Stocks Stumble Despite AAPL's Best Efforts

Tyler Durden's picture

Not even the almighty power of AAPL could bring to bear a positive end to the day for the S&P 500 or the Dow. Most notably, the Dow Transports are now -2.3% from the highs last Tuesday and diverging aggressively lower. Volume was simply incredibly low today (with London close) in NYSE and S&P 500 e-minis where volume was its lowest of the year by a long-way. VIX soared today, up over 1.2vols to 16.4% with some major put-spread buying in SPY. The afternoon weakness in gold, silver, stocks broadly (and specifically Materials, Industrials, Discretionary, and Financials) tend to indicate a QE-off move but Treasuries (which rallied 2-4bps) were largely unmoved in the afternoon. The USD limped higher also (QE-off) all afternoon but ended the day practically unchanged with AUD weakness the standout. Oil was volatile as Isaac was downgraded, cracks were arb'd, and SPR-release rumors swung it around - though the economically-sensitive commodities all clustered together at the close around -0.5%.

The Nasdaq is very modestly red from the highs last week (but AAPL helped it close slightly green today) but the divergence with the Transports is incredible...

 

as AAPL held its gains from after-hours Friday - but notably saw major VWAP-selling pressure today...

 

and from last week's highs, only Healthcare is positive with Materials and Industrials down notably...

 

Commodities seemed to converge around -0.5% by the close...

 

There was some very large Put Spread buying in SPY today (h/t @OpInterest) in the 130/140 strikes - given chatter and relative price moves, it appears these were Bear Put Spread purchases in ~100k lots (or 10mm SPY shares or $1.4bn notional exposure) - suggesting someone in size is less than positive on the next few weeks (especially to do this trade on an illiquid day like this)...

 

Across the capital structure, stocks got a little ahead of themselves early on but reconnected with rates/vol/credit and 'plunged' together into the close. Risky assets in general were weak but Oil's drop and Treasuries rallying had a much bigger impact than stocks did...

 

Charts: Bloomberg and Capital Context

Bonus Chart: Little known, yet very sensitive to the economy - specifically housing and construction - Ritchie Bros auctioneers has been diverging significantly from the homebuilders since the end of LTRO2. It would appear that with all this hopeful home-building that is anticipated, they will be doing it all by hand with no need to buy/sell heavy equipment...

 

Bonus Bonus Chart: What do stocks know that inflation breakevens do not - it seems the hope is beginning to fade from equities up here as they diverge lower from the highly correlated 10Y break-evens (and gold catches up to them)...