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Financials Lead Stocks Down As Futures Volume Stays High
Friday was the most active day in ES (the e-mini S&P 500 futures contract) since 12/16 and today saw volume once again surge in the futures market as it tested 1300 for the first time since 7/28. However, NYSE stock volume (which managed a very late-day spurt on Friday) was dismal once again today (for instance -25% from Friday with 3 minutes to go) with once again an extremely late jump taking it back to 'normal' for the year so far (but still dramatically low compared to previous year 'norms'). Stocks rallied on China GDP and an optically decent Spanish auction but as we moved into the European close, risk started to leak off and accelerated in the afternoon as IMF headlines, LTRO rumors, and IIF/PSI chatter hit though more expansive ECB seemed to stall losses at last night's ES re-open levels. ES is down very marginally from Friday's late-day ramp close and credit outperformed today (though HYG hung in with stock's weakness) as financials underperformed. The majors were the worst performers with Citi and BofA giving decent amount of YTD gains back. EUR stabilized post-Europe (after selling off into their close) with the USD (DXY) down 0.4% from Friday and GBP underperforming. In the face of the USD stability this afternoon, commodities were mixed with Oil spiking back over $100 (as NatGas was crushed), Copper leaking off but holding gains 2%-plus gains from Friday (China), as Silver and Gold lost their earlier gains (3% and 1.5% at best) to end around 0.75-1% better from Friday's close (still a double on USD weakness). Treasuries closed marginally lower in yield from Friday (1bps max) but were 4-5bps lower in yield from around the European close (as 2s10s30s slid also). Stocks closed well below broad risk assets as FX carry never really joined the derisking craze and oil's strength seemed divergent for now.
Credit stayed better as stocks leaked off this afternoon though HYG held in on the derisking.
Financials underperformed today with XLF down 0.69%, Utilities second at -0.09%) and the rest of the sectors better on the day clustered around 0.25%-0.75% as Energy outperformed (even as NatGas was crushed). Most of the major financials (above) have compressed back to a narrow range of outperformance but BAC remains significantly outperforming (though well off its highs from last week). All but BAC now trade within the first day of the year's range.
FX markets were stable this afternoon (orange oval) after leaking lower through yesterday and this morning (lower for USD that is). GBP (cable)is the worst performer against the USD while SEK is best and JPY remains stable once again.
Credit and interest rate markets were decidedly more risk-on this morning than stocks (as seen in the upper left chart above) but TLT rapidly came back (rates fell) and credit reverted with VXX limping up (and VIX pulls up towards our credit implied expectation - lower left chart). The resyncing ofthe SPY-VXX-HYG-TLT foursome is notable when compared to the significant dislocation between stocks (ES) and broad risk asset drivers (CONTEXT upper right chart) as correlations broke down rapidly in the sell off (lower right).
Gold remained above $1650, though off its best levels at a highest since 12/13 as it touched above its 50DMA and retreated (but held above its 200DMA). Oil is the only commodity of the more economically sensitive ones we track that ended at its best as Copper, Silver, and Gold all exhibited a similar pattern of rollover as the day wore on.
Following our earlier discussion of VIX, vol rose quite notably into the close and we specifically highlight the fact that implied correlation (the relative demand for index/macro vol/protection) is at its highest year-to-date over 79%.
Charts: Bloomberg and Capital Context
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At some point gold will explode. Of that I have no doubt.
Or you can buy tech and CREE which is completing its round trip from 20 to 60 and back to 20. I think Robot likes tech stocks. :)
Robots love tech. tech has alwasy lead the mutants up and down.. though the futures seem to be the new *pony to ride - http://hedge.ly/yR4JVf
been waiting for said 'explosion' for almost four years now...
Just yet another look at shadow banking's timed propping/ramping creating the illusion of "health", while concurrently the MSM takes the illusion and makes it "real". Why, just ask Cramer and Bob Pissani...all's great!
"What's important here is..."
Oh man...I always HATED those words out of that tool's mouth 10 times a day. Thankfully here...a BlowHorn[CNBC] zone finally. Ah, the peace.
VIX closed above 20 day for whatever it's worth.
Came here to say that. I think it's worth this much http://finance.yahoo.com/q?s=vxx&ql=1
It was a weak session. Asia's ridicules meltup earlier created a bulltrap for it's self. Gas got crushed, oil bid, USDs should be bought up again on mass (Asia's now fav currency dur to an inflation hedge - their currencies are sh*t) next few hrs on the dip
This market is running on air and expectations of liquidity. The bear cycle of stock selling should start from Asia now.
That will be our volatility cue.
...cause Asia is about to be hit with brutal inflation, our fav place China. They are done.
Could you stop posting your regular junk on China? Your dollar is a pile of shit currently on the life support of the Chinese proping up your stupid Ben Helicopter and his pathetic Fed
I watch it everyday USD buying out China and India. You are not propping anything up, what you are doing is hedging against your bullsh*t governments claiming inflation is under control....and it's not. At the rate of USd buying from China/HK would indicate that you could be moving into hyper-inflation. Like Brazil in the early 90's. They mad bought USDs and dumped the Real.
Watch your region coming session. Money on USDs are bought and equities are sold...the CNY fix should be lower will start the outflow of your crap currency.
Sell USTs do it! Who cares, I would love to short US credit markets. Push interest rates up.
You watch porn everyday and you would become a porn star as a result of it. Was that what you were saying? Talking about miscalculate inflation, US gov is the mother of joke! they don't get food price, house price, energy price priced in...just like your phoney unemployment figures and record high food stampers. Yeah! Because average Americans can only afford buying food with foodstamps but not with USD they earned themselves, that's why your food inflation is so ''low''.
Buying USD? Yeah, why isn't your Ben Helicopter raise the rates once it for all and Stop the fucking QE so that there would be truly a SUPER BULL on US dollars eternally? Opps. I forgot that would finally collapse the US bond market and Wall St. revenue which was declining at a record pace and destroy the NEW CLOTHES.
Your bloodY country is having a trade deficit with China and it's even widen in the beginning of this year. You are hedging a Hyperinflation not your local Wallmart who sells everything including your stinky underwear too?Good luck with that nonsense.
CNY just conquered the UAE today, Sorry for your pathetic USD to lose its game. Dump people can buy as much as dollar they want, they still lose big and bankrupt themselves eventually
Relax, yeah I watch porn but I aint a porn star.
Just a dirty trader. Look, I know people in the middle east, China/Asia. You are ALL addicted to USD funding. Especially your companies. Yes the FED is a very dangerous institution as is the ECB.
China should grow some f*cking balls and sell it's USTs, do it! Drive interest rates up! You cheap f*ckers love the USA consumption cycle. Don't you! You are as part of the bullsh*t as everyone else.
We are kinda are all doomed. So sit back, make some cash, maybe get laid I dunno your deal. Anyways the moral is we have ALL been gamed by our a-hole governments.
That's it.
:)
Commentary to plan for the future...Brought to us by: My Main Man!
Lay's it out there...Right?
REITS just keep getting ramrodded higher. Same pattern every single day. Open up with a sell off, someone straps an ACME rocket to them, they drift back down to parity, then the booster rockets fire, then back up...
I don't know what purpose there is to keep running them up and up an up. But, 'someone' sure as hell won't get their hand off the joystick.
It seems like a lot of positive expectations are already baked into equity prices, and heaven help those who disappoint. Case in point: KGC and RRD gave weak 2012 guidance today and promptly got bombed out. It seems easier to open new short positions than new long positions at these SPX levels.
Hmm, I track ES volume every day and I had it much lower than the previous full trading day and just average vs the previous 10-day avg.
Said another way: The market gapped higher and couldn't attract many NEW buyers to push the farsical sham higher.
Praise be to the central banking do-gooders, for it is right to give them thanks & praise. (After all, they're keeping it rigged to make us all feel better)
http://investmenttools.com/images/wfut/crb/bdi_sp_log.gif <- SPY and Baltic Dry, just interesting.
Greed - Pump Up The Volume
http://www.youtube.com/watch?v=mMbIIqeIQ8A
I received some beautiful silver today, bought at the lows.
I lost it while ice fishing; never mix Brandy, a hole in the ice, and fingering Silver.
It was beautiful though; shiny, hefty, real.
Sorry for your loss. You should be more careful when fondling your precious metals near open water. Remember what happened to Isildor.
Sustainable rallies must include the financials. This rally will eventually be completely erased. Here is a look at the SPX, TNX, HG, CL, and AUDUSD. These are some very important charts. bit.ly/AlRxjr