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Gold Outperforms As Stocks Drop and Volume Pops

Tyler Durden's picture




 

For the third day in a row, stocks fell, led by the broad high-beta sectors (as one would expect) with energy (suffering as WTI lost almost 2%), materials, industrials, and financials all down notably (with the majors dominating weakness in the financials - though still up significantly post-JPM-divi). Futures and cash volumes picked up from yesterday - nearing their average year-to-date but average trade size fell further equaling the lowest year-to-date. With the China news (and then Europe), it was AUD and JPY that dominated price action as JPY strengthened and AUD weakened leaving the USD tracking the EUR and ending very modestly higher on the day. Commodities faced another day of torment with Silver underperforming. Gold outperformed but was down on the day still as from mid-afternoon, the commodity complex crept higher as the USD stabilized.  Broadly speaking risk assets (CONTEXT) led the equity market lower into lunch and then stabilized this afternoon - holding stocks off from further deterioration. An up-day for HYG (the high-yield bond ETF) - seemingly on the back of HY-HYG arbitrage more than asset rotation - and the craziness in the vol complex (VXX vs TVIX) somewhat supported SPY on the day but we note that ES (the S&P 500 e-mini futures contract) was unable to break above its VWAP meaningfully the entire day. Treasuries sold off from early in the US day session but only very marginally as 30Y remains -4bps on the week while the rest of the curve is unch to 1bps lower in yield only.

After yesterday's shenanigans with Silver, it remains the biggest loser on the week - and Gold the best performer of the metals/oil complex - though still lower. WTI was a disappointment today as more SPR chatter was a factor but it recovered quickly this afternoon back up almost to $105.50.

The USD remains in a narrow band for the week but the huge divergence between JPY strength (up is USD Strength on the chart) and AUD weakness is evident as carry unwinds and China knock-ons (and Kiwi GDP) gang up to reverse trends for now...

 

ES, the S&P 500 e-mini futures contract, rallied to VWAP (light blue below) an impressive nine-times today as it tried to escape the clutches of the sell-off and each time - as we would expect volume picked up as institutional sellers were 'allowed' to exit.

The blue line (above) also shows a longer-run CONTEXT from before the Treasury sell-off of last week. The chart below shows the fact that we have recoupled (Green rectangle) from the Treasury-driven-disconnect (orange rectangle) suggests whatever the factor was that drove Treasuries off a brief cliff - has subsided for now.

 

We wrote earlier on the TVIX-VIX debacle, but it is perhaps noteworthy that short-dated VIX dropped considerably into the close today from 16.5 to 15.5 - though ended the day higher close to close.

Investment grade credit leaked back wider (from its ridiculously rich level relative to its intrinsic underlying fair-value). High-yield underperformed (against stocks and HYG) as we suggested yesterday that the HYG-HY17 arb was back in play (though it is as likely roll-related technicals as there are plenty of rate-related and call-related differences between the yield and spread based products.

Finally, it appears we have once again broken quite a significant uptrend off the Thanksgiving Day start of this rally. As the chart above also shows (based on 135min bars of the day-session of the ES) we also saw an earth-quake in terms of institutional size 'trades' (lower pane is average trade size) as we broke through the trendline this time.

Charts: Bloomberg and Capital Context

 

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Thu, 03/22/2012 - 16:48 | 2281792 Clueless Economist
Clueless Economist's picture

But..But..Jim Cramer told me last night that things were looking up for retail and the consumer was spending like crazy, because he had trouble parking and waiting in line for the Panera Bread and Olive Garden and Chipolte in Short Hills NJ

Booyahh!!!

Thu, 03/22/2012 - 17:02 | 2281823 MinnesotaMD
MinnesotaMD's picture

That's awesome.

Thu, 03/22/2012 - 17:12 | 2281843 Ahmeexnal
Ahmeexnal's picture

Sarkozy has just announced that anyone who visits ZH will be prosecuted under french law:

http://www.prisonplanet.com/sarkozy-visiting-hate-and-terror-websites-wi...

Thu, 03/22/2012 - 19:14 | 2282068 surfersd
surfersd's picture

Cramer when he wrote for the NY Observer back in the '90s he was bearish internet stocks the whole way up. Got bullish Feb of '00, amazed he still has any money left after all these years. 

On a PM note be aware silver for awhile and now gold have moved / are moving into backwardation, right at  the time that gold is finding support on the weekly trendline. 

Silver bitchez!!

Thu, 03/22/2012 - 20:11 | 2282173 Silver Bug
Silver Bug's picture

Can has a bottom in it. It can only be manipulated down so much on the paper market. Soon as it hits triggers in the low 1600's it pops. That is because Asian buyers have massive buy orders down there.

 

http://ericsprott.blogspot.ca/

Thu, 03/22/2012 - 17:00 | 2281820 spinone
spinone's picture

I wish someone would clean his clock

Thu, 03/22/2012 - 17:07 | 2281833 monopoly
monopoly's picture

Just think what imbeciles run the programming at cnbc to even allow that ass kramer on at 9AM NY time. Has to be one of the worst decisions they have made.

I bet Mark Haines is rolling over in his grave. At least he had a real opinion and tried. Died way too soon.

Thu, 03/22/2012 - 17:53 | 2281944 lunaticfringe
lunaticfringe's picture

God how I love to hate GE and CNBC. Hate can be a very good thing. http://thecivillibertarian.blogspot.com/#!/2012/03/pigeons-have-landed.html

Thu, 03/22/2012 - 21:43 | 2282365 DoChenRollingBearing
DoChenRollingBearing's picture

¨Some bearings we sell in Peru¨

gmail me at my name or Google it to see the pictures and read all about it.

Thu, 03/22/2012 - 17:07 | 2281834 Tsar Pointless
Tsar Pointless's picture

Top=1414.

Monday, March 19, 2012. Exactly 1109 days from the March 6, 2009 low of 666 on the S&P.

And, I've gone over the math before, but you do know that 3+6=9 and that 2+9=11, do you not?

Thu, 03/22/2012 - 18:37 | 2282014 Stanwick
Stanwick's picture

And what is today's count?  Yes I know well. 1111 days from the low. Time my friend, time. And what is today? yeas yes my grasshopper, today is the vernal wquinox. The first day of spring. The sun has recrossed the tropic.

 

Also significant  is that 1,407 SPX number is 741 points up from the 666 low from March 6, 2009.

741 was the low of the November 2008 crash.

Yesterday, we were 1200 solar degrees from the November 21, 2008 low (three years or 1080 degrees plus 120 degrees back).

Also, it is interesting that on the week of the 12th anniversary of the 2000 top that we are 1200 degrees from the 2008 low, which was the low around the world, and the low on many key names.

Thu, 03/22/2012 - 17:29 | 2281887 defencev
defencev's picture

 What an ugly piece full of jargon and, as usual, with no real insight. Who cares whether Gold outperformed:it goes down.

And until Bernanke resume printing nothing going to change. So, you guys totally depend in your investment strategies on Chairsatan (and hugely benefit from printing).

Thu, 03/22/2012 - 17:41 | 2281919 Tao 4 the Show
Tao 4 the Show's picture

Decoupling is important as major equities risk remains. Gold always goes up and down - it's just the overall trend that matters and that trend remains both shocking and revealing. The pattern is for it to rise rapidly above trend and then settle for months back towards trend. That settling gives the impression it is doing poorly - presumably the desired effect.

Fri, 03/23/2012 - 06:03 | 2282804 TWSceptic
TWSceptic's picture

It only goes down temporary , like any bull market there are ups and downs, but the trend remains up.

 

Also you talk like gold bugs "need" money printing. Actually, the economy which is on life support needs money printing, gold going up is just the canary in the coalmine, and people buy it to protect themselves from idiot central planners.

Thu, 03/22/2012 - 17:43 | 2281922 slaughterer
slaughterer's picture

Actually, these pieces are my favorite thing about ZH. Keep em coming.  

Thu, 03/22/2012 - 20:00 | 2282150 CvlDobd
CvlDobd's picture

I agree, good job chartTyler!

Thu, 03/22/2012 - 17:48 | 2281931 kito
kito's picture

the dollar reserve status erosion continues:

 

http://www.bbc.co.uk/news/business-17471095

Fri, 03/23/2012 - 04:55 | 2282781 Pete15
Pete15's picture

Just wait to see the dollar in three years 

Thu, 03/22/2012 - 18:26 | 2281990 Stanwick
Stanwick's picture

I dont see gold outpreforming cash here.

 

......................I'm buying cash, my nig hoes.....hand over fist.

Thu, 03/22/2012 - 19:00 | 2282046 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

good call...do you knw where I can get that close to spot??

Thu, 03/22/2012 - 19:47 | 2282127 Stanwick
Stanwick's picture

Yes

Fri, 03/23/2012 - 00:37 | 2282638 prole
prole's picture

I just came on this thread to get a spanking

Thu, 03/22/2012 - 18:47 | 2282028 A Lunatic
A Lunatic's picture

Guns and Ammo also outperformed.

Thu, 03/22/2012 - 19:23 | 2282086 ffart
ffart's picture

The S&P doing another headfake to the downside. Come on sheeple, load up on SPY puts so we can fleece you again. It'll be different this time we promise! Meanwhile S&P will continue its linear grind to 2000 or 2500.

Thu, 03/22/2012 - 19:27 | 2282091 Clint Liquor
Clint Liquor's picture

Cash will come in handy when a sheet of toilet paper cost more than $1.

Thu, 03/22/2012 - 19:53 | 2282134 SILVERGEDDON
SILVERGEDDON's picture

Paper sucks, you Wall Street fucks! I'll see you vampires in the sun, with my loaded silver gun. Yer goin' down in flames, from Lower Manhattan to the Thames. Your paper is I know not where, I'd rather shit my underwear! For, be there bull, or be there bear, silver is the suit I wear! (With gratitude, and apologies to Dr. Seuss.)

The only paper I own is the stuff I wipe my ass with. Market paper is worthless, because I cannot do a good job of wiping my ass with it. Gold was worth $28.00 an ounce when I was a kid. Silver was worth whatever was printed on the coin you spent. Any one think those days are coming back? All of the lying bum fucking aristocracy of the Age Of Paper Power can burn in their paper suits soonest. I won't even bother pissing on them to put out the flames. I collect gold, silver, lead, copper, real dry powder, food, tools, diesel fuel, and other useful commodities. There is a community of folks all doing the same, so skill sets and extra eyes and hands can guard each others sixes, and "break on through to the other side, break on through to the other side, YEAH "

Thank BIG BUSINESS for lobbying for the opportunity to run the baseball bat up the collective asses of the "American People" every politician talks about. Politicians are wannabe businessmen - but with no talent, and no capital, and no work ethic, so they choose a career front running damage control for the POTB. They are what they are. Might's well get pissed at the raccoon that raids your trash cans. He is just doing what evolution gave him a job to do.

Corporate World Co is your friend - NOT ! They run the show - every one else is cannon fodder at best, or a problem to be eradicated immediately at worst. The new religion of the millennia. Be careful, or you will be branded as a "witch" and burned at the stake. Actually, if you read or comment on this website, you are already doomed, 'cause the fluoride in your water, drugs and pesticides in your food, and poison in the air have not yet eliminated free will, or cognitive thinking, the ANTICHRIST of corporate religion.


Thu, 03/22/2012 - 20:25 | 2282145 DavidPierre
DavidPierre's picture

Perspective.

Take a brief vacation and chill for a few days.  Don't check the prices of Gold, Silver, the mining shares etc., maybe only once a day after the close.  No checking prices first thing in the morning.  So what happenes?  Put it in perspective.

We have already won both mathematically in fact and in reality. This gold war started 99 years ago.  In the 90's, with Gold at $300 and Silver at $5, then it got really stupid.  Gold trading down to $255 and Silver just under $4.  Between 1998 and 2001, life was very difficult.  GATA knew what was going on, they just couldn't totally prove it.  Every time that a Gold bullish event would happen, it would sell off.  Not only would it sell off, it would be hammered.   Do some real soul searching and rack your brain with math and logic: play devil's advocate.  Looked at this from 100 different angles and you'll always came up with the same answer.  Then, along came Jim Sinclair, James Turk's smoking guns, GATA with Frank Veneroso's work and the gutsy truth from John Embry who was considered mainstream.  In other words, after reading enough material to support your own thoughts you'll truly be on to something.

Accumulated metals in various forms, mining shares in various locations and make other personal life preparations.  You have won.  You have already done everything that you can. Don't beat yourself up later for anything that you have forgotten.  The financial collapse and currency event is carved in stone.  Gold gets confiscated: hopefully you own some Silver or numismatics that escape.  If the U.S. or Mexico or Canada or South Africa or any other region were to nationalize their mines, hopefully you have mining shares in an area that is only taxed, not nationalized.

The coming global bankruptcy is going to be so complete, so widespread and all engulfing that as long as you retain one position you will have enough wealth to live on.  Gold and Silver are so under owned on a global basis that even just 100 ounces of Silver may be enough to survive on financially.  Current prices are 6 fold  from where they started.  This in reality is not even Jacks for openers compared to where we are going.  If you are currently only 1 out of the 100 globally who own any precious metals at all, what do think will happen when the other 99 finally figure it out?  The other 99 will be taking their mega ... literally $10's and $100's of Trillions paper balances and chasing in panic form into real money. 

Long term, Gold and Silver have only one direction to go, UP!

Long term may only be 2-3 years, it might be only 6 months...could be two weeks.  No one really knows and it is not important as long as you understand that a revaluation must and will occur.

A little bit of "Zen".

If Gold priced on the paper markets were to drop another $100 or $200 would you freak out?  Were Silver to move into the low $20's would you feel like puking?  If the HUI took another 100 point plunge would it make you give up on the shares altogether?  It does not matter at all what picture they can try to paint for you, realize that they ... the paper system... have already been discredited with Gold and Silver at current prices.  Nothing can be done, no policy can be followed under the existing fiat paper system to change this. 

The end of this fiat system will be no different from the end of every fiat Ponzi scheme ever tried in the past.

The only difference...the size...the magnitude...and the all engulfing nature of this current example.

10 years ago, could you have ever imagined $1,000 Gold or $25 Silver?  You might have had Goldcorp at a buck or Eldorado at .25 cents.  Could you even imagine them trade to $40 or $10?  No you could not, in fact, if these unimaginable levels were to be hit now, it would be called an outright panic!  The bottom line is that your logic is sound and correct.  Don't fret!  Don't second guess your self.  Long term you are right and long term may not be very far into the future.  In fact, long term can be enacted over a weekend or even overnite.  Put in proper perspective, everyone will look back, scratch their heads and wonder with how obvious it was.  Why didn't everyone go all in?  What they won't realize now is that end result will be fashioned by exactly this concept, ... "äll in"!  What is going to and has always happened at the end of every fiat experiment ever tried.  

Is the "all in" natural... everyone dumping paper... getting out at the same time?

This is how fiats become valueless.

Precious metals ... the stuff fortunes are made of!

www.lemetropolecafe.com

Thu, 03/22/2012 - 20:51 | 2282256 disabledvet
disabledvet's picture

Mining stocks. CHECK!

Thu, 03/22/2012 - 22:55 | 2282477 suckerfishzilla
suckerfishzilla's picture

yeah...we won

Fri, 03/23/2012 - 07:34 | 2282843 Northeaster
Northeaster's picture

"The coming global bankruptcy is going to be so complete, so widespread and all engulfin"

WHEN?

Thu, 03/22/2012 - 20:48 | 2282249 disabledvet
disabledvet's picture

How does Jaba the Hut do that laugh again? "ho, ho, ho, ho, ho, ho. He, he, he,he,he, he." and who doesn't love a good laugh?

Thu, 03/22/2012 - 21:29 | 2282316 kill switch
kill switch's picture

OT

But WOW

 

Tal Wilkenfeld,,

 

Wilkenfeld began playing guitar when she was fourteen years old. Two years later she dropped out of high school, saying that "it just wasn't going to work for me",[1] and emigrated to the United States where she studied electric guitar. Within a year she had switched to electric bass.[2] Wilkenfeld graduated from Los Angeles Music Academy College of Music in 2004. After a few months she accepted an endorsement from Sadowsky Guitars; devoting herself to forming a band and composing songs of her own. At 18 she moved to New York City and began making a name for herself in New York's jazz clubs.

Watch this video of her playing with Jeff Beck!!!!Follow you fucking dreams....Even in this economy,, take the fucking off ramp..

http://www.youtube.com/watch?v=blp7hPFaIfU&feature=relatedWe We ended as lovers!! Great tune..She is golden!!

 

 

Sat, 03/24/2012 - 07:53 | 2286029 i-dog
i-dog's picture

Nii-i-i-i-ce find, G! Awesome! (right up there with Jaco Pastorius already!)

... and right back atcha with my favourite Beck choon:

http://www.youtube.com/watch?v=CZXIVMdXsVU

Thu, 03/22/2012 - 22:14 | 2282406 non_anon
non_anon's picture

any surprise in the action?

Thu, 03/22/2012 - 22:41 | 2282437 kill switch
kill switch's picture

http://www.youtube.com/watch?v=6sf_6Pqa2eE&feature=related

I'm traveling in some vehicle
I'm sitting in some cafe
A defector from the petty wars
That shell shock love away
There's comfort in melancholy
When there's no need to explain
It's just as natural as the weather
In this moody sky today
In our possessive coupling
So much could not be expressed
So now I'm returning to myself
These things that you and I suppressed
I see something of myself in everyone
Just at this moment of the world
As snow gathers like bolts of lace
Waltzing on a ballroom girl

You know it never has been easy
Whether you do or you do not resign
Whether you travel the breadth of extremities
Or stick to some straighter line
Now here's a man and a woman sitting on a rock
They're either going to thaw out or freeze
Listen...
Strains of Benny Goodman
Coming thru' the snow and the pinewood trees
I'm porous with travel fever
But you know I'm so glad to be on my own
Still somehow the slightest touch of a stranger
Can set up trembling in my bones
I know - no one's going to show me everything
We all come and go unknown
Each so deep and superficial
Between the forceps and the stone

Well I looked at the granite markers
Those tribute to finality - to eternity
And then I looked at myself here
Chicken scratching for my immortality
In the church they light the candles
And the wax rolls down like tears
There's the hope and the hopelessness
I've witnessed thirty years
We're only particles of change I know, I know
Orbiting around the sun
But how can I have that point of view
When I'm always bound and tied to someone
White flags of winter chimneys
Waving truce against the moon
In the mirrors of a modern bank
>From the window of a hotel room

I'm traveling in some vehicle
I'm sitting in some cafe
A defector from the petty wars
Until love sucks me back that way

Fri, 03/23/2012 - 01:54 | 2282700 nathan1234
nathan1234's picture

There are two possibilities

1) Go with Bernanke, Obama and the US Dollar and the Goldman Presidents of Europe

or

2) Go with Gold & Silver

 

One has to make one's choice

 

My choice is made. I dont want to have anything to do with assholes and crooks

 

Fri, 03/23/2012 - 02:49 | 2282736 StockMarketBott...
StockMarketBottom.com's picture

How to Recognize When A Stock Market Bottom

http://stockmarketbottom.com

Fri, 03/23/2012 - 04:24 | 2282774 ivars
ivars's picture

I wonder if this slight upwards trend confirms the prediction of TEMPORARY GSR increase to 55-56 till May-June I made on March 2 here:

http://www.tfmetalsreport.com/comment/137665#comment-137665

If it does, it will give additional support to green charts in silver and gold price predictions:

http://www.tfmetalsreport.com/comment/132799#comment-132799

http://www.tfmetalsreport.com/comment/145747#comment-145747

Fri, 03/23/2012 - 12:34 | 2283963 MeelionDollerBogus
MeelionDollerBogus's picture

My analysis is that silver moves exponential twice vs time. Gold is exponential once vs time & silver is exponential vs gold. Hence in my scatterplots I display a linear-trend (or several) that are plotted with gold x-axis linear and silver y-axis log-scale.

http://flic.kr/p/aWJ9mx

http://flic.kr/p/b3wmPP

http://flic.kr/p/b3yn5r

 

Fri, 03/23/2012 - 07:00 | 2282823 spentCartridge
spentCartridge's picture

Now the basin is clean to the gleam of the eye
You constantly lie "when dove's cry"
Out that you are not about what you say
The image of the field you reveal and portray
For never ever will I fall fall to the effects of centralbankanism
So please listen
Up not down
For down is the devil
So roll like a GOLD boulder and not like a pebble
You roll like a rock, you roll like a rebel
For this is pure pain
Pick ax and a shovel
Hear no command
Hear just warning
If you wake up in the morning
And wash your face in my sink

You wash your face in my sink

 

https://www.youtube.com/watch?v=Y9YcVkqn4S4

 

Creds to the Dream warriors.

Fri, 03/23/2012 - 08:13 | 2282893 Chupacabra-322
Chupacabra-322's picture

Saudi Arabia And China Team Up To Build A Gigantic New Oil Refinery - Is This The Beginning Of The End For The Petrodollar?

The largest oil exporter in the Middle East has teamed up with the second largest consumer of oil in the world (China) to build a gigantic new oil refinery and the mainstream media in the United States has barely even noticed it. This mammoth new refinery is scheduled to be fully operational in the Red Sea port city of Yanbu by 2014. Over the past several years, China has sought to aggressively expand trade with Saudi Arabia, and China now actually imports more oil from Saudi Arabia than the United States does. In February, China imported 1.39 million barrels of oil per day from Saudi Arabia. That was 39 percent higher than last February. So why is this important? Well, back in 1973 the United States and Saudi Arabia agreed that all oil sold by Saudi Arabia would be denominated in U.S. dollars. This petrodollar system was adopted by almost the entire world and it has had great benefits for the U.S. economy. But if China becomes Saudi Arabia's most important trading partner, then why should Saudi Arabia continue to only sell oil in U.S. dollars? And if the petrodollar system collapses, what is that going to mean for the U.S. economy?

http://theeconomiccollapseblog.com/a...he-petrodollar

Do NOT follow this link or you will be banned from the site!