Golden Day As Stocks Slip And Silver Still Leads YTD

Tyler Durden's picture

When even Pisani is questioning the fundamental-less QE3-addicted rally, it is perhaps self-evident that volumes were lagging today and stocks gave up most of their gains to end fractionally higher in the S&P 500 e-mini futures. Stocks peaked at the open of the US day-session after an overnight ramp that started in the depths of the overnight session (3amET) as auctions and data became so bad that traders adjusted their odds of a central-banker injection which seemed to spur wholesale buying of gold, stocks, selling of the USD (but also selling of US Treasuries - which did not fit with the QE meme). Gold continued its debasement rally after the US day-session as stocks sold back off as GDP composition weakness became clear. As we pushed into the European close, stocks rallied back to catch up with Gold's performance on the day and then sagged for a quiet low volume afternoon that saw the ES drop back below 1400, below its opening levels as Gold held above $1660. Treasuries limped around in another narrow range day ending a fraction lower in yield but off their best levels of overnight (where 10Y got down to 1.88%). Whether it is discounting Fed easing or EUR repatriation, USD weakness was broad today but JPY and AUD strength was relatively equal providing little carry-driven strength to support stocks. VIX warbled above and below 16% but ended back above as the term structure of vol continues to leak flatter. A solidly green week for stocks, accompanied by falling volumes and average trade size has seen the nominal value of the S&P 500 almost overtake Silver for best-performing asset YTD (after Silver's post LTRO2 collapse). Copper outperformed Gold and Oil on the week - though they managed to more than double the implied move from USD's weakness (-0.5% on the week). The lack of financials in today's push along with only modest energy, industrials, and materials follow through suggests investors are losing hope rather quickly with the QE chatter and the slide into the close did nothing to stay anxiety.

Just your standard 3%-plus 50 point almost-linear lower-and-lower volume melt-up in the US' broad equity index...

From 3amET, risk-assets soared as the USD was sold broadly. Gold and stocks (blue) meandered along with one another and each time stocks caught up to Gold (orange arrows), stocks leaked back...

S&P sectors have moved in a generally highly correlated, liquidity-hope-fueled way this week but lagged a little towards the end of today...

Silver's loss since LTRO2 has dragged it down to only a slight outperformer YTD as ES manages to leak higher in the last four days...

Correlations remain very noisy as QE-on and QE-off plays havoc but the week's moves in FX seem much more about USD weakness than EUR strength per se - as we try to highlight below the moves all seem very broad-based USD selling (as we suspect Fed action is being priced in over ECB or BoJ action)...

USD weakness heped gold rally but silver did not benefit as much this week and remains a decent underperformer on the week and the month...

But as our proxy for risk-assets suggests, equities seem a little full of hope right now that Ben will deliver...


Charts: Bloomberg

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Buckaroo Banzai's picture

Ahem. Your attention, please.


That is all.

evolutionx's picture

ECB accepts Portugal Bonds due Dec. 31, 9999

No joke: the European Central Bank accepts a Portuguese bond from the year 1943 as collateral due for repayment on Dec. 31, 9999. The ECB has turned into the dumping ground for European banks' junk bonds. The practice could harm the central bank's reputation as well as the Euro. The ECB issues Euros for almost everything.

Sudden Debt's picture

Even captain Picard can't cash em in....

tempo's picture

WMT has been dead money for 15 years with a spike in PE multiple then a long slow consolidation of the PE. Could AAPL face the same fate?

LongSoupLine's picture

Party like it's 9999! - Prince

Randall Cabot's picture

These end-of-day summaries don't get a lot of comments but I look forward to reading them every day. Thank you!!

Cdad's picture

Indeed, at the end of each [long] day filled with criminal syndicate Wall Street bankers and their vague theories [for going long stawks, of course], it is good to have this concrete context model to look at...sans all the bullshit.


Lazane's picture

Ben will deliver, he has no choices of favor other than to deliver, just keep the ball in the air as long as possible is all they are asking of him.  keep stacking

Sudden Debt's picture

And when he fails he can deliver MY PIZZA!

Sudden Debt's picture

Sorcers stone... It's great when you have one....
Turning lead into gold...
Turning air into silver...

I wish I had one to... All I can do is turning fiat into silver... Next best thing I guess...

Long-John-Silver's picture

They turn digital bits into Gold and Silver for the fiat paper worshippers. Soon the tide of paper will turn blood red and the digital bits will enter the nether world to join those of MF Global.

PersonalResponsibility's picture

"Soon the tide of paper will turn..."


It can go much longer than you think.

Bay of Pigs's picture

It never ends with these fucking crooks. Where the hell are they getting 5M ounces in one day? 

You'll hear nothing about this in the MSM, thats for sure.

tmosley's picture

Extorted under threat of death by Jamie, or simply confiscated from their own customers.

GS-DickinDaMuppets's picture

"JP Morgan Increases Registered Silver Inventories 500% OVERNIGHT"

if this is true, it is just more proof of the blatant manipulation of TPTB to control supposedly free "markets".

If you are smart you will be in physical not in ETF's.

If 1.4 million oz of REGISTERED silver can just disappear from a vault and the CFTC doesn't know where it went, what does that say about a ETF that SUPPOSEDLY has one oz of metel for each outstanding share?  That really instills confidence in me that the CME has really got their act together! /sarc

...doing GOD's work...GS-DickinDaMuppetts

icanhasbailout's picture

Who's on the other side of JPM's trade?

DollarMenu's picture

From the link:

Yes, you read that chart correctly.  JP Morgan’s registered silver inventories just went from 1,268,416 ounces to 6,260,300 ounces OVERNIGHT as The Morgue ADJUSTED nearly its entire customer inventory to the dealer side!


Is this just an appropriation of customer physical assets to make deliveries?

MFGlobal went unpunished, perhaps this can be finessed as well.

NakedSwanTrading's picture

Bullish formation for Silver: if Silver Futures (May basis) trade higher than $31.35-32.50 range,then upside move to $35.90; when they trade higher than $36.80-37.50 after May 24,then upside potential to $41+!/nakedswantrader/status/195882956869472256

Kaiser Sousa's picture

had to sit by and listen to yet another "financial expert" who works for some other bankster instittuion on Bloomberg saying how the gold standard could never work for the US cause their aint enough gold...thats after he stated that he had heard that there was an ounce of gold for each man woman and child in the in world????


morons and disengenuous mother fuckers....fuck all bankers............

Son of Loki's picture

Ron Paul draws thousands at UT speech

"There is more to winning than victory at the polls, Paul told the crowd, which broke into occasional chants of "President Paul."

"I'm convinced a revolution is going on. It is an intellectual revolution," Paul said.

"It is going to be difficult, but it is always glorious to have success. And we will have success," he said. "Regardless of what happens next week, next month, November — the spirit of this revolution is not going away."

Wow, this guy is pretty popular.

I Got Worms's picture

He filled up a Texas A&M auditorium to the rafters 2 weeks ago. Dr. Paul's mind revolution is definitely something both Aggies and Longhorns can agree on.

The Swedish Chef's picture

Ron Paul is for people who actually care, who are willing to volunteer, work hard, show up, give money, sacrifice... Sadly, this is not 99% of society, who just want to sit on their asses and get served with a soundbite messages that cures all illlnesses. 


In a society that took politics seriously, Ron Paul would have won by a landslide. unfortunately we don´t live in said society.

suckerfishzilla's picture

Somewhere here on this site Tyler says that this is all folly.  It sure has been profitable for pure .999 folly. Folly bitchez!

trebuchet's picture

if you are asking if cotext mapping is true, yes. google mapping is RELATIVE

whstlblwr's picture

End GDP measure, End the Fed.

"GDP measures everything “…except that which makes life worthwhile.”

“Our Gross National Product…counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural
wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities..., and the television programs which glorify violence in order to sell toys to our children. Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything, in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.”

Robert F. Kennedy, speech at the University of Kansas, March 18, 1968

DavidPierre's picture



Does anyone really believe that politicians anywhere have the stomach to follow it?

Realize that when a country goes into "austerity mode", the economy shrinks,slows, by the exact amount that the government either does not spend or raises in revenues. This is the real nuts and bolts of the entire global situation, had the governments in the U.S and Europe not printed and borrowed like drunken sailors on leave of their senses. Economic growth would have been reported far lower and negative for years and years. The current government statistics are more bogus than anything to ever be released from behind the Iron Curtain.

Spain is now in the gun sights of speculators and bond vigilantes. They are REPORTING nearly 25% unemployment and the true number is most likely much much higher.   Can they raise taxes?   Can they tighten their belt and lay off government workers into an already unemployed populace?   Can they spend less and thus give less to their citizens?   Spain will surely be attacked in the near future and without a doubt we will hear calls for austerity. They are broke now, their banks are broke now, the time for tightening their belt was years and years ago when there was some fat in their economy that could be stored away for the lean times.   The lean times are now here and they are made worse by the fact that when the good times were rolling, too much debt was accumulated to keep them rolling.

Spain has NO HOPE whatsoever to extricate itself from the situation it finds itself in.   They cannot grow fast enough to pay off the debt, they can't now at this point become an "austere nation", hell, they cannot even devalue their currency unless they leave the Eurozone and go forward with a devalued Peseta.  

Many other European sovereigns are in the same boat as are Britain and ultimately the U.S..

The entire Western sovereign, financial and banking systems are all in the same boat, it just happens to be Spain's turn.

The "West" which includes the US, UK, Japan. Germany and up 'til now France (amongst many others) is advocating austerity which cannot work.   The funny thing is that these "black kettles" have been practicing anything but austerity and continuing to run up debt. For example the U.S. borrowed an additional $360 Billion which "created" only $142 Billion in additional so called growth.   In other words, the government borrowed (read spent) $2.50 for every Dollar that showed up as growth.   In the old days before we reached debt saturation, the Treasury would spend $1 and get $5 or more response from the economy. Now, decreasing marginal return is an understatement. The Fed and Treasury cannot even stimulate the economy on a Dollar for Dollar basis. it appears that Europe (after Sarkozy loses) is talking about going the other way. It seems that maybe they have figured out that austerity will bring on a deflationary implosion so now it's back to what caused the problem in the first place, the overuse of debt.   Europe is in the spotlight and is now acting like an out of control bobsled, bouncing back and forth off of the walls of easy money (credit) on the one side and austerity on the other. It is amazing history that we are watching.

More debt will not make old and under collateralized debt, "good" and will only lead to debasing the currencies and buying some time. Austerity will lead directly to a deflationary collapse.

Whether these politicians figure it out or Mother Nature imposes her will, "the money" will necessarily need to be changed.  The money needs to be changed and with it, a revaluation of EVERYTHING against this new money or (monies).   We now sit in a system where there is around $10 Trillion worth of above ground Gold (real money) and over $1 Quadrillion of currencies and financial instruments of all sorts. Please do the math. Gold only represents 1% of the financial pyramid as it is outnumbered by well over 100-1.   Included in this "100" are derivatives that 10 years ago would have been laughed at for stupidity.   Now, when this inverted pyramid collapses, do you want your money as part of an "inverse floating rate 30 yr call option spread between smog carbon days and the temperature inside of a tree house in Appalachia?

Or ounces of hard money that have a history of use, value and liquidity for over 5,000 years? Either route that is officially chosen from here...all roads will lead to Gold.   Look at the mathematical road map, it's pretty clear!

falak pema's picture

all roads lead to rome not to gold; and if they don't lead to rome they lead to barbarism. Sad but true. If you think humanity is at a new watershed where "power is of, by and for the people" we don't live on the same planet. Gold is just an instrument in their hands, its blood that they are scared of, their blood,  not our ability to store gold; blood...sweat and tears, as always. 

TheSilverJournal's picture

It's like the market has called the Bernank's bluff on no QE right now. Obviously, things deteriorated with the 2.2% GDP, initial jobless claims nearing 400K again, housing prices continuing to fall, and Euro crap, but the market just doesn't seem like it's going to drop when it would just get pumped up back again anyway.

This might be leading to the point where if the money is not coming out of stocks /commodities and into bonds, then the money will just lead to inflation from here. Once that inflation pushes up bond over.

orangegeek's picture

For all you elliott wavers our there, the SP500 bearish case is still holding.  For how long?  We'll find out early next week.

GernB's picture

The S&P has clearly turnd upward over the short term. I've seen a few Elliot Wave forcasts saying if the rally continues into early next week they may need to revise their wave counts.

Jake88's picture

Isn't that what Elliott wave guys do.  Changing the wave count is the name of that ridiculous game.

StychoKiller's picture

Chicken bonez and sheep entrails might not be as scientific, but they're probably just as accurate.

GernB's picture

The theory that markets are subject to waves of optimisim and pessimisim that follow patterns seems totally inapplicable when markets are clearly reacting to waves of QE and every hint of QE from any Fed official. I can probably count at least a half dozen downturns that I am certain would have turned ugly if Ben or some other Fed official had not made some totally off the cuff and off the record remark about QE being "on the table" right as the downturn was beginning. And the biggest joke of all is when the Fed notes are released and they never actually talked about it at the meeting. Investors are incredibly gullable, all Bernanke has to do is use the word easing, or accomodative policy in a sentance and the market goes up, it doesn't matter how he used it or what he said.

Clay Hill's picture

Is that Silver in your sporran, Donald?

Have a good weekend TD and crew.

nmewn's picture

"When even Pisani is questioning the fundamental-less QE3-addicted rally..."

Hmmm, I detect a disturbance in the Force.

DavidC's picture

"But as our proxy for risk-assets suggests, equities seem a little full of hope right now that Ben will deliver..."

Yeah right. And why should he when the Dow is nudging its post 2008 highs? Look, he will NOT QE further unless he HAS to. Why would he do otherwise when all he has to do is mention it and the market ramps higher?


Clint Liquor's picture

QE? Ben is already printing like crazy to maintain ZIRP. That's right boys and girls, you can't maintain ZIRP without a printing press.

papaswamp's picture

YTD?...oh ZH..I love you BUT...silver is flat.

Yea on Jan 3 it was below $30..but by the end of Jan it was above $ is now just a hair above 31. On average for the 4 is flat.