Missile-Mania Sparks Stock-Buying Bonanza As Yield Curve Tumbles

by Tyler Durden
Mon, 04/16/2018 - 16:01

As a reminder, here's what happened in 2017 when Trump shot missiles at Syria...

And here's what happened this time...

Missiles were dropped...

Correlations broke everywhere today...

 

Trannies were flying today - up 2.4%!!!! but for the major indices, it was all about the overnight action that drove the main thrust of gains...Stocks went nowhere from the European close...

 

Futures show the gap open on Sunday night and retest of Friday's highs...Futures closed the day session around the same levels as they opened on Sunday night..

 

Machines dragged The Dow up to run yesterday's high stops and the 50DMA... but then it rolled over...

 

The S&P 500 managed to clamber back into the green for the year (2673.61) and test its 50DMA...

 

VIX dropped back to a 16 handle...

 

Mixed picture for bank stocks with BofA higher on earnings but still down from Friday's pre-open banking earnings drop...

 

NFLX was lower (ahead of earnings) among the FANGMAN stocks...

 

While stocks loved the missile strikes, bonds did not...

 

Treasuries were mixed on the day...but rallied throughout the US day session

 

But the 30Y rallied from the US open to end the day unchanged...

 

Driving the yield curve back down to its flattest since Oct 2007... (and 2s10s dropped below 45bps)

 

The Dollar Index slipped back below Friday's lows...

 

The Ruble spiked after WaPo headlines claiming Trump has halted Russian sanctions...

 

Cryptos slid on the day but are marginally higher from Friday's close... (with Bitcoin holding around $8,000)

 

The apparent demise of geopolitical fear prompted selling pressure in crude but PMs rallied on a weaker dollar...

 

Another disappointing data for macro data enthusiasts...

Comments

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NugginFuts Mon, 04/16/2018 - 16:02 Permalink

Well, I'm glad that's over. You can all come out of your foxholes now! The coast is clear! Give us all your money and all will be well!

Thanks,

Wall Street Banksters

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Keltner Channel Surf Mon, 04/16/2018 - 16:04 Permalink

Trader’s Corner

Tomorrow’s headline will get it slightly wrong – not so much a ‘mission accomplished’ rally as a continuation of the reversion move to SPY-50 some folks talked about here last week, interrupted by Syria uncertainty-driven vapor volume then finished today on more light trading.  And while it may seem merely a semantic difference between ‘relief rally’ and ‘gate opening’ moves, it was less so from a trading perspective, as getting long early and often in spiky pre-noon jostling, with inevitable targets in mind, was your key to success.

Fledgling Russell traders should note the prominent “Little Brother” effect seen today, in which the precise moment SPY-50DMA was tagged also marked the day’s IWM top.  Just like when Big Sis took you to the mall, and you had to skedaddle, even when about to break the pinball record, when she said it was time to go, so too must EVERY Russell 2000 trader keep at least one tiny SPY daily chart with major DMA’s and envelope levels on one of their screens, then tighten stops when ANY key SPX level is approached, regardless of what your silly-ass 45%-infallible technical indicators say.

Finally, as this is OPEX week, note the nervous, dragonfly Russell action in the first hour and last two, perhaps leading some to start with 5-min charts early, project mid-day based on 30/60 min. momentum, then either end the day early, or CAREFULLY tiptoe through the last 120 (no ‘standard’ VWAP plunge ‘n’ spike, as seen with SPY).

All in all, a good start to OPEX week, with a number of solid though carefully hewn opportunities, amidst the inevitable machine handbag fights.

Happy Trading.

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Keltner Channel Surf 10044 Mon, 04/16/2018 - 17:24 Permalink

Kind of a slow day, everyone's probably filing for a tax extension, so I thought I'd give it a rest.  But, since you asked, here's an old one from the inventory:

“Doves Will Tear Us Apart”   from  “Love Will Tear Us Apart”      by Joy Division

When shorting bites hard, as Fed Funds stay low
And leverage rides high, but incomes won’t grow
And we could ‘sell in May’ or take off in ramp mode

Doves, doves will tear us apart again

Why did the volume go cold?  Turned away the buy side
Is their timing that flawed?   GDP well’s run dry
Yet stocks still seem surreal, the bull’s slept through nine lives

Doves, doves will tear it apart again

You cry out to the sheep, all your flailing exposed
As we trace out a top, desperation takes hold
That markets so large just can’t function no more

Doves, doves will rip it apart again

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Overleveraged_… Mon, 04/16/2018 - 16:05 Permalink

Thank you Mr. Trump! No matter what happens in the world, what we do overseas, what happens in the USA and what happens in the markets, you can ALWAYS count on the Stock Market approaching brand new All Time Highs. The fact of the matter is, nothing matters anymore. We are so past the point of valuation sanity that there will never be a "Crash" again. I am still fully invested in 3x Long Leveraged S&P 500 and would recommend all readers of this comment to do the same. Maybe back in the 90s or 2000s crashes would be a likely event, but no longer anymore. We have structued everthing around avoiding a crash. Infact, we have a SIGNIFICANTLY better change of seeing S&P 500 at 10,000 before we see it below 2000 ever again.

I quit my job over 5 months ago and have been living off earnings from 3x Long Leveraged S&P 500. Sure, I've taken a bit of a hit but its all good. I can afford rent in a solid apartment and I can do whatever I'd like to do during the day. The fact is, working sucks. I would much rather just do whatever I feel like because I have the money. 

Folks, it's not too late. There is still an excellent chance we finish the year at 3000. Get on the train!

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Keltner Channel Surf Overleveraged_… Mon, 04/16/2018 - 16:21 Permalink

My nickname for this guy is "Over-Beveraged", and I appreciate his tongue-in-cheek (hopefully not swallowed tongue) humor.

Still, it's worth noting, once again, for the uninitiated, that 3X leveraged funds are designed to give you 300% of the associated index only on a DAILY basis and, given odd quirks due to how they're constructed (with futures, etc.), will NOT give you 3X the index return when held over long periods.  Short leveraged ETFs, due to decay issues (and the fact that they're designed, theoretically, to go to zero, 'zero hedge' if you will) are especially prickly, often biting long-time holders in the hindquarters.

So, as they used to say in that TV show some of us are old enough to remember:  "Be careful out there ..."

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Squid Viscous Mon, 04/16/2018 - 16:11 Permalink

for everyone who shorted NFLX into another we added x.x million subs (mostly free, will quit next week)but missed every other number...

you loose again, loosers, loost, loose, why does every idiot put two o's in each conjugation?

lol

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IntelligenceActs Mon, 04/16/2018 - 18:13 Permalink

When will people learn? The equity market is a propaganda tool of the Deep State.Most of the Dow and S&P are multinational companies that are working AGAINST the interests of America and anyone who loves FREEDOM! The only way we can reclaim FREEDOM and THE RULE OF LAW is to be OUT of the equity markets (or be SHORT them), buy GOLD, SILVER (or tangible assets), and help our fellow people to understand the fraud and corruption that is Wall St. If you play along, you are complicit and subject to the wrath of what follows...