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NASDAAPL Explodes Most In 4 Months As Volatility Implodes

Tyler Durden's picture




 

A 2.7% gain in the NASDAQ, obviously dramatically aided and abetted by the squeeze-fest in AAPL +9% from last night's close, was the best gain in over four months for the tech-heavy index but still leaves it lagging the Dow (by over 2%) and S&P 500 (by over 1.5%) from the 4/9 highs in Apple. At the other end of the spectrum in the real economy, CAT's less than rosy outlook, saw it suffer its largest drop in 7 months dragging an impressive 37pts out of the Dow's lagging but positive performance on the day (now positive from the 4/9 Apple Top day). Of course the Apple-exuberance which seemed enough for the entire world's risk-asset markets to decide that everything is fixed started the day off gap higher in the US and late-to-the-game retail pushed equities higher out of the date this morning as the rest of risk-assets were generally steady. Europe's close seemed to have only minimal impact as everyone was focused on the FOMC statement and Bernanke's presser. Between the FOMC and the Bernanke conference, Gold, stocks, and the USD knee-jerked and retraced but Treasuries remained worse (higher in yield by 3bps or so). Once Bernanke began his quaking tenor, Gold pushed higher, Treasuries lower, stocks higher and the USD lower as hints of QE back on the table were dribbled in between defensive tacks on biflationary concerns. This QE-specific action was accompanied by low volumes though (as usual) but volatility did compress (a la typical QE trades) with VIX closing below 17% - its lowest in over a month and near its largest divergence from European volatility (V2X). Commodities in general lagged early then recovered as USD sold off on QE chatter from Ben - Silver underperformed on the day but outperformed notably off its lows after testing below $30 for the first time in 3 months. Treasuries pulled back positively off their high yields of the day in the late afternoon ending the week with the short-end (out to 5Y) flat and 10s/30s 2.5bps higher in yield. HYG was a dramatic high-beta outperformer today - now green for the month - even as HY and IG credit lagged the ebullience in stocks (though did improve to two-week highs). ES (the S&P 500 e-mini future) closed above its 50DMA on average volume today with some heavy and larger average trade size into the close ending just above Friday's highs - even after the dismal US data (Durable Goods) and Europe's issues this morning.

The NASDAQ still lags the S&P 500 and the Dow post Apple's Top but did a lot of catching up today...

The pre-FOMC exuberance was generally only in stocks (blue - red oval) but between the FOMC statement and the Bernanke press conference equities, gold, and the USD round-tripped off initial knee-jerk responses (but Treasuries did not - staying higher in yield). Then once Ben started quivering and let the QE cat out of the bag a little, it was QE-on (after AAPL-on earlier in the day)...

VIX also followed the QE-on path and compressed to its lowest in over a month below 17% and dramatically dislocated from Europe's VIX equivalent...

But it was gold and silver that were rejuvenated by the QE chatter - recovering dramatically off their earlier knee-jerk lows. Interesting that Silver dropped notably before FOMC and gold today?

But it was high-beta high-yield bonds that were bid/squeezed today as they pushed notably higher (green below) into a gain for the month and remain the easy outperformers. IG and HY re-converged after some HY-IG decompression but stocks (blue) outperformed IG/HY on the day..

Which leaves HYG significantly rich not only to its own intrinsic value (dark red below) but stocks broadly and HY credit spreads in general. After SPY and HYG came back together (red oval) from early month rotation - perhaps this jump today is the final squeeze cover of those who put the earkly month short HYG, Long SPY trade on? Either way, HYG premia is getting high after reconnecting just two days ago...

 

Charts: Bloomberg

 

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Wed, 04/25/2012 - 17:07 | 2374918 Dunger
Dunger's picture

Cough, cough... Durable Goods Orders.... cough, cough....

Wed, 04/25/2012 - 17:43 | 2375003 DoChenRollingBearing
DoChenRollingBearing's picture

A few years ago, almost everyone I knew bought and sold stocks.  Now it is hardly anyone I know is doing that.  YES, I do recognize that by not buying AAPL and GOOG at the opportune times, that I left a boatload of money "on the table."  But, I am with OK with that.

Wed, 04/25/2012 - 18:35 | 2375131 Comay Mierda
Comay Mierda's picture

here is your next opportunity - short AAPL.  way more selling volume than buying volume over the last couple of weeks.  no more greater fools left

Wed, 04/25/2012 - 18:08 | 2375058 SheepDog-One
SheepDog-One's picture

Nothing matters now! We've got the Apple!

Wed, 04/25/2012 - 23:33 | 2375550 HedgeAccordingly
HedgeAccordingly's picture

buy everything. 

Wed, 04/25/2012 - 17:07 | 2374920 GernB
GernB's picture

It is interesting that so much attention is being paid to what Benanke said given all the talk of QE in the past couple months, only to see no mention of QE in the last FMOC notes. You'd think the market would become skepitcal of what is said and want to see it confirmed in FMOC notes before believing it.

Wed, 04/25/2012 - 17:13 | 2374945 cougar_w
cougar_w's picture

It's all Jedi mind tricks, you know.

Wed, 04/25/2012 - 17:21 | 2374951 walküre
walküre's picture

Do yourself this favor and scan the headlines across the financial media landscape of today.

Before, during and after the conference. Try and figure out how many times the headlines changed. What you say is correct. At first there was disappointment and even suggestion that the April notes were a carbon copy of the March notes. Then over the course of the day the headlines changed and all of a sudden we are led to believe that "more stimulus" is a possibility and that "Ben is prepared to act with further measures" and so on and so forth.

Mind boggling to say the least.

Bottom line is that Ben has nothing new to say but the ministry of propaganda needs to release some positive spin.

All lies and bullshit. Ben has no wiggle room and he most definitely has no tools left unless you consider complete currency debasement and ensuing hyper inflation as tools.

Wed, 04/25/2012 - 17:25 | 2374968 NotApplicable
NotApplicable's picture

I've noticed that for several years now with the wire services. I'll be looking for real-time updates on a story and see how the exact same wire gets retitled throughout the day in an effort to manage perceptions.

Better yet, I've noticed that they tend to be full of implications of details that are simply not in the reported story, usually in an effort to minimize damage that the story would otherwise cause if people were actually paying attention.

There's a bit of an East to West Coast change as well, with NY outlets getting the shocking info out of the way first, then by the time it hits LA/SF morning media, it's already morphing towards some form of resolution.

Wed, 04/25/2012 - 18:04 | 2375051 Winston Churchill
Winston Churchill's picture

All Bernanke can do now is talk.

The BRICS have made it quite clear in public statements:

No more QE or we move of the USD,sooner than they already planning

to do.Ben's in a box.

Wed, 04/25/2012 - 18:09 | 2375061 SheepDog-One
SheepDog-One's picture

Well they scammed it a bit today, but what are they going to do tomorrow?

Wed, 04/25/2012 - 17:11 | 2374924 cougar_w
cougar_w's picture

Then once Ben started quivering and let the QE cat out of the bag a little, it was QE-on

No. Please God -- NO. Do not allow this to become another post-FOMC tradition -- to monitor the quiver.

"The quiver today was not the same as last press conference. We think the new quiver was more a tremor than an actual quiver. Meaning QE3 announcements are not in the script. Or maybe they are. But we need more of an actual spasm at this point."

Wait maybe it's okay. Maybe CNBC can have a quiver report. I'd watch it just for teh lulz.

Wed, 04/25/2012 - 17:19 | 2374958 NotApplicable
NotApplicable's picture

First, there was the dissection of Greenspinisms (the real reason he was a maestro).

Now, there's the dissection of The Quivering of The Bernank (as he ain't no maestro).

Next, there will only be one thing left to opine over concerning his successor, is (s)he conscious today?

Wed, 04/25/2012 - 17:25 | 2374964 cougar_w
cougar_w's picture

Let's hope it ends at quivers. If the next Chairsatan suffers from a loose sphincter then we're in for very difficult days.

Wed, 04/25/2012 - 17:27 | 2374971 NotApplicable
NotApplicable's picture

I don't know, that might be enjoyable to watch... from a distance, of course!

Wed, 04/25/2012 - 19:49 | 2375265 chump666
chump666's picture

He might have a loose a-hole, but he has 100% lost his mind.  He is completely out of control second to that Italian lunatic at the ECB.  At least Germany are pissed at the ECB.

 

Wed, 04/25/2012 - 17:10 | 2374928 mayhem_korner
mayhem_korner's picture

 

 

Remember back, like a year ago, when the half-life of any "news" was three days?  Looks like now it's 90 minutes...

Wed, 04/25/2012 - 17:15 | 2374948 NotApplicable
NotApplicable's picture

The Singularity approches us at an ever increasing rate.

Wed, 04/25/2012 - 17:11 | 2374935 junkyardjack
junkyardjack's picture

Only thing I saw explode was Silver through the floor

Wed, 04/25/2012 - 17:19 | 2374957 walküre
walküre's picture

Tylers, thanks for picking up the CAT story and reminding us all that this market is in full blown EXUBERANCE.

Now remind everyone at what stage in the game EXUBERANCE shows up.

Wed, 04/25/2012 - 17:21 | 2374960 mayhem_korner
mayhem_korner's picture

 

 

Exuberance shows up about 30 minutes after viagra.  (I'm told)

Wed, 04/25/2012 - 17:23 | 2374965 walküre
walküre's picture

No it's 37 minutes. (I'm told as well)

Wed, 04/25/2012 - 18:10 | 2375065 SheepDog-One
SheepDog-One's picture

Its like a toga party in a burning building.

Wed, 04/25/2012 - 17:21 | 2374961 Gringo Viejo
Gringo Viejo's picture

If I'm in gold @ $1,900.......I'm disappointed.

If I'm in AAPL @ $644.....I'm very freakin' nervous.

Wed, 04/25/2012 - 17:55 | 2375031 twh99
twh99's picture

Unless you bought AAPL at $400!  Then you made some MONEY.

Wed, 04/25/2012 - 20:57 | 2375338 Likstane
Likstane's picture

If you sold it and exchanged it for real money.

Wed, 04/25/2012 - 17:28 | 2374973 orangegeek
orangegeek's picture

NASDAAPL - funny.

 

The move on the NASDAQ100 remains in line with corrective move up.

 

If this holds, the down move, wave 3 in elliott wave speak, could be severe.

 

http://bullandbearmash.com/index/nasdaq/hourly/

Wed, 04/25/2012 - 17:48 | 2375016 YesWeKahn
YesWeKahn's picture

People can't live without daily QE fart.

Wed, 04/25/2012 - 17:54 | 2375028 ebworthen
ebworthen's picture

Tech Bubble II

Wed, 04/25/2012 - 17:55 | 2375032 SheepDog-One
SheepDog-One's picture

No need for any QE at all, anywhere.

Wed, 04/25/2012 - 18:10 | 2375063 The Swedish Chef
The Swedish Chef's picture

QE teasers for the rest of the year. No QE until banks need big time recapitalisation. 

Wed, 04/25/2012 - 18:12 | 2375073 SheepDog-One
SheepDog-One's picture

AH yes well dont forget that little BRICS announcement that if Ben prints any more theyre all banning the dollar entirely. 

Its not 2009 anymore people, theyve got no room to maneuver no matter what they say otherwise.

Wed, 04/25/2012 - 18:10 | 2375064 skepticCarl
skepticCarl's picture

The SPX and NDX poked above their 50 day moving averages today, and the RUT is about to.  In keeping with Tyler's expectation that this year will unfold simialr to 2011, it looks like the little correction is over, and we bounce around through the summer, probably hitting new highs in the indexes at various times.  Pick your shorts carefully.

Wed, 04/25/2012 - 20:17 | 2375294 chump666
chump666's picture

You don't bounce in stocks.  They either make new highs or don't, currently they are NOT making you highs.  Simple 101 trading rule in the book.  So it's an age old bear signal.  Bring up your charts and ask your self this, two false break outs (dow, s&p) in April and a third just planted last session...all on Apple results?  That is a bad comedy.  Apple will have to lift prices very, very soon once those slaves in China figure out they have been ripped to supply updated versions of Apple ithings that look like the same version 6mths ago.  It's pitiful, that and Bernanke can't take the market any higher, he needs to engineer his 'sell off' again to get oil down.  Or Obama is toast.

Cue panic sell off.

Wed, 04/25/2012 - 18:14 | 2375081 SheepDog-One
SheepDog-One's picture

Yea sure everyones now got it figured we just coast on autopilot for 8 months....nevermind Europe imploding, US data sharply turning down....yea theyve got this licked everyones guaranteed it 100%.

As soon as EVERYONE has it all figured out....I go the exact opposite direction. The sheeple herd has NEVER called the future direction correctly.

Wed, 04/25/2012 - 19:26 | 2375231 azzhatter
azzhatter's picture

Seriously with this fucking Bernanke asshole where else do you put money. I have a ton of cash and sick and tired of this piece of shit fucking me with no returns. Just fucking throw caution to the wind and stick it all in the market and let the chips fall where they may. I hate this fucking prick Bernanke, lying sack of shit, still lying about inflation.. What the fuck are you supposed to do. I worked all my fucking life, lived prudently and saved my money, now I got this clown rubbing his dick on my ass. My head is going to explode if I have to watch this dickhead once more stuttering and stammering and lying thru his teeth

Wed, 04/25/2012 - 21:00 | 2375341 Likstane
Likstane's picture

Why do you believe you are entitled to some 'return' on your money?  Just exchange it for silver and gold and your worries about losing wealth or buying power are gone. 

Wed, 04/25/2012 - 19:45 | 2375259 chump666
chump666's picture

sweet volatility to this eye bleeding over bought market.  Markets hate inflation too, re: oil blowing out and effecting ALL operational costs even Apple. 

When this thing blows it will be orgasmic.

 

Thu, 04/26/2012 - 02:51 | 2375791 chump666
chump666's picture

Oh this is f*cking nasty as the BRICS are being KO'ed one by one...India first.  Can't wait for Brazil to panic over inflation again.  USD bids will be in as Bernanke 'The Insane' prints.  Global ecomomy is f*cked beyond repair.

0623 GMT [Dow Jones] Standard & Poor's surprise lowering of India's long-term rating to negative on Wednesday is probably "the final nail in the coffin" reflecting foreign investors increased frustration over India's macro-economic problems, says Robert Prior-Wandesforde, Director of Asia Economics at Credit Suisse.

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