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...
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as AAPL held its gains from after-hours Friday - but notably saw major VWAP-selling pressure today...
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and from last week's highs, only Healthcare is positive with Materials and Industrials down notably...
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Commodities seemed to converge around -0.5% by the close...
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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)...
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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...
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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...
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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)...
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