What can we say? All makes perfect sense: earnings dismal (worse than expected) means BTFD and if there is one lever to do that effectively given the massive over-exposure in every levered fund in the world, its AAPL. A 4% rally in AAPL - which perfectly topped out at Thursday's closing VWAP - was enough to drag stocks comfortably green by the close with a near-vertical ramp in S&P futures just to help things along. Seems like the standard pre-debate rally that we warned about last week [3] - so let's not get too carried away by today's 'all-is-well' rally. Broadly speaking, risk-assets did not dip as hard as stocks and the ramp into the close (which as is typical) pulled stocks back up to 'fair' - but with the inevitable overshoot. While we leave up to our readers to divine the implications of such outlier moves on debate days, our only suggestion for those who have missed their opportunity to buy the central bank policy vehicle, formerly known as the S&P 500, with both hands and feet, is to wait until the next presidential debate and go all in. After all, "it's only fair" that the market will soar hours ahead of the two teleprompter-less candidates debating highly irrelevant stuff.
Standard - new normal day... heavy volume dumps, no volume pumps... ES closed above its 50DMA
[4]
which is magically the upper-end fo the Bernanke-Draghi divide...
[5]
Stocks dramatically soared this afternoon as risk assets in general drifted...
[6]
and AAPL's move perfectly reached Thursday's VWAP close (yellow line) and stalled...Biggest up-day in 5 months - which was also when the stock tested the 100DMA, selling resumed the next day... AAPL closed above its 100DMA again.
[7]
Commodities were all over the place with Oil plunging and Silver surging - even as the USD ended the day unchanged...
[8]
JPY weakness and modest EUR strength balanced to end USD at unchanged...
[9]
Charts: Bloomberg and Capital Context [10]