Volume was dismal - aside from a massive surge in S&P 500 e-mini volumes as the combo Bernanke bluff and ECB bond-band-rumor hit the tape and exploded stocks up from two-week lows. A late-day attempt to close the S&P green for the week failed and the Dow ended with its first down week in seven weeks - and largest loss in nine weeks - despite a magnificent centrally-planned triple-digit gain today (+100.1pts!) Stocks were 'aided' by new cycle highs in HYG as it saw its best performance in a month - amid massive fund inflows and heavy issuance (notably outperforming credit spreads in CDS land). The shift in HYG does look like some convergence trading with SPY though - after a month of flat-lining. Gold (and even more so Silver) were the week's big performers (up 3.35% and 9.25% respectively) even as the USD only lost 1.1%. Treasuries ended the week better by 9 to 14bps (considerably different from stocks relative performance). The week was characterized simply as stocks bouncing between QE-off (Treasury strength) and QE-on (USD weakness and Gold strength) - on de minimus volumes.
S&P 500 e-mini futures tested to two-week low support and ripped back up to the 'low volume' node in the distribution of prices of the last two weeks - in other words, they needed to auction up here to see if anyone was a willing buyer/seller - and as is clear - that is where they stalled for now... (heavier volume came in at the close/after-hours)
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and today's equity rip once again disconnected it from risk-assets after following them lower (and catching down to them yesterday)...
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The Dow saw its first loss on the week after six weeks of gains and had its largest loss in nine weeks...
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HYG rallied extraordinarily to new cycle highs - though was playing catch up to SPY it seemed - as it had also traded 'cheap' to intrinsics for a couple of days - supported by heavy fund inflows once again...
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Yesterday's disconnect 'lower' in stocks to catch back down to Treasuries - was rapidly disconnected back up to USD and Gold QE-on today it seemed...
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Buty we can't help but see flows into Gold and Silver...
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and Treasuries...
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as indicative of considerably more risk-aversion than QE-on fever.
Today's 'confused' market saw Treasuries selling off as stocks rallied
on QE-hope but gold treading water along with USD strength (hardly QE-on-like)...
enjoy the weekend...
Charts: Bloomberg and Capital Context
Bonus Chart: Medium-term S&P 500 e-mini - tested down to trend support - bounced but saw heavy professional selling (h/t @eminiwatch) into this 'bounce' to next resistance...
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Bonus Bonus Chart: S&P 500 Sectors Post Tuesday morning's S&P 500 highs... hardly signals belief in the current rally with HealthCare unch (best) and Materials ugly...
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