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Stocks Bounced As Financials, Socials Trounced

Tyler Durden's picture




 

Something different today. A dip was bought and kept a little momentum - aided and abetted by some late-afternoon desperation EUR buying correlation-help which dragged the Dow back over the magical 12,500 level. Stocks and high-yield credit bounced nicely today - with the latter dragging the former higher from what we could tell (on the back of reversion to fair-value in the ETF and credit market) - as the rest of risk-assets were generally stable. AAPL rotation (making yet another one of its 9-plus % drops-and-pops) helped drag NASDAQ up while FB dragged the entire social media segment down. Financials, while up as a sector, were ugly in the majors with JPM joining Citi and MS in the red YTD now and BAC back to 4 month lows. Gold was unch and silver down as Oil and Copper jumped (with the former testing $93 at the close). Treasuries were practically unchanged from Friday's close but the long-end rallied the most from its opening levels last night and the 2s10s30s curve was a significant risk-on driver. Stocks were on their own though when we look at Treasuries, the USD, and gold as it appears the credit compression arbs were enough to pull stocks up and AUD and EUR strength into the close was interestingly aggressive - short-squeeze or does someone know something? Heavy and large size volume into the close suggests it was another ramp to provide exits - and credit indices needed to shed some 'cheapness' - though we remember that Europe is due to open in 10 hours. VIX tumbled over 3 vols but remains above 22% with the term-structure fo vol still steep.

Stocks (blue) were in a world of their own relative to Gold, the USD, and Treasuries today...

and stocks (green below) appeared to get a lift from the drastic cheapness (lower pane) of high yield funds (light red) relative to their intrinsic levels (dark red)...reassuring since the knock-on effect of this HYG/HY cheapness could have dragged bonds into the quagmire and for now seems to have stalled

and the same in HY/IG credit spreads where HY compressed its skew to intrinsics and rallied up to meet ES by the close...

but as is even more highlighted in the two charts below: left => SPY vs HYG/VXX/TLT where HYG's pop-drop-pop is very evident as a driver of the model's lift to stocks); and right => S&P 500 e-mini futures traded away from their risk-asset-based reality (CONTEXT) from around the open of the US day-session. Notably US equities did not get any 'richer' after the European close relative to CONTEXT which suggests whatever exuberance popped them into the European close (EUR strength / TSY-selling / repatriation?) had no legs and momentum had taken over then.

Facebook was just ugly again but all that fast money sloshed out of social media stocks and into the old-faithful. AAPL saved the day with another 'odd' surge after having dropped over 9% again in a few days - sustainable?

and as an FYI - AAPL closed almost perfectly at its closing VWAP from 5/14, which just happened to be a low-average-trade-size trade day - suggesting some retail selling at that level. The stalling at this level - just above the magic $555 level - does suggest this was an exit-providing move as opposed to an entry-encouraging move but then again - hedge funds can't help see a day's momentum as indicative of the way forward...(the various colors show the closing VWAPs drom each day - the red curve is the VWAP)

Financials - if one looks at the ETF - did well with a 1% rally but the big boys were not pretty as JPM slumped further - dropping into the red YTD - and BAC is rapidly collapsing to its peers (though we note that XLF is now once again rich to its credit-market view of the world - and remember how that has worked out in the past)...

The lack of movement in gold and Treasuries combined with the 'technical' shifts in the credit indices which in our view juiced stocks just enough (along with some exuberant FX moves today) does not suggest all-is-clear here for a big leg up (and short-0interest in ES is not high either).

Charts: Bloomberg and Capital Context

and for good measure, here is Facebook:

 

and the distribution of trades for FB opver the past two trading days - with the VWAP now below $39! showing the various defense lines of the syndicate and how they have failed...


 

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Mon, 05/21/2012 - 16:30 | 2448733 transaccountin
transaccountin's picture

Treasuries Steady Near Session Highs; 10-Yr 1.730% - looks like someone already knows Europe is reopening tomorrow

I guess all is well. Europe irreleavent.

Mon, 05/21/2012 - 18:10 | 2449013 SheepDog-One
SheepDog-One's picture

Right we're all safely 'de-coupled' now from our tightly woven 'globalism'.

Mon, 05/21/2012 - 18:36 | 2449069 slewie the pi-rat
slewie the pi-rat's picture

tuff day for the socials, SD1

you ok?

Tue, 05/22/2012 - 05:55 | 2450158 cnhedge1
cnhedge1's picture

Are concerns over a Greek Euro exit overdone ?
http://www.cnhedge.com/thread-4852-1-1.html

Is the Euro area Credibly on Target?
http://www.cnhedge.com/thread-4838-1-1.html

Tue, 05/22/2012 - 06:06 | 2450162 cnhedge1
cnhedge1's picture

Are concerns over a Greek Euro exit overdone ?
http://www.cnhedge.com/thread-4852-1-1.html

Is the Euro area Credibly on Target?
http://www.cnhedge.com/thread-4838-1-1.html

Mon, 05/21/2012 - 18:49 | 2449091 tallen
tallen's picture

Dead cat bounce.

Mon, 05/21/2012 - 16:31 | 2448735 Mercury
Mercury's picture

Good grief, is "Social "  it's own GIC code now?

Mon, 05/21/2012 - 17:11 | 2448861 bdc63
bdc63's picture

Don't bother trying to remember the "social" GIC code ... it won't be around all that long ...

Mon, 05/21/2012 - 18:45 | 2449085 slewie the pi-rat
slewie the pi-rat's picture

i am working on the ETF design right now

the slewie holes&poles model will be recognizable to all BiCheZ, and may win aNobel for the LGBT financing sensitivity

Mon, 05/21/2012 - 16:32 | 2448740 Boilermaker
Boilermaker's picture

I just kind of summed it up as Bernake slammed billions more into the market on thin volume.

But, the charts are cool also.

Mon, 05/21/2012 - 16:32 | 2448741 Ancona
Ancona's picture

Faceplant is looking like a bag of smashed assholes today.

Mon, 05/21/2012 - 16:56 | 2448806 HarryM
HarryM's picture

Worst part is a lot of bright eyed newbies just got their cherries popped.

Welcome to the BigHouse

Mon, 05/21/2012 - 18:26 | 2449056 Jay Gould Esq.
Jay Gould Esq.'s picture

And when Twitter comes public, they will at least come prepared...

...with an ample cache of soap-on-a-rope.

Mon, 05/21/2012 - 16:32 | 2448742 hugovanderbubble
hugovanderbubble's picture

Excellent, thx

Mon, 05/21/2012 - 17:07 | 2448796 HarryM
HarryM's picture

VIX -12% 

More tomorrow??

"Into the close was interestingly aggressive - short-squeeze or does someone know something?"

Safest bet is someone knows something - ie the unveiling of the latest Obama-engineered Master Plan - time to go big or go home , baby.

Mon, 05/21/2012 - 17:08 | 2448854 i_call_you_my_base
i_call_you_my_base's picture

...or, perhaps less likely, a pump into bad news.

Mon, 05/21/2012 - 17:13 | 2448870 HarryM
HarryM's picture

The daily bad news is non-stop, that wouldn't be a new development, just more of the same - short of a Greek leaving the EEC announcement ( but that woud be premature)

These boys need to demonstrate that they weren't in Camp David just jerking off

 

 

Mon, 05/21/2012 - 18:13 | 2449023 SheepDog-One
SheepDog-One's picture

Pump into bad news most likely, as Wall St is now faced with cannibalizing itself. Unless anyone believes that someone shouting 'OK we're printing now with a HOWITZER so bend over here comes inflation big time' is the 'good news' coming which I dont believe is the case.

Mon, 05/21/2012 - 16:34 | 2448746 BeetleBailey
BeetleBailey's picture

Weird pops in the EUR/USD, GBP/USD and AUD/USD in the last hour of trading during NY session. Checked volumes and indeed, some sort of pumping - for no good reason. Makes one's entries even more important.

Mon, 05/21/2012 - 16:36 | 2448748 francis_sawyer
francis_sawyer's picture

 "We're off the lows of the day"

~Maria BARTEoR-omo

~~~

Facebook Footnote: Is that a hockey stick in your pocket or are you just glad to FRIEND me?

Mon, 05/21/2012 - 18:33 | 2449063 BeetleBailey
BeetleBailey's picture

LOL Francis! +10

Mon, 05/21/2012 - 16:35 | 2448754 LongSoupLine
LongSoupLine's picture

Another day of fucktard fiat assholes running the show.

Mon, 05/21/2012 - 16:49 | 2448797 JustObserving
JustObserving's picture

It had all the feel of a manipulated day to prevent Facebook from crashing.  The VIX down more than 12%. Facebook is the new QE of this market - $100 billion worth. So it cannot be allowed to fail. 

There are no honest markets in the US.  That is why Hong Kong is getting a lot more business.

Mon, 05/21/2012 - 20:01 | 2449243 MeelionDollerBogus
MeelionDollerBogus's picture

For sure. Overlay VXX and FAZ and you can see excess pressure was put to ONE of them.

http://scharts.co/MBBj82

http://scharts.co/J9ooEt

Mon, 05/21/2012 - 16:37 | 2448759 MrBoompi
MrBoompi's picture

I'm glad I used my extra cash to buy silver instead of FB last Friday.  I guess I should have made this post on Facebook:

I woke up.

I drank a pot of coffee.

I bought physical silver and laughed at the people who Facebook stock.

 

 

Mon, 05/21/2012 - 16:37 | 2448760 ebworthen
ebworthen's picture

"Rotation?  Gaming sectors?  Dragging the retail, pension, and mutual fund crowd around like a monkey roped to a rodeo horse?  Now, why would we do that?"

http://www.flickr.com/photos/79008263@N05/6941472004/in/photostream/

Mon, 05/21/2012 - 16:38 | 2448761 walküre
walküre's picture

Did I read STIMULUS somewhere relating to the G8 "Summit" over the weekend?

Is this their concerted response going forward? Another STIMULUS binge to keep the economies from sliding into the crapper?

Well, good luck with that.

Mon, 05/21/2012 - 16:38 | 2448762 williambanzai7
williambanzai7's picture

SOCIALMANIA con't

Mon, 05/21/2012 - 23:39 | 2449694 williambanzai7
williambanzai7's picture

SERIAL JUNKER

Mon, 05/21/2012 - 16:40 | 2448767 Boilermaker
Boilermaker's picture

It's an 'oversold bounce'...or some other completely idiotic lets-dupe-the-ignorant-bastards bullshit like that.

Mon, 05/21/2012 - 19:34 | 2449174 trebuchet
trebuchet's picture

its the "china to the rescue with fiscal stimulus"  rally

Mon, 05/21/2012 - 16:41 | 2448773 Spastica Rex
Spastica Rex's picture

The stock market is the economy. Reality is for poor people. If you see a glitch in the matrix, just disregard it.

Mon, 05/21/2012 - 16:52 | 2448786 Eurogroup
Eurogroup's picture

Vaporizebook can give the next marketcrash it's name. Any suggestions?

Mon, 05/21/2012 - 17:10 | 2448856 ebworthen
ebworthen's picture

dot.me bubble?

Mon, 05/21/2012 - 17:15 | 2448879 franzpick
franzpick's picture

deFacedBook.

Mon, 05/21/2012 - 18:00 | 2448993 tallen
tallen's picture

FailBook?

 

Mon, 05/21/2012 - 23:20 | 2449659 palmereldritch
palmereldritch's picture

The Clap Trap

Mon, 05/21/2012 - 16:49 | 2448792 junkyardjack
junkyardjack's picture

Looks like people realized the real value is in AAPL not FB. Now that JPM announced it will stop applying a put to its own share price maybe the market can actually really get a tumble once this short cover rally is done. 

Mon, 05/21/2012 - 17:22 | 2448874 Randall Cabot
Randall Cabot's picture

Shorts will levitate aapl up to 600 in the next few days and haul the rest of the stock market with it.

Mon, 05/21/2012 - 16:58 | 2448816 YesWeKahn
YesWeKahn's picture

Glad to see the junk FB down and Ass AAPL up. Thanks again to Tylers, the trade has been very smooth.

Mon, 05/21/2012 - 17:07 | 2448846 All Out Of Bubblegum
All Out Of Bubblegum's picture

Shortbook, dammit.

Mon, 05/21/2012 - 17:17 | 2448887 erheault
erheault's picture

When ever the voices pitching a product get loud the general rule it its a con job more commonly known  wham bam thanks sucker, and the voices on this was at their highest pitch so buyer beware! 

Mon, 05/21/2012 - 17:19 | 2448896 penexpers
penexpers's picture

Fuck you, Facebook!

Mon, 05/21/2012 - 17:22 | 2448902 franzpick
franzpick's picture

I think the impending debacle is JPM down from 41 to 32 in 7 days going for a 20-something handle, and BAC down 3% heading for 5 again: the camel's nose in the derivative tent looks to me to be the next disaster hiding in plain sight.

Mon, 05/21/2012 - 17:51 | 2448972 bdc63
bdc63's picture

debacle? ... these are the kind of popcorn moments that I dream about ...

Mon, 05/21/2012 - 19:53 | 2449215 MeelionDollerBogus
MeelionDollerBogus's picture

My only debacle is my JPM put expired too soon and I sold it too early. Had I got another 30 days I'd still have it now or have sold for big profit AND got another one ready for the next leg down. Even if that leg down doesn't go far the profit from the last one would have been massive.

Unfortunately for me if I recall my buy in was 2.2 my sell was 1.00 and a week later JPM tanked and exipiry was that Friday. That very same contract was at 9.35 the DAY it expired.

What a fucking debacle that is.

Oh well, my vxx call for 19.00 went very well from 1.77 to 3.70. Could have held for 4.00 maybe even 4.30 but that was too long a wait for me... and I'm glad I took it when I did

Mon, 05/21/2012 - 17:57 | 2448982 MFL8240
MFL8240's picture

More from the US clown show!

Mon, 05/21/2012 - 18:02 | 2448995 SheepDog-One
SheepDog-One's picture

Im totaly bored, this show sucks balls.

Mon, 05/21/2012 - 18:29 | 2449040 earleflorida
earleflorida's picture

hmmmm,... apple plans to crush carriers, and offer direct mobile service, experts say? [5/1/12]

http://www.bgr.com/2012/05/01/apple-mobile-carrier/

lots of BS in the air today, feeding the impulses of frenzied muppets... i'd say 

Ps. Kodak is no big deal -- Rim's toast, and patent not worth aapl's  ~7% move        jmo

Mon, 05/21/2012 - 18:23 | 2449052 orangegeek
orangegeek's picture

yes, the SP500 bounced on very weak volume too - not a sign of strength.

 

http://bullandbearmash.com/index/sp-500/daily/

Mon, 05/21/2012 - 18:49 | 2449093 bugs_
bugs_'s picture

looking forward to the next wave - antisocial networking - notalking.com getlost.net etc

Mon, 05/21/2012 - 18:56 | 2449104 MFL8240
MFL8240's picture

Stocks were on their own though....

 

No they were not, Mr. Bernanke and his crew of clowns were in their funding the rise based upon nothing but bullshit and lies coming out of the G8 clown show.

Mon, 05/21/2012 - 19:33 | 2449169 MeelionDollerBogus
MeelionDollerBogus's picture

Seems like someone's desperate to push AAPL back up. Its intrinsic value can't possibly be this high. $400/share coming soon

Mon, 05/21/2012 - 19:51 | 2449210 chump666
chump666's picture

Short squeeze. Anyone that traded off the 13000 Dow that was relative to every other trade (on the downside).  All the power to you.

As for Facebook.  What a complete failure and telling that the 'free' social media socialist style idealism is bizarre in modern markets.  Nasdaq is overbought even with a short squeeze on. 

 

Mon, 05/21/2012 - 19:55 | 2449220 HungrySeagull
HungrySeagull's picture

Ah yes the bounce.

That pain of falling has eased, only that means you are reaching your terminal velocity and will smash into spaghetti sauce when you stop.

Silver good, Facebook bad; mmmkay?

Mon, 05/21/2012 - 20:30 | 2449299 unununium
unununium's picture

Mining stocks were up today.  Another something unusual.

Mon, 05/21/2012 - 20:57 | 2449362 geewhiz190
geewhiz190's picture

stock rally triggered by dollar pullback. once the dollar has corrected some of it's recent advance it will probaly resume its advance in earnest to a surprising level which, in turn, should grease the wheels for a much bigger leg down in stocks. gold will probably hold it's recent lows or only modestly break the recent low but this should present a decent long entry point.

Mon, 05/21/2012 - 21:17 | 2449407 Yohimbo
Yohimbo's picture

Destroy Facebook

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