popper
Pooper Popper's picture

I love snookie!

Modern American Women

Thu, 05/03/2012 - 19:08 | 2395447 gmrpeabody
gmrpeabody's picture

if enough folks think longer and harder about covering their asses rather than watching Snookie and/ or whatever other brain cancer vomit is playing on network brain washing TV, then my work here is done. Be mother fucking prepared, bitchez.

You seem to be a little stressed out. I assume it's not anything to do with American Idol voting out your guy.

Thu, 05/03/2012 - 21:31 | 2395633 SILVERGEDDON
SILVERGEDDON's picture

I pulled the plug on network TV back in 2004. Nothing worth paying for. Internet, and Netflix cost less, combined. See you in the movies, cable bitch.

Thu, 05/03/2012 - 18:23 | 2395379 silvertrain
silvertrain's picture

I dont count my Silver in Dollar or any other paper terms, just ounces for now...

Thu, 05/03/2012 - 18:41 | 2395414 orangegeek
orangegeek's picture

Looks like bearish count has held with spot WTIC.  Could mean that WTIC is on its way below $70 per bbl.

 

http://bullandbearmash.com/index/oil/daily/

Thu, 05/03/2012 - 18:43 | 2395416 Joe Mama 3
Joe Mama 3's picture

Dude, if you wipe your ass with paper notes, there will be more shit there than before. Ya know, like cleaning the mouth of the bottle of Ole Janx Spirits with a dirty ass towel !!!!!!!!!!!!!!!!!!!!!!!!

Thu, 05/03/2012 - 21:33 | 2395640 SILVERGEDDON
SILVERGEDDON's picture

Dude, put down the bong, and, like, re read the sentence. I said market paper and fiat are worthless, because I can't even wipe my ass with it ! Okay, now take another hit, and answer the door. "Dave's not here, man.................."

Thu, 05/03/2012 - 19:14 | 2395451 ebworthen
ebworthen's picture

Sector rotation getting fierce.

Wonder what the algos are buying now, nat. gas?

Obviously not Green Mountain Coffee or AAPL.

Wonder when Chipotle will get the sledgehammer?

Then, it will be back into oil and PM's and utilities, or pork belly's, or financials.

Rest assured the HFT Investment Banks will get the QE3 heads-up from Ben and the boys a week before the day before rumor.

Thu, 05/03/2012 - 20:32 | 2395549 Change-In-Trend
Change-In-Trend's picture

 

TIME CYCLE ANALYSIS
  • We have been down day the last couple of days as the cycle progression chart forecasted which has enabled me to close my short position at a small gain after sideways consolidation.

  • I have now taken a small long position into Monday on anticipation of a reversal to the upside.

  • It is now possible that the initial projection for a low into the 6-8 May time frame will now be a high. 

  • The low was initially projected after analysing the individual stock & ETF cycles within the context of a Gann Master Cycle which i do not show. 

  • WD Ganns cycle also appears to have inverted and is now in confluence with the other individual cycle progression charts for a high into this timeframe 6-8 May.

  • With French elections over the weekend the iShares MSCI France Index EWQ is showing strength into 7-8 May.

  • Here in Australia the recent interest rate easing by the RBA is an indication that they want inflation. Generally the Australian government is no different than any other in terms on manipulating official interest rate figures, however in Australia with the economy propped up by the mining boom and overseas investment in this industry, interest rates have historically remained high when compared to other developed countries. Therefore the RBA has had no need for quantitative easing as a means of lowering interest rates, the RBA have just lowered them and the banks have drip fed easing through to households and businesses. So what's my point, well the doctored CPI figures are contrary to energy, food and clothing inflation that is beginning tot take its toll on households. Lowering interest rates will only stimulate more spending thus increasing price inflation. So it is of my opinion that we are moving into the final stages of a stock market fuelled by global inflation in commodities, so for the time being it may well be worth switching to energy stocks which at the height of inflation may well turn parabolic.

 

 

https://www.dropbox.com/sh/s22nwpm85xk9x0b/J0CPgRkShy

To subscribe email change.in.trend@gmail.com

Thu, 05/03/2012 - 21:35 | 2395645 SILVERGEDDON
SILVERGEDDON's picture

Translation - " BUY THE FUCKING DIPS, BITCHEZ !!!!!!!! "

Fri, 05/04/2012 - 02:06 | 2395948 DutchDude
DutchDude's picture

buying... 1oz gold, 50oz silver, 3 month's of saving but hey; i'm laughing :D

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