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Red Is The New Green - Volume & Volatility Surge

Tyler Durden's picture




 

After touching four-year highs this morning, the S&P abruptly turned tail and sold back down. AAPL slumped hard off its all-time record high open just shy of $675 - reverting NASDAQ to its peer indices and broadly equities had the worst day in 3 weeks (and only its 4th down day of the month of August). S&P 500 e-mini futures (ES) volume surged to its highest in three weeks - and average trade size was its highest since the lows in early June - along with its largest daily range in three weeks. Volatility jumped (amid some extreme gappiness as AAPL started to lose it) back above 15% (up over 1 vol) - leaking modestly lower into the close as ES saw some intraday covering to lift it 'off-the-lows'. Hovering at the Friday morning/Monday night lows in stocks, Treasuries saw a green close (just) with the long-bond 8bps off its intraday high yields - following the same rip-and-dip pattern of the last few days. Credit traded the same pattern as stocks today - with IG breaking below 97bps only to close back above 98.5bps, HY underperformed (as HYG outperformed in a very narrow range). Credit was busy from our chatter with desks. The USD kept falling but stabilized after Europe closed - though commodities all gained on the day - with some 'leakage' in the afternoon. Stocks led risk-assets in general in the risk-off mode - with financials the only notably green sector as tech underperformed.

 

ES broke to new four-year highs, but found resistance at the top of the up-channel and fell back to the next support...

 

Volume was at a three-week high today but average trade size was considerably larger than recent averages - tending to mark turning points...

 

but just a glance at the last few days of cross-asset class performance tells you that things are a mess with bonds, stocks, gold, and FX all moving around - eventually recoupling to some extent today...

 

Treasuries remain in the recent range - with some serious swings in between - after touching their 200DMA today

 

The swing in stocks, credit, treasuries and AAPL today would likely have scared few weaker hands away but nothing indicates sustained weakness for now - the volume and high average trade size does however suggests pros were covering longs up here more than buying the dips. For follow-through, we will need to see Treasuries come along for the ride now and a little more JPY cross action - especally now EURUSD is back at 'fair' and offering little juice for rate differentials (we think of the lower panes as a 'chaos' premium over rate-differentials that provides 'juice' for carry when EUR is experiencing pain)...

 

On a long-term basis, risk-assets (based on post LTRO2 calibrations) have normalized 'up' to equity's exuberance in recent weeks (TSY weakness and commodity strength) but still point to a notable drop in ES to around 1300 (over 120 points of hope)...

 

Charts: Bloomberg

 

Bonus Chart: AAPL and the amazing VWAP close boundaries...

 

 

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Tue, 08/21/2012 - 16:39 | 2725232 slaughterer
slaughterer's picture

"nothing indicates sustained weakness for now"  Komplett richtig, leider.  

Tue, 08/21/2012 - 17:08 | 2725315 RestoreOurFuture
RestoreOurFuture's picture

 

 

Can you guys only imagine how high the S&P would have been if a schrewd businessman was in the White House?  Lower corporate taxes, lower capital gains taxes, lower taxes on the REAL drivers of our economy coupled with a business friendly environment would have created so much more wealth than the nanny, welfare environment that we have today.

Make that change!

Romney/Ryan 2012

Tue, 08/21/2012 - 17:13 | 2725334 HelluvaEngineer
HelluvaEngineer's picture

Worst. Troll. Ever.

Tue, 08/21/2012 - 17:14 | 2725335 IndicaTive
IndicaTive's picture

Go back to Yahoo and practice some more.

Tue, 08/21/2012 - 17:19 | 2725350 fonzannoon
fonzannoon's picture

"Can you guys only imagine how high the S&P would have been if a schrewd businessman was in the White House? Lower corporate taxes, lower capital gains taxes, lower taxes on the REAL drivers of our economy coupled with a business friendly environment would have created so much more wealth than the nanny, welfare environment that we have today."

Make that change!

Ron Paul 2012

Tue, 08/21/2012 - 19:53 | 2725727 SAT 800
SAT 800's picture

Ron Paul is not on the ballot; why do you have so much trouble understanding what "reality" means?

Tue, 08/21/2012 - 17:21 | 2725357 str8shooter
str8shooter's picture

Yeah , even lower cap gains taxes so the economy does nothing and rich get richer. Thats exactly what we need.

 

Tue, 08/21/2012 - 17:23 | 2725363 fonzannoon
fonzannoon's picture

I am not a fan of double taxation or triple taxation. What can I say. Please don't make me defend the Romney troll...

Tue, 08/21/2012 - 19:51 | 2725724 SAT 800
SAT 800's picture

Let me get this straight; you "intelligent people" on Zero Hedge want to vote for Obama? Is that right? Are you really that stupid?

Tue, 08/21/2012 - 17:33 | 2725398 css1971
css1971's picture

MDB is at least funny.

Tue, 08/21/2012 - 17:38 | 2725407 fonzannoon
fonzannoon's picture

MDB has been getting a bit more serious and a bit more irritated lately. I notice instead of some unsolicited rant he tends to respond to others more. If he keeps that up he will be forced to learn something.

Tue, 08/21/2012 - 19:12 | 2725568 fuu
fuu's picture

Congrats on your 9 days!

Some fun anagrams of your screen name:

 

Refuse Our Torture

Our Reefer Or Tutus

 

Also a fun anagram of Mitt + Paul: A Tit Lump

Remember: Election 2012 The Dick or the The Cancer, either way we're fucked!

Tue, 08/21/2012 - 20:46 | 2725865 slewie the pi-rat
slewie the pi-rat's picture

the conventions are coming!

this is our own convention!

maybe we should amend theContsitution so that:

  1. corporations are considered people (unless they are used to commit crony-crimes) and  
  2. gold and silver coinage would no longer be legal tender

that would fix everything, doncha think, fuu?

we'd have the pols and banksters right where we want em then, BiCheZ!

 

Tue, 08/21/2012 - 22:05 | 2726071 fuu
fuu's picture

Why would we want to get rid of gold and silver coinage?

Wed, 08/22/2012 - 01:14 | 2726361 slewie the pi-rat
slewie the pi-rat's picture

b/c the Constitution doesn't work the way it is now fuu, so it should be changed???

oh wait!  i just re-checked!  theConstitution already says gold & silver = money & is/are legal to discharge all debts

and lemme check the corporations....   not mentioned?  HOW THE FUK CAN CORPORATIONS = PEOPLE WHEN THEY ARE NOT MENTIONED IN THE US CONTITUTION?

alex:  that's right, slewie! 

you got the question right for the dy-ileedbl and $88K!  and here's theFinalJeopardyTM answer once again, BiCheZ:

Because thePeople write theConstitution but the corporations WRITE THE LAW

Wed, 08/22/2012 - 09:23 | 2726882 fuu
fuu's picture

Where do rights come from?

Tue, 08/21/2012 - 16:40 | 2725241 mac768
mac768's picture

Here we go,

the robots get cold feets....

Tue, 08/21/2012 - 16:40 | 2725243 fuu
fuu's picture

Silver bitches!

Tue, 08/21/2012 - 16:48 | 2725258 Alea Iactaest
Alea Iactaest's picture

Hope, bitchez!

Markets rise on hope of action by ECB

Who needs fundamentals when you've got hope?

 

Tue, 08/21/2012 - 17:16 | 2725340 IndicaTive
IndicaTive's picture

Where is Max Fissure. I need him to set me straight.

Tue, 08/21/2012 - 18:40 | 2725551 fuu
fuu's picture

I dunno, but here's his theme song: http://www.youtube.com/watch?v=5AcJCzb_beQ

Tue, 08/21/2012 - 21:13 | 2725935 slewie the pi-rat
slewie the pi-rat's picture

troll appreciation day?

Tue, 08/21/2012 - 22:57 | 2726050 fuu
fuu's picture

I find that they are never always wrong.

Wed, 08/22/2012 - 01:25 | 2726370 slewie the pi-rat
slewie the pi-rat's picture

we still have tyler

Tue, 08/21/2012 - 16:44 | 2725251 adr
adr's picture

The market broke out of its gator mouth algo triggered pattern with this last rally.

What animal chart are we going to get this time? It looks like a giraffe neck pattern right now, or maybe elephant trunk. Either way the moves up and down seem to look like they are going to increase in size.

Anyone thinking WTF, is that analysis really any different than any other analysis in this market?

Tue, 08/21/2012 - 20:59 | 2725903 slewie the pi-rat
slewie the pi-rat's picture

yes

but at least the squirrel didn't fall offa the limb... 

Tue, 08/21/2012 - 16:52 | 2725261 Hype Alert
Hype Alert's picture

"the volume and high average trade size does however suggests pros were covering longs up here more than buying the dips. "

 

I just can't imagine who would be buying at 4 year highs.

 

With the commodity charts posted earlier, retail sales numbers, the last employment report and the market at 4 year highs, Jackson Hole should be interesting.

Tue, 08/21/2012 - 19:56 | 2725736 SAT 800
SAT 800's picture

The major averages are a mechanism of public opinion control; but the book cookers have overdone it; sell it where it sits. It's no good.

Tue, 08/21/2012 - 17:01 | 2725285 Conman
Conman's picture

Another bleh day especially because financials managed to close green. Shenangians still afoot.

Tue, 08/21/2012 - 16:58 | 2725290 francis_sawyer
francis_sawyer's picture

 old paradigm: Green is blue & Red is red

new paradigm:Red is the new green is Red & Green is silver (with blue balls)

Tue, 08/21/2012 - 17:00 | 2725295 YesWeKahn
YesWeKahn's picture

still overbought.

Tue, 08/21/2012 - 17:16 | 2725342 HelluvaEngineer
HelluvaEngineer's picture

Wow, really?  After a .3% selloff?  Yeah, I imagine we might have another .1% to go before we rally.  My God that was scary.

Tue, 08/21/2012 - 19:54 | 2725730 SAT 800
SAT 800's picture

Agreed. Sell it where it sits. The next significant move is down.

Tue, 08/21/2012 - 17:05 | 2725310 Richard Chesler
Richard Chesler's picture

All hail schizobot!

 

Tue, 08/21/2012 - 17:16 | 2725343 Bowgett
Bowgett's picture

Check out lates Gallup poll on jobs. Something happened very recently that slowed hiring sagnificantly:

http://www.gallup.com/poll/110134/Gallup-Daily-US-Job-Market.aspx

 

Tue, 08/21/2012 - 17:23 | 2725362 reader2010
reader2010's picture

WAR IS PEACE.

FREEDOM IS SLAVERY.

IGNORANCE IS STRENGTH.

RED IS GREEN.

Tue, 08/21/2012 - 19:02 | 2725595 TWSceptic
TWSceptic's picture

Sounds like the Obama campaign.

Tue, 08/21/2012 - 17:23 | 2725365 Cthonic
Cthonic's picture

SVXY -2.7% (inverse 2x, no short borrow available)

VXZ +1.5%

VXX +2.2%

UVXY +4.5% (that's a 2x)

$VIX +7.1%

Worst. ETNs / ETFs. Eva.

Tue, 08/21/2012 - 17:31 | 2725391 disabledvet
disabledvet's picture

If this is even a down day...still feels like a bear trap to me. Of course if "short in may" was your thing then I guess this better be the real deal.

Tue, 08/21/2012 - 17:33 | 2725400 fonzannoon
fonzannoon's picture

"It's a trap or ya blind!"

Braveheart

Tue, 08/21/2012 - 19:51 | 2725720 kornholio
kornholio's picture

bullish

Tue, 08/21/2012 - 22:35 | 2726137 slewie the pi-rat
slewie the pi-rat's picture

if you chat with brianSack, please say hi from slewie!

we are not wothy!

he's got that paradigmShifterTM on that new edsel tranny doesn't he?  

slewie's market reporttues:> 8.21.12  there was no data to fudge today so 'they' were unable to get the muppets to buy;  the mupputs sold into the morning rally and are now gonna try to knock down soybeans and oil [which has benefitted from peak corn and the tightness in the ethanol and carbon credits futures]

 

 

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