Good news (Chicago PMI) was very bad news and sent stocks into freefall early on. Hedgers then appeared to lift their protection (sending VIX lower) and igniting a surge back to the highs in stocks, tagging the stops, and then stocks slumped to end October (among the best month in the year for most indices) with a 2-day losing streak (the first in over 3 weeks) but EU stocks outperformed. Stocks had been ignoring the "taper-on" trends in Bonds (7Y TSY +5bps on week), USD (+1.3% on week), and precious metals (-2% on the week), but into the close, volume picked up and equities tumbled. Silver and Gold were monkey-hammered lower (ending Oct +1% and-0.3% respectively). FX markets saw USD bid aggressively (though CAD strengthened against the greenback). Credit remains considerably less enthusiastic than stocks. An ugly close for stocks... (blamed on Israel for now)
What exactly were stocks thinking... blue line (green arrow craziness)
The month of October - EU stocks win, WTI crude loses, gold and silver revert to unch...
Trannies had their 2nd best month in 2 years...
Today's equity market action seemed very mechanical...
As VIX protection was sold early (and underlying risk unwound into the rally)...
Credit markets are decidedly uncomfortable...
FX markets remain active with the USD well bid (but note JPY not basking inthis weakening trend and CAD actually well bid against the USD)...
Summing it all up...
Charts: Bloomberg
Bonus Chart - The Facebook roller-coaster... bounced off 50DMA this morning, teste dabove the 20DMA but closed below it...
