Last week the hedgies were dumping, as the "momo whale" dumb money was chasing things higher on low volume intraday levitation. Today, idiot money (which is known thus for a reason) joins the dump fest. And according to Goldman, "the selling pressure is still muted." And unless the Politburo of the Developed World comes up with a Deus ex Printerium fast, muted may soon go to Max Volume.
Another disappointing day for stocks. Asia lower, Europe lower, US lower as Greece worries continue and financials again trade particularly heavy. Guilty until proven innocent it seems. 9d RSIs say SPX is fast approaching oversold territory, but our technical analyst Bill Noble suggests selling pressure is still muted (looking at the 10d moving average of TRIN at least). Notable though that long only-accounts were much better sellers today. That wasn’t the case last week. SPX ends down 15 at 1338 (-1.11%). The DOW ends down 125 at 12695 (-.98%). The NASDAQ ends down 2903 (-1.06%).
The VIX was up 2 today to 21.9.
EURUSD again trades to new cycle lows – more Greece worries, weak IP, and most recently a downgrade by Moody’s to Italian banks. While selling interest was consistent, it hasn’t yet come close to the type fervor that suggests an inflection point. Elsewhere, USDBRL trades above 2.00. Haven’t seen that handle since July 2009. Thinking about BRL a different way, the currency has sold off more than 30% since its July 2011 high vs. the dollar. At current levels of carry, earning 30% will take about five and a half years to make back. GBP remains a rock. Only marginally weaker vs. the dollar today, and stronger vs. mostly everything else. The transition from basket case to safe haven probably says more about the external environment than anything about the UK, but is amazing nonetheless. USDJPY still boring. Pinned just below 80.
Tomorrow brings GDP for the Eurozone, Germany, Hungary and the Czech Republic; US CPI, Empire Manufacturing, Retail Sales, and Long-Term TIC Data; and CPI for Poland and Israel. There will be an EcoFin Meeting tomorrow, as well as the redemption of a Greek International Bond.