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Gold And Silver Outperform As Volumeless, Rangeless Equities Drift Lower

Tyler Durden's picture




 

Equity markets traded in an extremely narrow range once again today with NYSE volumes dreadfully low. The USD, Treasury yields, and the S&P 500 in general tracked each other well all day. Gold swung from underperformance to outperformance and stocks lifted into the close to try and catch-up - as well as manage a green close - they failed (except the Dow - with CAT and MCD accounting for 14 of the 11.5 point gain on the day). AAPL closed above $702 (of course it did, silly) but NASDAQ was unable to make hay off of that. VIX remained under pressure and stocks reverted to catch down to it. The USD strength (+0.5% on the week) was ignored by Gold ($1770 - unch on the week) and Silver ($34.75) which had solid days but Oil ($95.50) kept sliding - below yesterday's spike lows. JPY's risk-on sell-off on BoJ news was also shrugged off by the equity market. With Staples and Healthcare outperforming and Energy and Financials laggards, as we noted earlier, the sectors post-Fed have converged rather dramatically - as TSYs have retraced much of the post-Fed move.

 

Gold has been the wildest mover this week (aside from Oil) among the major QE asset classes - which have generally trended lower in risk-off mode...

Treasuries have rallied back down and covered most of the FOMC-day spike higher yield moves. The long-bond remains 8bps or so higher in yield still - as inflation breakevens continue to hold gains (but are leaking back with stocks)...

 

It seems the market is making up its mind on what impact QE will have - Utilities remain the underperformers (no need for safety now Ben has our back); Consumer (Staples and Discretionary) have been segregated lower - it seems there is little confidence in their ability to benefit from Ben's benevolence; but the rest are all anchored together hoping for some systemic lift...

 

Commodities are generally trending higher (which is odd given USD's strength) but Oil is bucking that trend on SPR rumors - what the government giveth they can taketh away we pre-suppose...

 

as the S&P 500 drifts lower to catch down to VIX...

 

Charts: Bloomberg

 

Bonus Chart: There were some epic Flash Smashes today in RDC, NOV, ESV, TDW, CAM - this is becoming absolutely ridiculous...look at the volume!!!!

RDC as an example...

 

and NOV...


 

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Tue, 09/18/2012 - 16:35 | 2808396 IndicaTive
IndicaTive's picture

Gonna get me a Sino Japanese Friendship Gold piece. Seems oh so appropriate.

 

http://www.apmex.com/Product/11385/1987_1_20_oz_Gold_Chinese_Panda___Sino_Japanese_Friendship.aspx

Tue, 09/18/2012 - 16:35 | 2808415 Mr. Fix
Mr. Fix's picture

It's good to be in gold & silver now.

Tue, 09/18/2012 - 16:38 | 2808425 Long-John-Silver
Long-John-Silver's picture

It's been good to be in Gold and Silver for at least 5,000 years.

Tue, 09/18/2012 - 16:59 | 2808489 Mr. Fix
Mr. Fix's picture

You are right.

I stand corrected.

Tue, 09/18/2012 - 17:01 | 2808494 Gringo Viejo
Gringo Viejo's picture

And I stand erected.

Tue, 09/18/2012 - 19:05 | 2808842 Hohum
Hohum's picture

Gringo viejo,

Does gold and silver get you that excited or did you just take Viagra and view some porn?

Tue, 09/18/2012 - 17:02 | 2808497 Debeachesand Je...
Debeachesand Jerseyshores's picture

Buy all you can afford to buy and them some.

Tue, 09/18/2012 - 17:12 | 2808523 Meesohaawnee
Meesohaawnee's picture

yea.. just wait till the CME decides its time to "not" i hear ya. PM the fundamentals support. But im still in since that last debacle where TPTB decided its not a free market.Right or wrong i cant get out of it fast enough. I want no part of what happened May of  11

Tue, 09/18/2012 - 18:38 | 2808774 Texas Ginslinger
Texas Ginslinger's picture

Who cares about volume, really...???

Give me a volatile stock and I can make $$

Volume...smolume....

Tue, 09/18/2012 - 16:34 | 2808399 Jlmadyson
Jlmadyson's picture

Kilduff: Oil's Flash Crash is a Warning to All Markets.

On a side note Knight's algo guy has left the building.

Also Treasury debt dropped $38 billion day over day.

Uhh AIG stock wouldn't have given it anywhere close to that boost and I swear the numbers were off massively for last month with $189 billion monthly deficit.

Some real BS going on with these numbers.

Tue, 09/18/2012 - 17:19 | 2808545 Meesohaawnee
Meesohaawnee's picture

god bless the armed forces but the ones i know. active vets all seem to have a disturbing disconnect from reality. I guess when your in an environment where your trained not to think on your own thats what you get. and for the record the "not thinking on your own".. they confirm it

Tue, 09/18/2012 - 22:38 | 2809597 FreedomGuy
FreedomGuy's picture

Look, I was in the service and most my family. Not everyone in the service is a genius, nor does everyone think and vote alike.

Tue, 09/18/2012 - 17:03 | 2808499 Big Slick
Big Slick's picture

Of course, it IS possible that between 3:50 and 3:51 someone needed $100 billion of drilling equipment and drilling contracts /sarc/

Tue, 09/18/2012 - 16:36 | 2808418 Black Forest
Black Forest's picture

The President of the Bundesbank, Jens Weidmann, has declared that today's money is backed by no tangible assets. "Today's money is not backed by tangible assets more," the Bundesbank president also stated in his opening speech of the 18th Colloquium of the Institute of Historical Research Bank in Frankfurt on Tuesday.

Banknotes are printed paper, embossed metal coins so Weidmann on. "The fact that notes and coins in daily life are accepted as payment has indeed to do with the fact that they are the only legal tender. Ultimately, the adoption of paper money based but primarily on the confidence of the people," said the Bundesbank president.

 

http://www.finanznachrichten.de/nachrichten-2012-09/24626385-weidmann-ge...

Tue, 09/18/2012 - 16:57 | 2808485 Haager
Haager's picture

Hi Schwarzwald, war das der Google-Übersetzer?

Tue, 09/18/2012 - 17:06 | 2808503 Black Forest
Black Forest's picture

Yes, that was a machine translation.

Tue, 09/18/2012 - 17:19 | 2808543 Black Forest
Black Forest's picture

More about the inner thoughts of the chairman of the German Bundesbank:

MONEY IS PRINTED COTTON

http://www.handelsblatt.com/politik/konjunktur/geldpolitik/klassiker-der...

Sorry, no time to provide a translation.

Tue, 09/18/2012 - 16:36 | 2808420 roadsnbridges
roadsnbridges's picture

Reminds me of the dash-for-trash in QE1 days.  Now it's dash-for-the-only-lifeline left (Apfel, silly).

If it moves, jump it!

Tue, 09/18/2012 - 17:58 | 2808660 tradebot
tradebot's picture

if it moves ...jump it.  If it doesn't move, jump it and see if it moves.

Tue, 09/18/2012 - 16:44 | 2808426 divedivedive
divedivedive's picture

Friday is quadruple witching. 

Edit: And apparently Ben Bernanke speak tomorrow.

http://online.barrons.com/mdc/public/page/9_3063-economicCalendar.html?mod=BOL_hps_tnav_market

 

 

Tue, 09/18/2012 - 16:39 | 2808427 tekhneek
tekhneek's picture

Gold, bitchez.

Tue, 09/18/2012 - 16:40 | 2808434 lsbumblebee
lsbumblebee's picture

Nice ping pong match on the silver chart. JPM is fuh-uuucked.

Tue, 09/18/2012 - 19:21 | 2808880 Papasmurf
Papasmurf's picture

JPM is fine.  They are getting a $40B lifeline every month.

Tue, 09/18/2012 - 16:43 | 2808438 GernB
GernB's picture

I find it interesting that gold and silver both spiked this morning, attempting to reproduce "another leg up" just like they have over the last few weeks. Silver barely made it to a new high, in stark contrast to pre-Fed thrusts upward where it made convincing new highs. Gold failed to even make a new high, implying short term exhaustion of the trend.

Tue, 09/18/2012 - 17:02 | 2808496 Gringo Viejo
Gringo Viejo's picture

Is that you Blythe?

Tue, 09/18/2012 - 17:26 | 2808561 tawse57
tawse57's picture

I think gold and silver will correct downwards soon - the run-up has been too fast. I think it will go down, there will be a pause of 4 to 8 weeks and then we will get a parabolic blow-off into next year.

Tue, 09/18/2012 - 17:45 | 2808610 Meesohaawnee
Meesohaawnee's picture

why do people still try to apply TA  to one of the biggest rigged markets in history? and i mean every asset class...Why??

Tue, 09/18/2012 - 17:53 | 2808638 tawse57
tawse57's picture

Who said anything about TA?

I think the markets will go down because Joe Public retail investor is now rushing into gold and silver.

Sometime soon the big boys will decide to take their profits, cream the late entry retail investors and then, when the retail investors are in shock and on the canvas, the big boys will buy more gold and silver pushing the price up further.

Nothing to do with TA. Everything IMPO to do with a rigged market. Can't you see that?

Tue, 09/18/2012 - 18:04 | 2808683 fuu
fuu's picture

"I think the markets will go down because Joe Public retail investor is now rushing into gold and silver."

Pass that shit bra!

Tue, 09/18/2012 - 20:02 | 2809018 DosZap
DosZap's picture

"I think the markets will go down because Joe Public retail investor is now rushing into gold and silver."

eGaysters definitely are,buying Silver like no tommorrow, and at prices WAY over spot ...................

Tue, 09/18/2012 - 20:02 | 2809019 DosZap
DosZap's picture

dupid

Wed, 09/19/2012 - 00:59 | 2809912 Jungle Jim
Jungle Jim's picture

Why? Why is there always the "inevitable" correction? Why does the parabolic blow-off always lie somewhere in the future -- always *next* year (or next *decade*), beyond the horizon, over the rainbow?

Tue, 09/18/2012 - 16:45 | 2808444 Rainman
Rainman's picture

Mexican bonds are considered a safe haven trade. Mexican GDP expected to be double that of USA. No wonder the illegals are scooting back to from whence they came.

Gross losing his peso bond bet.

http://www.bloomberg.com/news/2012-09-18/pimco-s-qe3-distaste-grows-as-peso-bond-bet-fades-mexico-credit.html

Tue, 09/18/2012 - 16:48 | 2808455 youngman
youngman's picture

Well I´ll take door number two....Japan dropped their hat in the QE ring...or should I say the toilet bowl...and ring around the rosie we go....next up the EU..or Britain to announce that THEY will be doing a QE too...all together now...Kum ba yah my lord ...kum ba yah...

Tue, 09/18/2012 - 16:52 | 2808463 Snakeeyes
Snakeeyes's picture

Maybe the US should have encouraged people to rent and buy gold than buy housing!

http://confoundedinterest.wordpress.com/2012/09/18/taylor-rule-and-the-feds-unlimited-agency-mbs-purchase-plan/

Tue, 09/18/2012 - 17:05 | 2808505 Debeachesand Je...
Debeachesand Jerseyshores's picture

Not a bad plan at all.

Tue, 09/18/2012 - 16:56 | 2808481 roadsnbridges
roadsnbridges's picture

I need a feddirect.com site.  Wanna dump some MBS on 'em.

Tue, 09/18/2012 - 16:57 | 2808482 TheLordNorman
TheLordNorman's picture

SilverBitchezzz

never paid a dime to the SS, bought thousands of silver dimes = NO SOCIAL SECURITY FOR YOU!

Tue, 09/18/2012 - 16:58 | 2808487 AldoHux_IV
AldoHux_IV's picture

Regardless of the island disputes, oil drilling will reign supreme once again... more of the same bullshit.

Tue, 09/18/2012 - 17:51 | 2808593 ZeroAvatar
ZeroAvatar's picture

The market is making up it's mind on what effect *QE-INFINI-3*Tm is going to have?

 

Gold and Silver are going up. A lot. Quick.  End of story.

Wed, 09/19/2012 - 01:10 | 2809919 Jungle Jim
Jungle Jim's picture

I sure hope you're right. That's the only thing that might save me, if anything still can.

Today I got a bill from the nursing home for $16,146.08 -- that's sixteen-thousand-one-hundred-forty-six dollars and eight cents -- aaand a pharmacy/med bill for $618 and change.

It needs to happen quick. Otherwise it won't matter. It'll be too late.

Tue, 09/18/2012 - 17:52 | 2808634 XtraBullish
XtraBullish's picture

Never underestimate the replacement power of equities within an inflationary spiral.

 

Tue, 09/18/2012 - 19:19 | 2808872 Pejorative Requiem
Pejorative Requiem's picture

Oh you bet...... the CB's are counting on you counting on it.

Tue, 09/18/2012 - 18:16 | 2808714 Pike Bishop
Pike Bishop's picture

The is fucking eerie. Has the Financial Rapture occurred? I'm not talking about the continuing volumeless equity pit.

Boards of usual suspect have gone sparse of comment and participation.

Is everybody just waiting and holding their breath in silence?

Has QEternity finally imbued the Markets with an overwhelming sense that the Financial Jenga is at risk of nearing its logical conclusion? The point of which is to cleverly stack it higher, so the slightest next move will guarantee collapse.

And now everyone awaits the arrival and move of the final fool.

Fuck this. All possible good news is in and final.

I think I'll check the exit doors to the room, and make sure they are still there.

Tue, 09/18/2012 - 19:13 | 2808862 Pejorative Requiem
Pejorative Requiem's picture

Don't just check 'em, pardner........ start movin towards 'em all quiet like.

Tue, 09/18/2012 - 18:18 | 2808717 Temporalist
Temporalist's picture

Regarding the Chinese steel vaporization the amount of debt associated with it seems to be "$400 billion of debt they racked up during years of double-digit growth."

http://www.reuters.com/article/2012/09/16/us-china-steel-warehouse-idUSB...

Tue, 09/18/2012 - 18:24 | 2808731 Slightly Insane
Slightly Insane's picture

Oil is not in the same class as PM's.  Neither are food stuffs.  With the Saud's wanting Obama as their defacto "best buddy" - they can afford another 1.5 months of low oil ..... and then jack it to the sky.  Romneybus will open up oil across the country, and the Saud's know that.  Who is operating in the interest of the US?  (It ain't the guy with Hussain in his name).

Tue, 09/18/2012 - 19:08 | 2808848 Hohum
Hohum's picture

Slightly Insane,

If you think that Romneybus will lead to bigger gains in oil production than during the Obama Administration, you are MORE than slightly insane.

Tue, 09/18/2012 - 19:59 | 2809011 DosZap
DosZap's picture

Oil is not in the same class as PM's,with what's going on now..........

True, they last forever, but OIL get's burned up.

I would strongly suggest being IN OIL,as well as PM's.

 

Tue, 09/18/2012 - 19:09 | 2808852 Pejorative Requiem
Pejorative Requiem's picture

This post brings to mind an imagry of equities as a cud chewing cow....... no bull!

What did the owl say to the cow......... Why such a long face?

Tue, 09/18/2012 - 19:22 | 2808881 Lost Wages
Lost Wages's picture

Flight to safety on the way!

Tue, 09/18/2012 - 19:27 | 2808894 IMA5U
IMA5U's picture

uh.... 

 

equities finished almost flat

 

 

i guess that's a big sell off for perma bears looking for that glimmer of hope

Tue, 09/18/2012 - 21:17 | 2809309 chump666
chump666's picture

Who will blink first? HFTs doing manic offers, or momo's sitting on longs and waiting for the QEinfinity to start sending this to 20,000 (dow).  With so much risk coming, more so war, in which stocks and bonds will  tank.  I'd say the momo's holding/sitting on longs will blink, HFTs will follow...

The crash will almost be organismic. 

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