Despite the best efforts of the efficient and idiotic things we call the US equity markets - which exhibited the kind of epic VIX smashfest into the close - the Dow was unable to be rescued from its 3rd red week in a row (the first in 9 months). The S&P closed above its 50DMA (at the highs of the week) with a late-day scramble (but Nasdaq ends the week +1.7%). So a very mixed bag for stocks and the USD (thanks to today's post-home-sales dumpfest) ends the week unchanged. The real story of the day (and week) though is precious metals and bonds. The 30Y bond's best week in a month and best day in 5 months wa snotable but perhaps more so, while the entire complex ripped lower in yield as the un-taper un-housing-recovery data hit, the flattening of the 5s30s spread is extreme. Gold and Silver spiked on the home-sales data ending the week up notably. The VIX-compression into the close ended at 14.00% for the biggest 2-day drop in 2 months.
Of course - as we tweeted - there are only a few things that really matter...
Only levels that matter AAPL over $500, DJIA over 15,000, gold under 1400
— zerohedge (@zerohedge) August 23, 2013 [6]
S&P 500 futures closed above its 50DMA today but on the worst volume in weeks having gone into limp-higher-mode-on-no-volume once Europe closed.
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MSFT's surge accounted for over half the Dow's gains today (18 of 34 points) but it was not enough to save the blue-chip index from its first 3 weeks down in a row for nine months...
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Builders were battered on the back of the home sales data but still managed to close the week green...!?
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Treasuries rallied aggressively today following the shitty home sales data. Today saw the 30Y bond rally ~8bps (-13bps from yesterday's high) for its best day in almost five months... This was also the 30Y bond's best week in a month (-5.5bps)...
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The big story - away from bonds - was the precious metals. Gold and Silver saw huge surges (+1.6% and +3.8% on the day) as the former broke $1,400 for the first time in 10 weeks. WTI also surged on the home-sales-are-bad-so-we-will-see-moar-reflation trade jumping back up to $106.50 (and compressing the spread to Brent back to $4.50) - Silver ends the week +3% and Gold +1.5% (despite an unchanged USD)
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The USD was slammed lower as the data hit and did not really bounce much. The JPY move is probably the most notable given its critical aspect in the global carry trade... The USD ends the week UNCH
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Interestingly, stocks were not so quick to react to the terrible home-sales data as the rest of the QE-sensitive assets...notice stocks sold off first then rallied with everything else... and then once Europe had closed... stocks were in their own little world of joy... especially in the last 30 minutes...
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and the late-date WTF moment in VIX that we have become so anesthetized to...
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Something - yet again - we saw coming...
Almost time to pound the VIX
— zerohedge (@zerohedge) August 23, 2013 [15]
Charts: Bloomberg