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Equities Close Monday's Gap Down On Lowest Average Trade Size Of Year

Tyler Durden's picture





 

CRAAPL taketh and Draghi giveth it all back. The question remains - given all the front-running anticipatory moves on the back of jawbone after jawbone, will ECB/Fed action have anything but a brief romance with higher prices when/if it occurs? The S&P 500 pushed up to fill its Monday opening gap-down on a reasonable volume day (heading into T-3 from month-end shenanigans) but the participation is absolutely not what one would expect if this was belief with S&P 500 e-mini futures seeing their lowest average trade size of the year. Gold was a winner again as the USD was sold against everything. Treasuries gave back some of their gains - yields leaking higher by around 3-5bps at the mid- to long-end. Credit and equity stayed largely in sync but the former was quiet and likely being reracked more than traded as it gapped at the open and stayed there. Stocks took off from their broad-risk-asset peers from the day-session open, retested VWAP, then pushed back to highs into the close - ending well above risk-assets' view of the world as correlations fell modestly. VIX ended the day down 2 vols at 17.5% but was unable to close the gap to Friday's close like stocks - which closed (rather coincidentally, given month-end, at June's closing price)

Lower pane is average trade size for the S&P 500 - today was the lowest of the year - suggesting very little professional participation... ES remains in this fibonacci retracement block which feels very much like a correction in a downtrend...

 

Gold remains pushed higher as did everything else on Draghi's words...

 

and equities pushed into a world of their own this afternoon relative to a relatively highly correlated risk asset proxy...

 

Charts: Bloomberg and Capital Context

 


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Thu, 07/26/2012 - 16:14 | Link to Comment veyron
veyron's picture

cobwebs are forming on my server ... that's how boring the state of affairs are 

Thu, 07/26/2012 - 16:23 | Link to Comment derek_vineyard
derek_vineyard's picture

the bears have already capitualted several times, where's the crash?.....is this the new normal? 

Thu, 07/26/2012 - 16:27 | Link to Comment The Monkey
The Monkey's picture

The central banks are back in town promising positive FX translation effects, low cost speculation, etc.

No reason to go short in front of the central banks, in and of itself a reason to liquidate long positions.

Thu, 07/26/2012 - 17:49 | Link to Comment GernB
GernB's picture

It's hard to bet on a bearish outcome when a drop in the markets could eaily lead to QE3, which would push prices right back up. Even that line of though makes it hard because people front run any hint of QE making betting on a decline a risky proposition.

So far, despite the talk, this is not a bearish market and the not-so-hidden assumption is that everything will work out. Bearish is when you see headlilnes like "death of equities" and concensus is the market is never going up. I'm convinced that won't happen until investors see a big drop despite QE. Big enough to make them question whether easing will work.

Thu, 07/26/2012 - 16:15 | Link to Comment Silver Bug
Silver Bug's picture

QE to infinity. That's all you need to know in this market.

 

http://silverliberationarmy.blogspot.ca/

Thu, 07/26/2012 - 16:16 | Link to Comment saturn
saturn's picture

End of month = window Draghing

Thu, 07/26/2012 - 16:27 | Link to Comment derek_vineyard
derek_vineyard's picture

ipod fucked its window and everything is fine already

Thu, 07/26/2012 - 16:18 | Link to Comment Jlmadyson
Jlmadyson's picture

We got a true worldwide scale motherfreaking MAGIC show going on.

Draghi and Benny Boy Bernake TAKING OVER THE WORLD SON!

Get your front row tickets next week!

They shall not disappoint!

Thu, 07/26/2012 - 16:18 | Link to Comment penexpers
penexpers's picture

STATIST PARADIGM: PLEASE COLLAPSE.

Thank you,

Penexpers

Thu, 07/26/2012 - 16:19 | Link to Comment Cdad
Cdad's picture

Earnings misses everywhere...and the SPY and ES happily trundle upwards as if nothing happened.  WTF?  I guess there is the "nonmarket" of stocks...and then the proxy market of ETFs.

Total disaster in the making.

Thu, 07/26/2012 - 18:12 | Link to Comment GernB
GernB's picture

Yes. total disaster. Especially because the markets are not telling companies and investors the truth, they are telling them central banks will make it all OK. That false sense security convinces them that high eranings multiples are reasonable and leads to people thinking its reasonable to be a few percent from the all time highes, even as the economy goes south.

Thu, 07/26/2012 - 16:20 | Link to Comment FuzzyDunlop21
FuzzyDunlop21's picture

Faceplant! Another good day to be a FB hater

Thu, 07/26/2012 - 16:31 | Link to Comment derek_vineyard
derek_vineyard's picture

do the opposite of everything you think is rational.....this seems too logical, i better buy some face-splat

Thu, 07/26/2012 - 17:32 | Link to Comment Village Smithy
Village Smithy's picture

That may end up a winning trade as no doubt it is being set up for a giant short squeeze.

Thu, 07/26/2012 - 16:50 | Link to Comment fuu
fuu's picture

The kids today with the names.

Thu, 07/26/2012 - 16:23 | Link to Comment Piranha
Piranha's picture

All that the talk from Bernanke and Draghi is gonna give us is to complete the right shoulder of head and shoulders pattern - then we're going down.

I dont see Draghi come out tomorrow with the same message, although that would be funny.

Thu, 07/26/2012 - 16:24 | Link to Comment the not so migh...
the not so mighty maximiza's picture

I have no doubt, he will probably wear the same underwear for good luck.

Thu, 07/26/2012 - 16:23 | Link to Comment Ineverslice
Ineverslice's picture

Yes,  more COFFEE... that's the answer.

Facefooked.

Thu, 07/26/2012 - 16:27 | Link to Comment JustObserving
JustObserving's picture

The Bernanke put is working.  

It is not a market anymore - It is the Bernanke-Draghi show.  How long will it last?  And how long can they throttle gold and silver?

FB at 24.50.  Bernanke better print a trillion or two.

Thu, 07/26/2012 - 16:29 | Link to Comment Jlmadyson
Jlmadyson's picture

Yea better make it 2 haha.

Thu, 07/26/2012 - 16:34 | Link to Comment John Law Lives
John Law Lives's picture

Let the Eurocrat, Super Mario Draghi, craft a feasible plan to create millions of good new jobs in the EU.  Then he might establish some credibility.  Printing money does not beget sustainable economic growth that outpaces the growth of debt.

100% DRAGHIFUBAR

Thu, 07/26/2012 - 16:46 | Link to Comment hugovanderbubble
hugovanderbubble's picture

SHORT MS

Thu, 07/26/2012 - 17:06 | Link to Comment TheCanimal
TheCanimal's picture

Merrill did a nice ipo on EOPN this morning pricing it at 15.  Closed underwater nearly $2 a share.  Attributed to market conditions as Dow was only up 211 points.

Thu, 07/26/2012 - 17:24 | Link to Comment dragoneyes74
dragoneyes74's picture

Wheter it's tomorrow or early next week, I'm thinking we get one more small run-up in the risk-ons to test the recent highs, and then that's the top for a little while.  I fully expect nothing to happen out of the Fed next week, which should help with the selling, but have no idea what nonsense will come out of the ECB.  And since I'm fading all the spikes, I'd appreciate it if Merkel could drop us a headline from vacation. 

Thu, 07/26/2012 - 19:34 | Link to Comment ATG
ATG's picture

With gold targeting $1460,

the only place found traction was overnight options, account + 6.8 times so far since began posting trades in real time on 2 July 2012, no guarantee for future, maybe better:

http://richcash8tradeblog.blogspot.com/2012/07/rich-cash-overnight-options.html

UVXY targeting 4 and currently long GM calls... 

 

Thu, 07/26/2012 - 21:40 | Link to Comment carefreemanjoe
carefreemanjoe's picture

Looks like Bernank+Draghi are working on the impression that HIGH stock market = prosperity + good economy. This only helps the Rich get Obesely Rich. Contributes zilch to Job creation and better standard of living for ordinary people. This can only lead to a disaster of tsunami proportions when the "can" can no longer be kicked down the road any further. All Draghi said is that the Euro will last but that does not mean than many countries will not pull themselves out of using Euro as their currency.

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