Trannies didn't move much today but the Dow tumbled notably - its biggest drop in over 3 weeks - and erased all of the post-FOMC gains. The S&P and NASDAQ also fell but remain up from the FOMC. Only Healthcare, Discretionary, and Builders remain positive post-Fed as Financials and the rest have given all their gains back - on the heaviest volume quad-witching day of the year. While arguing whether today's equity weakness was Bullard/George chatter reigniting Taper fears, bonds acted in their old normal way - and rallied modestly as stocks dumped ( with yields down 2-3bps). Gold and Silver were slammed lower on the day (ending unch and -2% on the week). The USD lost 1.35% on the week with JPY unch and EUR +1.7%. AAPL tumbled into the close on the rebalancing.
Gold has retraced around 70% of the FOMC move...
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and stocks have lost a lot (with the Dow now red)...
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and sectors showed notable weakness on the day...
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Treasuries are holding gains to a better extent than stocks and bonds for now...
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Volume was the highest in over 2 years...
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The last few days have been very interesting in hedging land... traders grabbed protection into the FOMC statement - were caught and covered and once yesterday cleaered itself out, we suspect - looking at the charts - that investors unwound their underlying risk (recued equity exposure) and unwound their protection (the blue region below)... once that flow had left, the weakness was the same in both vol and cash... notice they tried to ramp stocks into the close by slamming VIX again... FAIL!!!
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Charts: Bloomberg