This page has been archived and commenting is disabled.

Late-Day Crumble As Stocks Join Gold's Stumble

Tyler Durden's picture





 

Whether it was the deterioration in Consumer Credit, downgrade rumors for US financials, Greek bank restructuring/run chatter, or a final realization that near-term QE is off at these levels of equity prices (as signaled by Bernanke and Gold this morning), the equity short-squeeze stumbled hard in the last hour of the day to end unch. Utilities managed to outperform handily as all the high beta sectors dumped into the close as Tech and Financials closed red for the day. Treasury yields and the USD were signalling considerably more equity weakness than we got though the dive caught stocks up but Gold remained the biggest loser of the day (-2% on the week against the 0.7% loss in the USD). Silver remains positive for the week - though matched gold's weakness on the day as Copper and Oil whipsawed up and down on rumor and then lack of follow-through. Equities pulled back closer to the underperforming investment grade (and less so high yield) credit market at the close. Treasury yields ended marginally lower (with the long-bond underperforming) and 7s and 10s -2bps)leaving 5Y flat still up 9bps on the week (and outperforming). Risk markets in general slid as Bernanke's speech was delivered and the Q&A proceeded but stocks went almost totally dead with financials and the S&P 500 e-mini clinging to VWAP as volumes died - until that last hour plunge. MS and BofA took the brunt of the selling pressure (ending down 3-4%) - though they are still well of the lows from a few days ago. VIX cracked back above 22% as we dropped in the end but closed down 0.5vols at 21.7% but implied correlation rose back over the somewhat critical 70 threshold and equities remain notably rich to broad risk assets in general still.

Gold stood out as the big mover (beta-adjusted) today - but stocks pulled back down to a more realistic level based on TSYs and and the USD by the close...

Equity and HY credit remain in sync but pressure on IG credit is still there - unwillingness to lift systemic overlays or putting on cheap macro hedges into the short-squeeze?

HYG and VXX tended to overshoot down and up today as the early weakness and mid-afternoon pop came but by the close, SPY was back in sync (rather miraculously) with VXX, HYG, and TLT. Equities remain rich to broads risk assets after leading them higher for the last few days - despite some TSY/FX driven give-ups by the look of it early in the day today for CONTEXT. VIX touched fair-value earlier, sold back off and then by the close was back up near its credit/equity vol fair-value but correlation remains on the low side but picked up in the afternoon - which given the downswing is perhaps a little worrisome...

It appeared today's action was very much about juicing stocks up for some better exit levels - as is clear here we dumped right out of the gate in the QE-sensitive sectors, stabilized after Ben's speech and algos lifted us to VWAP and then dumped into the close once again...

Not pretty but then an unch close is hardly epic (yet)... medium-term we are at some upside resistance and it appears (yellow/blue bars courtesy @eminiwatch) that it was small players pushing us into the highs today and pros covering...

But perhaps what is most scary about today's action was the huge jump up in average trade size which smells a lot like a short-squeeze up being used by the big boys to get better exits also (as opposed to jumping aboard to start a trend)...

Charts: Bloomberg and Capital Context

Bonus Chart: Facebook ended the day -2% MORE! Oscillating between VWAPs - this has become the new 'Pong' it seems...

Bonus Bonus Chart: The term structure of Vol has got extremely steep once again (5 month highs) - the last time we were this steep, thanks to short-term vol compression exuberance, equities sold off quite sharply...

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 06/07/2012 - 16:34 | Link to Comment Ahmeexnal
Ahmeexnal's picture

BTFD!

Thu, 06/07/2012 - 20:52 | Link to Comment sablya
sablya's picture

That's just not funny any more.  

Thu, 06/07/2012 - 16:35 | Link to Comment EclecticParrot
EclecticParrot's picture

". . . I'm the Stock Market, and I approve this message . . ."

Thu, 06/07/2012 - 16:37 | Link to Comment junkyardjack
junkyardjack's picture

Gold's stumble? It was more like this

http://www.youtube.com/watch?v=lSOl4bY52ZM

Thu, 06/07/2012 - 16:40 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Yeah, the sky is falling on gold...a whole 2%.

 

Thu, 06/07/2012 - 16:43 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

BoP, don't waste your breath on the little 'uns.

Thu, 06/07/2012 - 18:33 | Link to Comment Freddie
Freddie's picture

Hey Tylers - can I become a contributor?   I am not as good as Reggie or that guy with the big yellow hat (Turd?) but I am better than George Washington. 

I really would like to pimp my blog.

My web site domain is www.I-love-paper-gold-&-bernake-is-a-lying-f*ck.com

Thu, 06/07/2012 - 19:37 | Link to Comment oldman
oldman's picture

Dear Freddie,

We love you, but the pimp places are all full. Perhaps, you might re-apply in some other category.

Respectfully and with affection, TPTB

Thu, 06/07/2012 - 16:42 | Link to Comment resurger
resurger's picture

Painful!!!!!!!

Thu, 06/07/2012 - 17:46 | Link to Comment eclectic syncretist
Thu, 06/07/2012 - 16:38 | Link to Comment EZT
EZT's picture

So what does gold know that stock does not..

 

Thu, 06/07/2012 - 16:40 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

That unlike those pieces of PAPER it has innate and ageless value.

Just that

Thu, 06/07/2012 - 16:38 | Link to Comment Buzzworthy
Buzzworthy's picture

Gold signalled nothing but the usual paper antics of the big manipulators.  The smash started BEFORE Bernanke's comments.  Go back and check the record over the last year.  You will see that a PM smackdown always happens when the Bernank speaks.

Thu, 06/07/2012 - 16:47 | Link to Comment CvlDobd
CvlDobd's picture

Once upon a time we had Bernanke is a gold bugs best friend threads here.

Thu, 06/07/2012 - 16:54 | Link to Comment fuu
fuu's picture

He is our best friend, he keeps the price low. I <3 him.

Thu, 06/07/2012 - 22:07 | Link to Comment CvlDobd
CvlDobd's picture

Damn optimist.

Thu, 06/07/2012 - 21:02 | Link to Comment sablya
sablya's picture

I can't believe it wasn't obvious there wasn't going to be any QE announcement.  The Beige book already gave the score card and Bernanke said months ago that he didn't expect employment numbers to maintain the then-current pace.  So, the current situation simply doesn't warrant any more QE.  

But all the brightest minds on earth, the "markets", has the collective intelligence of a 3-year old who has been trained to get excited at the thought of getting a treat.  It is utterly pathetic to watch this market flop about like a fish on the deck.  Someone get a club and put the poor thing out of its misery.  It's the only humane thing to do at this point.  It needs to be beaten to death to break it out of its epic self-delusional condition.  It's already dead, like an uprooted tree, but thinks it's alive because it still has some green leaves.  

It's so painful to watch the slow motion death throes of this current economic configuration.  How long, O Lord, how long??

Thu, 06/07/2012 - 16:38 | Link to Comment JustObserving
JustObserving's picture

Real wealth, gold, must not be allowed to threaten Bennie's ponzi dollar which is based on debt and unfunded liabilities growing at $22.5 billion a day.

The Chinese, Indians, Turks, Vietnamese, informed Europeans, Iranians thank you, Bennie, for cheap gold.

Thu, 06/07/2012 - 16:38 | Link to Comment ArrestBobRubin
ArrestBobRubin's picture

Maybe it was my bitching that what hurt gold today by all rights should have impacted the equity markets in equal measure too?

Yeah right.

 

Thu, 06/07/2012 - 16:46 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Yes Bob, whatever happened to all that gold you leased and swapped out when you were in charge at the UST?

Thu, 06/07/2012 - 16:45 | Link to Comment Bastiat009
Bastiat009's picture

Stock indexes are flat, gold is down big ... that's not exactly the same thing.

Thu, 06/07/2012 - 16:48 | Link to Comment LongSoupLine
LongSoupLine's picture

I love the charts, however it's like doing technical analysis on a street hustler who suckers tourists daily.  Not to mention the hustler has full support and blessing of the US Govt.

Thu, 06/07/2012 - 16:49 | Link to Comment PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

Looks like there is just a bit of shorts covering going on which should squeeze PM, no real volume in a market with the semi's not doing well.. give it a few days- I still sense a roll over.

Uncle Ben is getting away right now with eye gestures and thoughtful pauses, probably going to gin it up after the twentieth meeting after letting Krugman soften it up some more first.

But...time is getting short.

Thu, 06/07/2012 - 16:58 | Link to Comment junkyardjack
junkyardjack's picture

June meeting will only bring talks of July meeting...

Thu, 06/07/2012 - 16:54 | Link to Comment Gringo Viejo
Gringo Viejo's picture

Just had a look at the 24 hour Gold & Silver charts at 321Gold.

Fucking identical twins.

Thu, 06/07/2012 - 17:12 | Link to Comment q99x2
q99x2's picture

Don't tell me; all broken--again!

Thu, 06/07/2012 - 17:15 | Link to Comment adr
adr's picture

The "market" or in other words the algos need to make up their mind on Facebook. The fucking stock is having multiple 5% swings every day. You could make a killing if you bought and sold at the right times. Oh wait, the algos are doing that.

At least traders got it partially right on Lulu today, but what kind of intraday chart was that? The stock should be down 90% on a call for financial audits. That earnings report packed more accounting BS than Enron and AIG combined.

If you actually believe Lulu Lemon grew revenue by 53% in the quarter, you must believe everything printed in the Weekly World News.  $285 million in one quarter out of 180 stores and a website? Total bullshit. There is no way in hell a Lulu Lemon retail store sells over $13k a day in merchandise. Lulu has a market cap double Under Armour and claims to be heading for the same quarterly revenue. Lulu sells out of 180 private stores and Under Armour is in over 3000 doors. Even if the average Lulu garment sells for twice the average transaction price of an Under Armour product, that is still 1500 doors worth of inventory in 180 stores. It isn't possible. 

Well what can you expect from the greatest running fraud in history that is the US stock market.

Thu, 06/07/2012 - 17:21 | Link to Comment Conman
Conman's picture

Well when yoga pants cost 100+ per and tshirts are like 30-40 dollars,  13k sales per day isnt too unbleivable. I tend to think this store lumps in the high end which is why it gets higher valuation.

Thu, 06/07/2012 - 18:43 | Link to Comment walküre
walküre's picture

The company is trading at about 39 times analysts’ expectations for fiscal 2013 earnings, according to Thomson Reuters data, much higher than its competitors. Nike Inc is at about 19 times forward earnings, and Under Armour Inc. is at 33.

Indeed, compared with similar stocks , a higher-than-average number of investors are betting Lululemon shares will fall. At the end of May, 10.8% of the company’s free float was being borrowed for short sales - essentially a bet the stock will fall - according to data from Nasdaq.

While that’s down from 14.9% at the beginning of the year, Lululemon still ranks in the top fifth of all U.S. stocks in terms of short interest, according to Starmine.

www.canoe.ca/Canoe/Money/News/2012/06/07/19850686.html

 

Are you NOT shorting their stock? Seems like stealing candy from a kid.

 

Thu, 06/07/2012 - 21:08 | Link to Comment Village Smithy
Village Smithy's picture

Sometimes the most basic arithmetic can betray so much.

Thu, 06/07/2012 - 17:27 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

(yet)... + -2% MORE! = L0L!!!

see if anyone besides robo_T has the nads to stay long over the weekend, yet?

now, thay's funny, too!  Hahaha!

Thu, 06/07/2012 - 18:31 | Link to Comment walküre
walküre's picture

The insiders were frontrunning and creating the buzz. Then they sold the rally to the muppets.

No follow through. The rally is dying again and markets continue to roll over.

China lowering their rate? Who cares? Their people either have no credit or they don't need credit.

Europe in either depression or in recession. That's the largest economy of the world with 500 million people. China in recession and the US in a fake recovery. Australia and Canada slowing down considerably.

BDI tells the story and that's all you need to know.

Lower highs, steeper sell offs and new lows coming.

Sure, Buy That Fucking Dip will ya. Be a good muppet.

Bank Run continues. Don't be holding the bag 2x in your lifetime.

Thu, 06/07/2012 - 18:52 | Link to Comment HUGE_Gamma
HUGE_Gamma's picture

S&P 500 5,000

DOW 50,000

a new paradigm in American productivity and growth via FaceBook

Thu, 06/07/2012 - 19:23 | Link to Comment Nobody For President
Nobody For President's picture

Watching the PPT at work the last 5-6 minutes on the S&P 500 index was a hoot. With 2 minutes to go it broke green, then faded the last 90 seconds or so back to red - darn! MSM couldn't report that "Today the Dow and S&P 500 ended up slightly, with the NASDAQ off less than 1/2 Percent".

A valiant effort by the PPT however.

Fri, 06/08/2012 - 02:13 | Link to Comment Lord Koos
Lord Koos's picture

Gold didn't fall, it was pushed.

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