Whoever orchestrated the last two hour closing ramp sure has a satanic sense of humor, opting to close the S&P at 1666 or exactly 1000 points above the "generational" low. A late-day desperation to buy-buy-buy, triggered by an avalanche of stops being triggered in the DAX futures market (as it broke all time highs), sent stocks soaring. Treasuries had been weak all day (giving back yesterday's gains and more). The equity spurt was not accompanied by VIX or Credit or Oil or Copper but JPY's break of 103 was another trigger supporting the rise. But that doesn't matter. The release of weak IP and in-line CPI data on Wednesday seemed to trigger the 'change' as gold and silver diverged lower from copper and oil's surge, Treasuries rallied, and stocks and the USD surged thereafter. WTI crude ends the week unchanged (against a USD gain of 1.37%) with PMs down 6-7%. Volume was light today but that doesn't matter either.
It's been quite a ride...
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And everything enjoyed that last hour or so...
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Financials smashed everyone else this week...
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and JPM was the winner...
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But financial stocks are now well ahead of financial credit...
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Interestingly today did not see the 'most shorted' names get monkey-hammered instead just tracking higher in price with the market - it was Wednesday where the monkey-hammering occurred...
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So what happened on Wednesday?
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VIX didn't like that late-day ramp at all..
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Credit remains unimpressed...
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Which, if we were gambling men, would suggest buying 3x HYG vs selling 1x SPY to take advantage of what is now a 6-sigma separation...
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This was - perhaps surprisingly - the worst weekly drop in gold since Dec 2011 (worse than the crash week because we bounced so hard)... Gold closed -6.3%, Silver -7%.
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And conveiently reminding us all that the markets are nothing but manipulated playing fields where roided up Barry Bonds hit homerun after homerun, and where central banks and algorithms toy with each other, one short second before the close, Anadarko traded from $90 to $0 in 50 milliseconds going from a $45 billion market cap company to $0. That's a rate of $1 billion per millisecond and $1 trillion per second: just an advance notice. Charts from Nanex [20]:
[21]
[22]
[23]
Still think you will be able to hit bids when the time to sell comes?
But "it doesn't matter..."
Charts: Bloomberg and Capital Context