Equities Rise On Low Volume Tide As Broad Risk Assets Tread Water

Tyler Durden's picture

Slow Day. S&P 500 e-mini futures, stumbled early on by some 'reality' from Merkel, recovered to the magical 1315 level that has seemed so important in the last few weeks. Broadly speaking risk-drivers were either weaker or went sideways in narrow ranges as Energy, Financials, and Discretionary high beta pulled stocks higher. From yesterday's equity day-session close, oil is unch, copper down modestly, Gold down more and Silver down the most as the USD limped very quietly lower on the day (interestingly divergent as AUD and GBP strength was enough to balance the EUR weakness). Treasuries went sideways to modestly higher in yields by 2-3bps. Stocks outperformed (once again) from around the European close - pulling notably away higher from CONTEXT-based broad risk perspective but, just as with the last few days, financial weakness into the close led the broad indices into a decent nose-dive back towards VWAP right into and beyond the bell (on heavy volume and larger average trade size). It's getting old. VIX fell less than 0.5 vols and surged up to nearly 20% at the close (as stocks dumped giving up almost half its day-session gains) as total day volume was weak, average trade size low, and intraday range the lowest in 2 months. HY and HYG underperformed stocks (we suspect as the LT convergence reduces the push into HYG) and we are seeing IG-HY decompression pick up a little.

The early Merkel moment (red oval) was fully recovered but it seems gold and treasuries more in sync on weakness than stocks and the USD as we pushed higher...

Stocks gave back some of their gains into the close but it was the major financials that appeared to be looking for the exits in a hurry (aside from JPM's outperformance)...

Dispersion in FX is probably the biggest story of the week as the dispersion between GBP (+0.33% this week) for example and EUR (-0.62% this week) in this chart as JPY contonues to strengthen on carry unwinds...

and Commodities generally lost ground from yesterday's day session close with Silver roundtripping on its high-beta exuberance (as Merkel spoke)...

in summary, stocks outperformed in a very standalone manner relative to credit and broad risk asset classes on the day. Correlations fell as equities rallied away from risk value and VIX remains notably below its credit/equity fair-value here. The divergence between risk and stocks started (once again) just around the European close and it appears few liked the idea of holding too much overnight as we rapidly tumbled into the day-session close.

Charts: Bloomberg and Capital Context


Bonus Chart: just for fun, ZNGA's momo-crushing plunge today (as the charismatic CEO shared his wisdom on value creation)...


Bonus Bonus Chart: The NYSE Composite index appears to have a big hang-up at the 7750 level - which just happens to be around the Lehman levels...

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l1b3rty's picture

Everyone is waiting for the eu summit...



SilverDoctors's picture

Not a totally slow day Tyler, UK's Sky News is reporting:  Huge Worldwide Cyber Bank Raid Ongoing- Estimated €2 Billion Stolen

Apparently McAfee and Guardian Analyticshave discovered the breach, and Euro-zone, UK, and US banks have been affected.

Perhaps an extension of RBS/ NatWest woes?


hugovanderbubble's picture

Excellent analysis as usual, 



Rainman's picture

It's been a fucked up quarter for pigmen and pimp bonuses.....but they still gots 3 trading days left.

blueskies123's picture

So, more algo trades based on strong housing data this morning (which was nothing) ?

There was nothing for the markets to go up today, I'm guessing more pumping up thanks to ongoing TWIST/ZIRP/QE INFINITY?

what a joke

lolmao500's picture

Silver, always getting screwed the hardest...

Conman's picture

Just another muppet wealth transfer day. buy into the weak rally then get the rug sold out from underneath you.

prodigious_idea's picture

Off-topic but very timely:  Audit the Fed bill gets House vote tomorrow.  Write you Congressman.  Petition here: http://www.auditthefed.com/

kalasend's picture

I'm sure this has been asked before but, what makes up "CONTEXT"? Hints would be nice...

Motorhead's picture

Charts, bitchez!

Cursive's picture

It's getting old?  Yes it is, but not for much longer.  I can't think of anything I am more certain of happening, and have been more certain of happening for the last 3 and a half years, than the depressing return to SPX 666 and the social mayhem that will assuredly follow.  It is almost upon us, good friends, less than a year to 18 months away.

XOFnews's picture

Breaking news! When euro and usa agree to financial services transaction tax, HFT volume moves to asia and today's Equity volumes will look like Niagra Falls' liquidity.

chistletoe's picture

Meanwhile, the "other" yellow commodity continues its breathless climb,

because it is more sensitive to the heat index than the interest rate index .....



slewie the pi-rat's picture

bonus bonus poker!

great chart!  the DOW30 isn't the same index over these few years

be interesting to see how volatile the NYSE listings themselves have been

when you take out the shit (delisted @ <$1 share) and put in (list new) stuff you think might help and the composite doesn't do better?   ruh-roh!

well, after inflation, ya just thank yer lucky stars ya broke even...

chump666's picture

Asia is bid that is all you need to know. 

Sqeeze is on...

slightly pitiful

slewie the pi-rat's picture

been a pretty slow year, really,...

and maybe getting slower no matter how the hangSeng is bid today

or maybe getting a wee bit faster

pretty exiting (is that spelled write?)

fiddy pence haff pound's picture

I've learned that if you believe Max Keiser or King world news when they say 

'gold's going to a million, tomorrow'

then you'll believe anything.They're forgetting: the market is manipulated! When do you think that's gonna stop? not tomorrow, anyway.

What I've noticed is that gold , even with manipulation, had a good growth rate.


now gold and silver are on negative growth for the last 6 months, so I'll hazard a guess:

The manipulators are on their last stand, because they can't let gold move , at all. So, Death-by-Moody's might happen, as a black swan,

blowing gold 'up to a million'.

Which means that the oligarchs better start a war soon.

Oh, that would be Syria!

Don't look at Wall Street. Look at Syria go boom.