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Market Snapshot: Bipolar Market's "Lithium" Moment Hits Minutes Before Close

Tyler Durden's picture




 

Another day, another roller-coaster ride in US equities as every other asset class was relatively well-behaved. We lurched from headline to headline all day long - up on some hope of a 'deal', down on news that nothing was achieved, up on 'progress', down on a revisit in October - but the lurches were much more evident in US equities than in FX, credit, TSYs, PMs, and commodities.

These other markets were not dull by any means but did not exhibit the absolute schizophrenic paranoia that equities did and this was critical in getting a handle on trading today as with 30 minutes to go, equities tore back down from Friday's highs to reconnect with several fair-value models across broad risk assets and the credit markets (highlighted in our earlier European close snapshot).

Chart: Capital Context

Drilling into sectors, all but Healthcare, Utilities, and Staples closed at or near their lows of the day with financials dipping red and staying there into the close. The major banks closed quite ugly with high volume dives in the last few minutes (which are leaking modestly back higher after hours).

TSYs ended the day at their lowest yields of the day with 10s and 30s tracking each other tick for tick almost, outperforming 5Y with 2Y stuck in its tight range. 2s10s30s was unable to sustain any rally, opening at 52bps, managing to get up to a measly 56bps around midday, only to fall back to 51.5bps by the close - definitely not signaling clear 'Twist' potential yet (which we tend to believ will see 2s10s steepen to benefit banks carry and 10s30s flatten to extend duration and reduce rates for mortgages).

10Y and 30Y are -11.5bps or so from Friday's close and 5Y -7.5bps.

Copper continued to slide all day - now sending some notably divergent signals on global growth from the empirical correlation with US equities would suggest. Down over 5.5% from Friday's close, Copper is a notable underperformer as Gold is the clear winner since then. Oil and Silver seem tied together.

The dollar (measured by DXY) is still up 0.6% from Friday's close and meanderfed in small range today as CHF and SEK were full of volatility and JPY crept slowly but surely higher vs the USD.

Finally credit markets were mostly focused on the roll today and all its technicals but most notably in corporate bond land we saw significant volume and net-selling in financials while Consumer Non-Cyclicals were the largest net-bought on the day. It seemed very clear from the distribution of net buying and selling that investors are using corporate bonds to action a more levered 'Twist'-based trade - i.e. assuming a hump in the TSY curve will mean an inverse hump in corporate bond curves as we saw net buying in the belly of the curve and net selling in the short- and long-ends of the curve.

In CDS land, spreads were mixed thanks to the roll but the new indices closed wide of fair-value - once again reflecting that preference for hedging/shorts over buying into apparent strength but both IG16 and HY16 were tighter close-to-close (helped by rolling of shorts).

Charts: Bloomberg

 

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Tue, 09/20/2011 - 16:43 | 1690060 TheSilverJournal
TheSilverJournal's picture

Silver and gold tied together..maybe the tides are turning for how silver trades.

Tue, 09/20/2011 - 17:13 | 1690143 Whalley World
Whalley World's picture

The article stated Oil and Silver tied together

Tue, 09/20/2011 - 18:47 | 1690357 TheSilverJournal
TheSilverJournal's picture

Ha..oops. I blame that on the whiskey.

Tue, 09/20/2011 - 16:46 | 1690078 Id fight Gandhi
Id fight Gandhi's picture

Did you know they're trying to sell copper bullion bars at a huge premium to what spot or anything made with copper is? Wtf

Most annoying is on flea bay they're selling American eagles - made of copper. Fuck that.

Anyone catch the price on cmg today? To da moon! All the momos jumped nflx over to burritos, worth more than 5x wendys

Tue, 09/20/2011 - 16:49 | 1690089 Western
Western's picture

Copper bullion is a novelty for suckers. It's BY THE POUND for fuck's sakes.

Tue, 09/20/2011 - 16:53 | 1690096 Mises
Mises's picture

i agree with everything you said, but it's still better than paper

Tue, 09/20/2011 - 17:15 | 1690151 There is No Spoon
There is No Spoon's picture

The easiest way to get ahold of copper is to save pennies minted before '82. Forget about copper bars or copper futures or ripping up abandoned homes. A pre-82 penny saved is more than a penny earned.

Tue, 09/20/2011 - 17:34 | 1690186 IAmNotMark
IAmNotMark's picture

The problem with pre-'82 pennies is seperating them from newer pennies but you're right...pre-'82 pennies are worth 2.5 cents in copper.

Nickels are the easiest.  75% copper, 25% nickel worth about 6 cents each.  No sorting required.  A bank box of nickels is $100 and is a perfect door stop!

Tue, 09/20/2011 - 17:53 | 1690240 Id fight Gandhi
Id fight Gandhi's picture

Isn't a current Nickel worth like 6.5 cents in melt value?

Tue, 09/20/2011 - 17:39 | 1690201 Idiot Savant
Idiot Savant's picture

Copper is roughly five dollars per pound and you're going to waste time searching for pre '82 pennies? Some of you aren't very good at math.

Tue, 09/20/2011 - 18:22 | 1690232 Manthong
Manthong's picture

Doesn't  hurt to have a few thousand nickels stashed.

Cheap, can't go down in value and just might be the quarters or half dollars of the new economy.

Nickels may eventually be the poor man's bullion coins.

Tue, 09/20/2011 - 23:05 | 1690907 snowball777
snowball777's picture

Sshhhh...it keeps em busy so they do less harm.

Tue, 09/20/2011 - 16:52 | 1690094 Irish66
Irish66's picture

banks had a bad story today.

Tue, 09/20/2011 - 16:55 | 1690103 papaswamp
papaswamp's picture

Debt subject to limit <$10 Bln from ceiling. (Table III-C) http://t.co/rMEcDbiz

US Debt now $14.729 Trillion or 98% debt to GDP. http://t.co/jeI44jR2

Tue, 09/20/2011 - 17:17 | 1690158 monopoly
monopoly's picture

Good wrap on the days markets. Very nice the way miners acted today. But tomorrow will be the real tell. I am ready.

Tue, 09/20/2011 - 17:32 | 1690181 Al Huxley
Al Huxley's picture

Majors especially, although it would have been nice to get a close nearer the highs. Juniors still lagging, though, kind of reminds me of post-August, 2007. I take the inability of the smaller players to draw any interest as a pretty big warning sign for the markets in general.

Tue, 09/20/2011 - 17:22 | 1690167 max2205
max2205's picture

No PPT team today. Hummm PD want cheap before speak

Tue, 09/20/2011 - 17:43 | 1690214 rocker
rocker's picture

Better Yet, Nickels are made of 75% copper and 25% Nickel.  Worth about 6 cents each.

Tue, 09/20/2011 - 17:55 | 1690243 LooseLee
LooseLee's picture

What happened to all of the Bernanke Boot-Lickers and Equity Bulltards (IQ 145 et all)? No comment on today's reversal? C'mon, spin the Bulltard story for all of us bears.....

Tue, 09/20/2011 - 18:36 | 1690334 walküre
walküre's picture

They sold their positions into the rally and left early.

Did you expect anything else?

Here's the real kicker. Nobody, absolutely nobody knows what got the rally started or why it reversed.

Try to find any investors out there who are willing to put money into this shit. There aren't any. And it doesn't matter what Ben says tomorrow.

Banks are looking incredibly weak. Let them pound sand.

Tue, 09/20/2011 - 20:58 | 1690659 Stax Edwards
Stax Edwards's picture

Net long and B'nTFD. Mispriced equities abound...Get long fool, bottom is in doomer.  S&P 1250 before 1050

Wed, 09/21/2011 - 02:51 | 1690363 moonblue
moonblue's picture

 schizophrenic ..bi polar ...zero wedge



Tue, 09/20/2011 - 18:53 | 1690364 moonblue
moonblue's picture

FIGHT THE ZERO HEDGE STIGMA OF MENTAL ILLNESS VOTE UP

Tue, 09/20/2011 - 21:36 | 1690750 LeonardoFibonacci
LeonardoFibonacci's picture

paging Dr. Emil Shaffhausen

Tue, 09/20/2011 - 19:04 | 1690399 jarrollin
jarrollin's picture

I doubt any of the volatility in the markets is due to joe trader.  The fake headlines giving a reason for market movement are annoying -- maybe deiliberately deceptive.  But I think they put them out there to convince your basic stockholder that there's rhyme or reason to this.

Tue, 09/20/2011 - 19:14 | 1690427 walküre
walküre's picture

Propaganda

http://en.wikipedia.org/wiki/Propaganda

While the term propaganda has acquired a strongly negative connotation by association with its most manipulative and jingoistic examples, propaganda in its original sense was neutral, and could refer to uses that were generally benign or innocuous, such as public health recommendations, signs encouraging citizens to participate in a census or election, or messages encouraging persons to report crimes to the police, among others.

Tue, 09/20/2011 - 21:25 | 1690718 Alpha Monkey
Alpha Monkey's picture

Public Relations

http://en.wikipedia.org/wiki/Public_relations

the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc

Edward Bernays

http://en.wikipedia.org/wiki/Edward_Bernays

An American pioneer in the field of public relations and propaganda... He felt this manipulation was necessary in society, which he regarded as irrational and dangerous as a result of the 'herd instinct'... Due to negative implications surrounding the word propaganda because of its use by the Germans in World War I, he promoted the term "Public Relations".

Tue, 09/20/2011 - 20:59 | 1690664 Stax Edwards
Stax Edwards's picture

Nice work TD, keep on keepin on

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