Gold Outperforms But Hilsenrath-Rally Fails, As VIXophrenic Equities Converge To Bonds YTD

Tyler Durden's picture

Pathetic. A late day surge to test yesterday's lows and VWAP (which makes some technical sense) was buoyed by positivity from yet another Hilsenrath 'hint'. The total lack of response in the afternoon as German and Spanish FinMins tried to jawbone us up was the reality. We do note though that all the 'Hint' managed to do was get us back to VWAP - which suggests that 'the force is weakening with this one'. The S&P 500 and the 30Y Treasury Bond almost converged in performance year-to-date today as the entire TSY complex saw new all-time record low yields (bullish?). Gold put in a decent surge to the highs of the day into the close (but remains fractionally lower on the week - which is decent considering the USD is up 0.55% on the week). Copper lost ground but Oil and Silver ended unch though well off their lows. VIX closed at one month highs, reversing yesterday's malarkey ending the day 20.4% up around 1.75vols and much more in line with equity/credit. The Hilsenrath-rally helped steer financials to the best performers on the day (though still -0.3%) but as soon as cash closed ES limped back down. SPY pushed well ahead of its ETF peers into the cash close but in general ES caught down to broad risk-asset dysphoria. Now everything hinges on CRAAPL.

YTD equities and bonds have converged...

 

The Hilsenrath-rally drove cash equities nicely into the close - upper left chart - but rates/vol/credit did not follow suit. VIX finally pushed up and met its equity/credit-implied reality (lower left chart) and stocks caught down from their late-day surge yesterday with broad risk assets (upper right chart) and cross-asset-class correlation (while noisy) has picked up more systemically...

 

Meanwhile, ES managed to test yesterday's lows and VWAP (thank you Hint-enrath) but then failed and turned lower...and just to be clear - once we hit VWAP, heavy and large block size selling volume hit the tape - surprise!! ES also managed to escape the dreaded close below 50DMA

 

with Gold the only winner on the day...

 

Charts: Bloomberg and Capital Context

Bonus Chart: GM hit $18.85 at its lows today, and as we noted earlier the market is seeing straight through all the channel-stuffing. What is most peculiar is that OLDGM fell off its cliff at $18.83 and never looked back until bankruptcy - what a happy coincidence...