For the 3rd day in a row, traders in credit and equity markets bid for protection. VIX rose 1 vol to 13.5% (diverging notably from stocks) and High-yield and investment-grade credit protection is back at 1-week wides (again diverging notably from stocks). USD weakened back to pre-FOMC levels (-0.4% on the day) led by EUR liquidity needs by the look of it, was ignored by the commodity markets which saw silver and gold tank (gold < $1200) and WTI crude back under $100. Treasuries rallied modestly (yields -3bps) as stocks wriggled sideways on super-low volumes (with NASDAQ underperforming and Dow outperforming to break the new record-high 16,500 level). Homebuilders outperformed even after the dismal home sales data with Energy worst on the day.
Today's S&P 500 futures range was the lowest in 6.5 years...
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The Dow closed above 16,500 at another record high but note that high-beta Russell 2000 dumped into the close...
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Managers are protecting gains in stocks...
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and credit...
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Commodities - especially precious metals - were hammered... (despite news of the China gold imports dropping 12 hours ago, when it hit Bloomberg headlines it seemed to trigger more selling this afternoon)...
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The USD fell once again back at FOMC levels...(notice any pattern post-taper? sell European session, buy US session?)
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As an aside, while correlation with JPY crosses remains - it is clearly fading (and only in sync during US session today).
Treasuries rallied on the day - though most of the strength was during the European session...
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Charts: Bloomberg
Bonus Chart: Gas Prices have never been higher for this time of year and are at 2-month highs...
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Bonus Bonus Chart: The TWTR BTFD'ers were out en masse - but had an ugly close as the stock-du-jour closed close to bear market territory...
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