Stocks Surge But Cryptos Tanked, ARS Spanked, & Dollar Bid Yanked

So... Trump stirs up the Middle-East by withdrawing from JCPOA and... The Dow gains 600 points (best week in 2 months), VIX tumbles to a 12 handle (lowest close since Jan), Oil rises just 1.25% on the week (but at 4 year highs), Gold managed a modest gain (the first weekly rise in a month) and The Dollar and The Long Bond end the week unchanged...



But it all started last week...


VIX was monkeyhammered to a 12 handle...

VIX lowest close since Jan..

The Dow found resistance at the 100DMA...


AAPL was set for the longest daily win streak since 2010... but closed lower today...


Symantec was clubbed like a baby seal..


TSLA stock remains decoupled from reality...


Healthcare-related stocks dipped then ripped on Trump's announcement...


Bank stocks started to fade a little relative to the market in the last two days as the yield curve collapsed...


Treasury yields were very mixed on the week with the long-end lower and short-end higher...


Which meant massive flattening across the curve:

  • 5s30s -6bps to 27bps (flattest since Aug 2007)
  • 2s30s -5bps to 57bps (flattest since Aug 2007)
  • 2s10s -2bps to 43bps (flattest since Sept 2007)
  • 7s10s -2bps to 2.7bps (flattest on record)
  • 10s30s -3bps to 13bps (flattest Jul 2007)

As CPI sparked a significant dump...


30Y Yields peaked midweek then were bid into the weekend...

Once again 30Y yields find resistance at around 3.20%...

10Y Yields rejected 3.00% again...


The Dollar Index closed the week flat as the early week bid evaporated on Thursday and Friday...


ARS was spanked early on before BCRA piled in with massive $1 billion intervention to rescue the day (but in context the bounce is marginal ahead of next week's massive liquidity needs)...


Cryptocurrencies suffered this week as MtGox liquidation rumors, Nvidia forecasts, and a South Korean exchange raid sparked FUD...


The dollar's wild ride left all commodities green on the week, though we note that WTI gave back a lot of the mid-week gains...


Finally, we leave it to Gluskin-Sheff's David Rosenberg for some much-needed context...



Snaffew Coinista Fri, 05/11/2018 - 17:16 Permalink

2,000 cryoptocurrencies currently trading on the way to 10k then 100k.  The crypto industry is self cannibalizing and inherently dilutive.  Buying something for the name based on the greater fool theory may work in the short term, but the long term greater fool will be the buyers at these ridiculous prices.  Cryptos are made from nothing and have no inherent least fiat has the military and gdp of the sponsoring country to back them somewhat and pm's are tangible forms of wealth used for millennia.  Bitcoin has gone from $800 to $20k and back down to $9k in the past year.  Any wild ride like that is sure to spark a whole army of traders. The quintessential definition of a fad.

In reply to by Coinista

tr123 Snaffew Fri, 05/11/2018 - 18:00 Permalink

They may certainly be a fad, but the inherent value is that they cannot be made from nothing. A tech geek can make a new coin from scratch, sure, but nobody would want it so value = $0. What he can't do is create a Bitcoin to sell 5min later for $9k. If he wants one he has to buy it from somebody willing to give it up. It may be an impractical system in real life, but as a theoretical concept it's very sound money.

Fiat on the other hand can be loaned into existence by a registered bank to anybody who they believe is credible enough to pay them interest. Defaults are bookkeeping, the interest is their revenue and it's effectively a payment for the privilege of being able to use freshly printed credit money. It's both inherently inflationary and easy to control centrally (Fed + Gov), a problem that cryptos like Bitcoin were intended to solve.

That's the inherent value, the price tag you slap on it of course varies wildly.

Agree with everything else you said, and personally am not interesting in owning BTC. I only short it, other coins will be better and any gains in BTC are a function of the greater fool game playing out, which by the way is totally applicable to virtually any other security that doesn't offer some kind of yield.

In reply to by Snaffew

tr123 Snaffew Fri, 05/11/2018 - 19:03 Permalink

How would that be different from a stock split? Price adjusts for new volume, same total value. Maybe it's possible that a coin would renege on its limit, but that gets reflected in its price pretty quick. XRP's December explosion is a great example of news on supply driving folks crazy.

If you meant forks for new coins then those are separate issues. Bitcoin Cash worked out pretty well but Litecoin Cash is hardly worth a quarter, neither are the same as their original or are even affiliated, they hate each other if anything.

In reply to by Snaffew

Rise Of The Machines Fri, 05/11/2018 - 16:09 Permalink

Yes the bears lost their balls and their money right at the critical moment. It's back to the computer controlled market that only goes up, where bad news is good and good news is better. Presumably VIX goes back to zero, ok 8 then, and we all fall asleep through the summer. Dunno how everything got fixed so quick!

D.r. Funk Rise Of The Machines Fri, 05/11/2018 - 16:26 Permalink


#1 exactly what any overseer peeking at zh wants to see, "uh bears uh lost uh their balls yeah" No they didn't. After the last few years of 9th inning, and last several months of endgame? You're giving them some fodder

2 No, it's not just "BACK" to the fantasyland status quo all of a sudden. After a couple weeks of m.a. obtainment and vix softening. Ridiculous declaration/conclusion/posture. The logic, clear-ly, leans toward another type of fabricated mini run, as has already been the case a few times since start of feb

In reply to by Rise Of The Machines

D.r. Funk Fri, 05/11/2018 - 16:12 Permalink

This 'mini leg' was Easily seen as another and/or just another antic and trick post-crack [Crack was end of Jan. start of Feb.]
The assertions, my assertions, our assertions, at the time were: This is it this Is the crack, however, there will be ...tons... of perceivable and easily-perceivable manipulation toying.
That clearly was the case. The +300 +300 +300 +300 +300 following the crack etc and at least 3 instances since then.

The mini leg of the last few to several trading sessions easily conforms to this pure-bullshit-shaking, CONTRIVED. Not fooling us or at least, me,aholes!

Looks to be the final one [antic leg] with the O i g report finally, finally, fucking coming to a head. Soon.

Today's intraday negations and ending corroborate. The forced open-surge. The natural dropping, yet at 2:10pm when the dow MOMENTARILY and BRIEFLY crossed the flatline, INSTANTLY was booted back up. So clear, for example, the subroutines running the desires of the session outcome, when a slowly naturally flatlining dow [about 3 hrs of downdrift] is so instantaneously altered. Of course close-reboosting. All fitting in conjunction with one last perception-toying-agenda and/or SHAKING-CAPITULATION-AGENDA multi day run. [Before either the o i g convergence or contingency takedown via middle east or other] See My Finger

Traderone Fri, 05/11/2018 - 16:13 Permalink

Loadsa opportunities and loadsa money on the U.S. indices this week.

I genuinely think we non US folk are more grateful for these markets than the locals TBH.  Same time next week fellas???

Fiat Burner Fri, 05/11/2018 - 16:19 Permalink

It all started last week when the Fed sent their minions out just as the indices were breaking down to sweet talk the "market" with promises of lower for longer regardless of inflation.  

davatankool Fri, 05/11/2018 - 17:09 Permalink

stocks went higher this week due to lighter inflation data, however stocks will drop for the same reason as the data will continue to worsen incoming weeks. Q2 not looking good as macro rolling back quickly. 2018 dowj chart looks so similar to 2008. you guys can take a look. the last rally after the peak in last Dec. will this year be the year?

again, trade it, dont bet on it.