Volume Soars As Rally Ends

Tyler Durden's picture

As AAPL dominates the headlines for its dramatic 5% reversal intraday and biggest drop in over two months, perhaps it is worth pointing out that the lacking volumes have returned with a flourish. ES (the e-mini S&P futures contract) saw its heaviest volume since this mid-December rally began (30% above average) as our recent pontification on the messages from the credit market (along with the rhythmic periodicity of the rally's size and length) may be starting to wear on investors' risk appetites. After European credit markets accelerated to the downside today, US investment grade and high-yield credit was not buying any of the overnight rally in stock futures and moved wide of yesterday's pre-Samaras rally out of the gate. Stocks surged upwards, tracking uber-stock AAPL but as chatter of a NASDAQ rebalance sent game-theorists scrambling to migrate, AAPL's slump dragged everything down (sadly) with ES stalling at the pre-China rumor level before falling to pre-Samaras levels from yesterday's lows. A lack of rumors and no QE mention from FOMC minutes along with lackluster news from the Eurogroup did nothing to rescue the situation as EURUSD ended on its lows (-1% on the week now) and USD Strength saw carry trades dragging stocks down. Interestingly, post-FOMC Treasuries came off their best levels in the afternoon (even as stocks were tanking) but we saw Gold rallying (in the face of a stronger USD) - does make one wonder on where the safety trade is now. WTI closed near its highs of the day (over $102) and as we noted earlier Brent in EUR closed at record highs as Copper is -1.3% on the week and Silver is tracking USD -0.75% or so on the week.

The highest volume in ES since the rally began and as we point out on the chart (with the 4 same-size rectangles - click to enlarge for clarity), we seem to be approaching some kind of periodic and point-size performance break.

Readjusting the sync between credit and equity for this week we can see clearly that credit did not buy the overnight rally and indeed ended notably lower. ES stalled (dotted orange oval) at the pre-China rumor levels and then fell and boiunced mildly off the lows from yesterday (pre-Samaras). On a longer-term basis (post NFP) credit remains a nagging doubt for risk appetite.

Financials continue to behave very weakly but there is a clear divide once again between the haves and the have-nots as JPM, GS, and WFC are grouped around the financial ETF performance post Monday's open while MS, BAC, and C are all grouped notably lower (down 5-6% from Monday's open). So much for Bank of America's sell CDS protection on this sell-off as CDS continue to widen significantly (+40-50bps from week ago tights now). MS is back over 300bps, GS over 250bps, and JPM 24bps wider than its tights a week ago at 130bps (the largest relative derisker).

Post FOMC minutes (no QE??), Treasuries sold off, stocks sold off, but Gold and the USD rallied.

In FX, JPY strengthened modestly against selling pressure on most of the majoprs as USD pushed to highs of the week (+0.8% since Friday). CAD and AUD are up an equal 0.18% on the week against the USD but all eyes were on EUR today as it tried to retest 1.31 but was rejected shoretly after the Euro conference call ended.

Treasuries saw 5Y and 7Y outperform, 10Y unch and 30Y underperform on the day but broadly speaking all remain -3 to 6bps on the week.

Oil is the high-flier of the week so far in commodities at +3.38% (and over $102 for WTI). Copper is the biggest loser down 1.3% and Gold decoupled a little from Silver today as Silver dropped and Gold rallied.

Risk-off. Perhaps we will see European equities finally start to crack and catch up to European credit tonight and then the race begins for rumors and innuendo as we see large crowds and small doors in many markets currently - but we do note that ES remains well above the post-NFP print spike levels for now (even if credit is well below them).

Charts: Bloomberg

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ACP's picture

"You can't arrest gravity, fucko!"

-Dave Attell

fonzannoon's picture

I can't help myself. This is totally unrelated. Livin in America!

The Heart Attack Grill in downtown Las Vegas lived up to its name Saturday night, when a customer dining on a "triple bypass burger" suffered an apparent heart attack.

Amateur video of the man being wheeled out of the restaurant by EMTs was posted to several web sites.

"He was having the sweats and shaking," said ‘Nurse' Bridgett, who was working at the restaurant when the man in his 40s began experiencing chest pains.

"Doctor" Jon Basso, who opened the restaurant in October, told FOX5 at first he thought it was a joke.

"One of the nurses came back to me and said, ‘Dr. Jon, we've got a patient who's in trouble.'"

The restaurant is known for not holding back on the food it serves. Signs around the business glorify bad eating habits and the menu includes items like Flatliner Fries, and Butterfat Milkshakes.

One meal, the "quadruple bypass burger" can easily exceed 8,000 calories.

The gentleman who suffered the heart attack was in the middle of eating a Triple Bypass burger when he began experiencing the symptoms.

Despite the clinical atmosphere, Basso is not actually a medical doctor, so he called 911. Paramedics and EMTs arrived in moments.

"The gentleman could barely talk," said Basso. "He was sweating, suffering. Anyone with an ounce of compassion would've felt for him."

Basso tells FOX5 he has heard the man is alive and recuperating. His name is still unknown.

The staff at the Heart Attack Grill willingly glorifies bad health. If you weigh over 350 pounds, you eat for free. And on Saturday night, Basso saw the other side.

"I actually felt horrible for the gentleman because the tourists were taking photos of him as if it were some type of stunt. Even with our own morbid sense of humor, we would never pull a stunt like that," he said.

Tourists were disheartened, but not entirely surprised to hear about the incident.

"I don't think I would walk into a place, even if it's called the Heart Attack Grill, and order food, and expect that I was going to have a heart attack," said Las Vegas resident Debbie Kaye.

Customers, however, continued eating the burgers, fries, and shakes Tuesday night.

"It says right on the door, it's hazardous to your health," diner CJ Beeman pointed out.

Basso said there have been a ‘variety of incidents' in the past, but this is the first full-scale coronary that happened in his restaurant.

Cheesy Bastard's picture

BELMONT, Mass., Oct. 17 (AScribe News) Marathon running may trigger a cascade of potentially heart-damaging events, as reported by McLean Hospital researchers in back-to-back papers in the Oct. 17 American Journal of Cardiology.




stocktivity's picture

If they took the blood samples 24 hours after the marathon as stated in the article, they obviously haven't seen runners eat and drink at a post race party.

barliman's picture


Red flag for egregious off-topic trolling.

Really? You can't help yourself?

Then please contain your self centered approach to life to Facebook and Huffington Post!


fonzannoon's picture

Red flag for taking life too seriously. There has been 25 columns on the VIX. We get it. I was having some fun. Please contain your moral high ground and selfless approach to some other site.

barliman's picture


Yea ...

.. not happening, troll.

Want to espouse something near and dear to your heart - go to the forums.


fonzannoon's picture


How about you give your thoughts on the topic at hand then? Your troll police work is done here. You made your point. I get it. No either say something relevant to the topic if you are so serious about this, or go back to sitting on your porch and telling the kids to get off your lawn.

barliman's picture


Lots of thoughts ...

... nothing that I think adds any value at this point. It was an interesting day and I thought TD highlighted the important things.

Need to sit back, read , research and let the back of my brain mull it over.

Didn't see inything in the column about the VIX though.


fonzannoon's picture

Ironically, neither did I, which led to my change of topic. Which I now regret. Shit happens I guess.

TraderTimm's picture

I'm certain you could market something that says "THIS WILL KILL YOU" on the box, and people will buy it. The trick is not being specific as to when.


Someone send the market a quadruple-bypass burger, this fat pig needs to roll over, stat.

Catfish's picture

I'm certain you could market something that says "THIS WILL KILL YOU" on the box, and people will buy it. The trick is not being specific as to when.

Kinda like cigarettes?

Rainman's picture

Clever...suicide by gluttony....wonder if his life insurance policy will pay out.

withnmeans's picture

Monty Python's Meaning of Life, Great Movie... Got to love Monty Python...

Zero Govt's picture

and we all know what happens after a low, low, low volume rally

a LARGE volume sell-off


Last suckers holding the bag call Blowjob Ben toll free on: ONE-TRILLION-BUBBLES

fonzannoon's picture

Let me get this straight. Market down, gold up, treasuries sell off. Hmmmm

Conman's picture

Safe haven Utility stocks were down too.. you're on to something there.

ebworthen's picture

Low volume melt-up probably got some retirees and pension funds to buy into AAPL at the high, the financials, and other "hot" stocks.

Time for some robo profit taking.

Zero Govt's picture

let me assure you the Robos (like Robbo) do not know their arse from their elbow, a market rally from a market collapse

they are frontrunning computers, micro-second insider traders (buy/sell order number crunchers)

digitised toilet flush mechanisms (anythings better than the losers on Goldmans and JP Morgans trading desks) with no conscious state of mind ..alot like socialists, they hum a mantra they're ordered to hum and never question the tune because they're pre-programmed IQ (ie. zero IQ) ..think Paul 'humming Karl Marx' Krugman

trebuchet's picture

those micro second insider traders cover their proptrading desk losses. and yeah prop desks frontrun too, all across the board. 

You show me a trade broker and I'll show you a person looking to profit from the reverse side of the trade.

barliman's picture



You need to stop holding these things in.

Green flag for you.


Zero Govt's picture

Hey Barliman, it's the end of the world (soon) right?

...not much time, nothing to lose, who gives a fuck! ..so no point bally dancing around the burning bush, may as well piss directly on it

I don't know how the Romans felt toward their end of Empire days though from what i hear most left the crumbling banker-vandalised city long before

personaly i'm pretty chilled (believe it or not!) but just taking aim on the usual parasites heads for historical accuracy 

devo's picture

Ding ding, we have a winner.

_ConanTheLibertarian_'s picture

A sudden spike in volume is usually indicative of a reversal, which is long overdue.

John Law Lives's picture

Apple Computer has had an impressive string of new product launches.  If they miss the boat on any major product launches in the future, the collapse of their stock price could be brutal.

Conman's picture

Well Cook did make some comments squashing apple tv rumors. So could be partly to blame.

adr's picture

Apple is based on the need to be part of a clique, not on any actual productive need. Most people have found that their PC from 5 years ago still works fine and performs every task they need it to, as fast as they would ever need. Buying a new computer will not increase productivity at all because the processing power will all be wasted. Nothing on the internet, including Facebook, needs a quad core 9GB ram monster machine. Microsoft is purposely slowing the new operating systems just so it becomes impossible to run on older systems. 2GB of ram used to be more than enough fro any work on Win XP, including any Adobe program. Now the programs will barely run on a Win 7 machine unless you have 6GB of ram available.

Back to the point. Nobody actually needs an iPad 3 over an iPad 2. The extra horsepower and better specs will do nothing for casual web use, eBooks, or videos. Other than the ridiculous voice control, the iPhone4s is really no better than the plain 4. Many people still get by with an iPhone3 just fine. It isn't about need, but status. That is why Apple makes massive design changes when they need to move new product. It is so everyone will know you have the old product. Having last year's model makes you an outcast, guilty of a fashion faux pas. When the next Apple product comes out no Apple fan wants to be seen holding the out of date design, even if the actual product performs everything you need it to. Android phones do not have that issue because most people could never tell if you have the newest model or one from three years ago. But that also means Andriod phones will never have the gotta have it fashion cachet of Apple.

An Apple TV really doesn't mean anything because it loses all the social aspect of shoving your Apple product in the face of everyone else. It will also cost far more than competing products without the ability for retailers to subsidize the cost. If Apple products were so much better than competing PCs, then why aren't Mac computers reaching hundred million unit sale numbers? You can shove a Macbook in someone's face at the airport, can't really do it with an iMac.

For much of its fanbase, Apple is all about saying you are better than someone else because you have an iProduct. Since owning Apple is about being better than others, you must buy the new product to be better than other iFanatics. You must be first in line, so you can post on Facebook that you got your iPenis before the next guy. The most fanatical Apple people I have met are also the shallowest people I have ever met. I'm sure that isn't a coincidence.


devo's picture

This implies Apple makes powerful machines. My laptop from 2007 has better specs (granted, after a RAM upgrade) than a 2012 MacBook Pro. That is sad.

Tijuana Donkey Show's picture

Yea, what type of laptop, and how much did you spend Devo?  Apple builds a solid computer and phone platform, and unlike everyone else, you CAN GET THEM FIXED. I still use my older Iphone because apple will repair it, and supports updates. Apple does lever the asshat/gotta have it crowd to sell some product, but their stuff works well together. Show me any other product that doen't require a squad of nerds (I am a support nerd), and I'll bow down. And do not say M$FT, their stuff is garbage at best.  As for the 2007 spec, go read about how the speed isn't the same year to year as a true measurement. 

spinone's picture

Agreed, apple stuff works.  Uses a flavor of unix for the OS of the mac. Micro$oft is a horrible horrible horrible OS.

Genzero's picture

Only 250 more Nasdaq points of bullshit to erase.

pleseus's picture

Equity Markets seem to be rolling over.  We could see a 20% correction from here ushering in an announcement for QE3 in a couple months. 

ekm's picture

I'm looking at S&P, at least 950.

Uber Vandal's picture


You are a lot more bullish than I am.

I am expecting S&P @ sub 650 by May, 2012.

RSloane's picture

Give me some data that tells you the S&P will be sub 650 in a couple months.

Uber Vandal's picture

Simple enough:


BDI (Baltic Dry Index) on Dec 5, 2008 @ 660 ==========> S&P 500 on March 6, 2009 @ 666


BDI on Feb 3, 2012 @ 647 ==========> ?? (I am thinking around May 3, 2012 following the above)


I am quite possibly wrong, but the past does seem to rhyme a lot.

spinone's picture

Yes, but the glut of cargo ships is a confounding factor

DarkStarDog's picture

S&P 444 then the jack ass Bernack gets canned. RomaBoma steps in doodoo, via revolution, banksters disapear and then a real recovery can finally commence.

rosiescenario's picture

..or if we get a 30% correction, we'll have QE3 in a couple of weeks, a 40% correction, QE in a couple of days.....lets put a ruler on it.

trebuchet's picture

30% correction. QE3 then Rally.        Extrapolate that backwards and you get to the point if 30% correction tomorrow, QE3 within hours, rally immediately following, so no chance of immediate selloff. 


QE2 has convinced markets of credible response of QE3 and so no need to have QE3. 


Im not saying market wont selloff, it could do for other reasons, Im saying Qe3 is far less likely than most people believe.

Raisuli's picture


I wonder how the TPTB cold have hidden this from us. I did not see that coming. I read ZH and keep looking for the inevitable crash.

Seems like can kicking is nothing I understand well enough.

ekm's picture

Right now BAC has 28.59 million shares traded after hours. I've followed it every day since I'm short. I can't remember one day it had so many shares traded within 1 hr of close of market.

Any idea?

surf0766's picture

Did we just see oil / gas go up and stocks go down? Kinda like spring 2008?

fonzannoon's picture

Oil I don't believe is going to crack 2008 style. Iran is trying to break the petrodollar. This is going to be interesting.

surf0766's picture

We have already seen last year when it hit $112 per the damage it can cause with $4.00 gal gas and the additional slowdown. How much slower than stopped can we get? I was just wondering if anyone thought the same.