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Equities Recover 38.2% Of Sell-Off As Credit Underperforms
Volumes were above average today but well below yesterday's blockbuster as average trade size also pushed higher as we levitated in stocks (ignoring the afternoon rollover in credit markets - which closed at their lows of the day). ES (the e-mini S&P 500 futures contract) rallied (initially on 'expected' jobs data then a veiled QE-reference from the WSJ) to recover the wondrously mystical 38.2% of the last few days sell-off before limping slightly lower into the close. Financials wentr from worst (yesterday) to first (today) but oinly recovered a fraction of their losses as all sectors ended in the green today. Broadly speaking riskj assets drifted up with stocks (led by stocks) but closed in almost perfect CONTEXT by the end of the US day session as Treasuries limped begrudgingly higher in yield (though the curve flattened modestly), FX majors were relatively stable but JPY weakness pushed FX carry up supporting risk overall, and commodities leaked gently higher (outperforming USD's modest weakness on the day) as Silver and Oil outperformed on the day (with the latter back above $106). Gold limped back up to $1685 (juiced by the WSJ QE story) but Silver's high beta exuberance dominated that. Ahead of NFP and PSI the next 2 days it seems like little real rerisking occurred today and the fact that credit underperformed and implied correlation diverged from VIX tells us that under-the-covers, protection was more bid than embracing risk.
S&P 500 futures recovered 38.2% of the last few days' sell-off and we also note the lower pane shows average trade size which has tended to increase over the last few days (especially today around the European close) which is often a signal of professionals selling into strength as opposed to starting a trend.
Credit markets stayed in sync (with each other) today but sold off significantly this afternoon - to close at their lows (wides) of the day. As is clear, equities were ignoring this weakness heading into the close after Europe closed.
VIX dropped (and the term structure stabilized modestly) but we note that as stocks rallied this afternoon (and credit sold off) so implied correlation rose - indicating a greater demand for macro protection than underlying index vol would suggest. This has tended to be a useful short-term turning point indicator.
Charts: Bloomberg
Bonus Chart: AAPL showed some very interesting resistance and support levels today and closed at its VWAP. This rally up to VWAP suggests algos lifting the bid so that block trades could get executed closer to VWAP - i.e. block sellers looking for best execution. Fascinating how recent past VWAP levels can become support and resistance...
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'Bots had the day off.
They're in the shop swapping out the 'crash' card for the 'levitation' card.
And all it took to stage a 38% sellof rally was just 1 QE rumor, and 1 SPR rumor! Wow awesome market they got here.
Irrevocably broken market, Dog. Seriously, there is nothing left. Desperate syndicate members spreading rumors, the Fed floating Zepplins, anything...anything...to get anyone to buy equities.
It is correction time right here. I rather think it will be much larger than the equity pimps are prepared for.
So Ben had enough of the downslide.
What's so new about that?
Get it done Greece , I want to see blood Friday .
Just a flat out embarrassing market session today. Imagine...The Street resorting to yet another "speculative" fervor about QE3 after just one day of market selling? How sad are these guys? How pathetic are these equity pimps?
Fire hose...corner of Wall And Broad...open her up wide.
Oh my, I am laughing my ass off, seriously...HA!
Suck on it like it contains the antedote, bitchez...
it was to be expected based on the descending channel I drew, gives the europeans a great chance to take profits if they choose. sso I sold at end day, put in some shorts with stops, and have some buy orders if it goes the other way tomm. who knows!!!
for the past three weeks tlt has had a lower high, I smell something is up
just a friendly reminder... june contract is front month tomorrow for ES
Reverse Repo bitchez
So... the algobots recognize Fibonacci too?
Fed dictum: All stock market selloffs must be met with widespread rumors of more QE...
100% FUBAR.
Well, tomorrow is CAC day, or not.
Hedge THAT, BitCHez...
"Stocks surge!" That's all that the proles will see and/or care about tonight.
There are more important circuses to gaze upon.
'Le Magnifique' cast in bronze: Lemieux statue unveiled
http://www.post-gazette.com/pg/12067/1215060-100.stmHow about a stroll down memory lane on this gorgeous afternoon?
Mario: We never planned to leave Pittsburgh"We had to do a few things to put pressure on the city and the state, but our goal was to remain here in Pittsburgh all the way. Those trips to Kansas City and Vegas and other cities was just to go, and have a nice dinner and come back."
http://www.pittsburghlive.com/x/pittsburghtrib/s_582923.html
So, moral of this story: Play a sport, extort money from city, get statue of yourself outside building you extorted money to build.
Only in Amerikkka!
For the last 12 months the market has run at a 16 week cycle with plus or minus 4 weeks variation. We now sit on week 19, so the clock is ticking. Sooner or later this is going to end very bad. The market cycle is about to change.
FiboBitchez!
I agree with the cycle change on Friday. The cycle marker nailed Oct 4 bottom and hits again on March 9th. Should be interesting. Strap your lacies on, girls, the ride might be a little bumpy.
rally is over?
http://www.jinrongbaike.com/
http://www.cnhedge.com/