But, but, but... was the common refrain heard across mainstream media - perplexed that i) stocks could close anything but green, and ii) stocks could close green after the FOMC kept the dream alive. Markets broke everywhere (stock and options) and VIX saw flash-smashes a number of times as the great rotation from stocks to levered stocks (i.e. options) continued (in what smells a lot like the 'what could go wrong' 'portfolio insurance' days of yore). Stocks slid lower into the FOMC, knee-jerked up to VWAP, then skidded to 2-day lows, bounced towards VWAP once again then slumped into the close for the worst day in 3 weeks (down a measly 0.6%). Treasury yields had fallen notably into the FOMC statement and snapped higher after (30Y +4bps on the week). The USD had been rising all week and was smashed higher on the FOMC news (+0.7% on the week). Gold and silver kneejerked lower but bounced back (-0.5% and +0.75% respectively) on the week.
The small drop today is the biggest 'collapse' in 3 weeks... kinda sad really...
VIX went lower post FOMC as it appeared hedgers lifted protection and redced underlying exposure...
which is quite clear from this chart...
Which provided an artifical lift to stocks that was faded on heavier volume into the close...
Gold and Silver kneejerked lower but bounced back somewhat...
Treasury yields surged higher...
and the USD surged (and faded back a little)
Credit markets are at 2-week wides - as stocks are just off all-time highs...
Charts: Bloomberg