Following yesterday's worst day in stocks in 4 months, something had to be done. Starting at yesterday's US close JPY was sold after defending USDJPY 103 and that - along with a slamdown in gold, silver, and VIX provided the admittedly low volume melt-up in stocks today. Trannies and NASDAQ made it back into the green year-to-date. The small beat in retail sales this morning trumped the relative hawkish tones from Fed speakers today as the best day for USDJPY since the taper provided enough magical carry juice to lift stocks by their most since the taper (and the NKY up 400 points) with JPY-ES correlation over 0.92 today. Treasuries bled higher in yield with the belly underperforming (to unch on the week) and 5s30s flattening 3bps. The USD was bid against all the majors with JPY's move the largest as CAD retraced its gains from yesterday to its weakest in over 4 years. Gold and silver were quadruple-whammied today with 4 legs down after daring to show strength yesterday. VIX floored out at 12% once again and leaked higher all afternoon with a late-day press to try and ignite more buying in stocks. In summary, stocks mirror-imaged yesterday's dump with a half-volume pump, that is all.
"V" for Victory... as NASDAQ and Trannies go green year-to-date once again...
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With the Yendex 500 (h/t @Not_Jim_Cramer) continuing its sublime path higher...
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Today's closing S&P 500 futures VWAP perfectly in line with yesterday's closing VWAP... Interestingly, the moment it hit VWAP the rally stopped...
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Healthcare is now the big winner since the Taper...as builders retreat
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VIX was slammed lower out of the gate and lifted stocks... until the European close when it diverged notably...
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The USD is back to unchanged on the week as USDJPY has its 2nd biggest surge in 4 months!!!
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Gold and Silver suffered but retraced back in line with oil and copper on the week...
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But the day saw 4 good efforts to smack down gold...
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Treasuries sold off today (and flattened 5s30s) but remain notably positive post-jobs...
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Charts: Bloomberg
Bonus Chart: The last 3 times the S&P 500 dropped significantly this happened. As dshort.com [14] shows (via kimblechartingsolutions [15]), when the 10Y Treasury yield finds resistance, the stock market seems to want to drop... almost as if someone knows that, given the US debt load, it can't withstand a higher cost of debt
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Bonus Bonus Chart: Some context across asset classes for performance post-Taper (the orange dotted line is the close on Taper day)...
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