Dip-Buyers Dominate As Bonds, Stocks, Dollar Shrug Off China Threats

The day started off with some excitement...

But by the close all was forgotten...




China put the fear of god into a few bond traders this morning...(30Y spiked 5bps higher only to close down 1bps on the day)




And prompted the herd-like response proclaiming that this is it - bond yields are blowing out. However, thanks to a super-strong 10Y auction, bonds were bid back into the green leaving 10Y yields lower on the day...



And the yield curve flattened dramatically...




All the major US equity indices closed lower (except for Trannies which ramped into the close), but were well off the lows...




Equity futures show the full excitement of the day better than the cash open to close...




VIX was briefly punched back above 10 on China and more shenanigans around the cash open/VIX auction, but closed below 10...




High yield bond prices continue to tumble...




Breaking back below its 50-, 100- and 200-DMA...(almost unchanged now on the year)




The Dollar Index ended lower but followed the same pattern as everything else today as it plunged on China headlines but it spiked after headlines about US pulling out of NAFTA struck... then faded again after The White House statement that Trump's position had not changed...





The peso and loonie tumbled... but then rebounded after The White House made the statement




This NAFTA headline also slammed GM, Trains, and Constellation Brands (as well as Canadian and Mexican ETFs). The stocks rebounded modestly on The White House statement...




Gold gained on the day (but gave back some of the China panic gains) as WTI ended the day lower marginally...



Gold is outperforming Bitcoin YTD...



In crypto land, ETH was the winner again and XRP the loser and BTC and LTC trod water. Notably, the crypto space rallied after Buffett's negative comments...




Finally, Rudy Havenstein summed it up perfectly...


Hammer823 Wed, 01/10/2018 - 16:02 Permalink

Crash Program #2 run today.  An opening drop, followed by an immediate reversal between 9:45 and 10:30. Flatline rest of day.

There are 3 Programs run by the banks that make markets fall.  Crash Program #1 is a sharp drop in the morning followed by a steady reversal between 11:00-1, reducing losses by half or more by close. Crash Program #3 is a steady morning drop that continues to noon, either slowly reversing itself during the afternoon, or, very, very, rarely, continuing to fall, closing at the lows of the day.

It's really that simple.  We don't have a market at all.  Just pre-programmed subroutines running the same pattern day after day.

D.r. Funk Wed, 01/10/2018 - 16:08 Permalink

SUB 11 VIX fabricated forced operation
3% DRAWDOWN LAPSE closer to reaching that point of elimination
ADDITIONAL FORGED LEG not gonna convince me [it] can go forever
PROGRAMMED ATH PSYOP ' cant go forever '


Keltner Channel Surf BlueHorseShoeLovesDT Wed, 01/10/2018 - 17:11 Permalink

You guys know this, but after reading the various posts, a few thoughts:

- Prices are simply the sum total of all market participants, the for-profit trading players using sawtoothing mean-reverting algorithms intraday on modest volume, while the buy side largely concentrates on the first and last hour, obviously holding longer and largely determining overall direction and slope.

- The failure rate for trading is now thought to be over 99%.  It's pure fantasy to believe a single entity (or consortium) chooses from a Chinese menu of limited 'programmed' options that can be easily exploited.  Other than the Dow, the other indices all saw extremely spiky action today, with large stiletto wicks on most half-hour candles (especially IWM), with the Dow plummeting back to VWAP at 2:30, not far from where it was after the first hour.

- Today was a whole lotta nothing from 50 thousand feet, but very active on 2 and 5-min charts for the bulk of the day, with algos automatically constricting the range after seeing the opening liquidity and volume evaporate. 

- It doesn't require a conspiracy for a small opening dip on a 'bonds are dead' headline with no follow-through from institutional players to be machined back up, especially in early January ...

In reply to by BlueHorseShoeLovesDT

wmbz Wed, 01/10/2018 - 16:15 Permalink

Wait just one damn minute! This shit is rigged!

The DOW was supposed to go up 200 points today. I call for an immediate investigation.


gm_general Wed, 01/10/2018 - 16:27 Permalink

Every day a drop around 10am-12pm followed by a "recovery".  Why would people dip it in the first place if they did not mean it? Just screwy. How long can predictable patterns keep up that can be easily used by even the stupid?

Mad accountant Wed, 01/10/2018 - 17:05 Permalink

This madness has got to end at some point. This has been a zombie markt for the last two years, but it really has been trading like a penny stock the last 5 months. In the meantime companies with no assets to speak of (or product) sport valuations of 500+ mil (WATT)

Wise Gold Wed, 01/10/2018 - 17:06 Permalink

The prophetic predictions of Shepwave keep coming true in the markets.  Last I heard is that volatility will probably begin back with real purpose on Thursday.  Has anyone heard anything different.  Still waiting for tomorrow's reports.