Gold And Silver Win The Week As Dow Sees First Weekly Loss In Seven
Volume was dismal - aside from a massive surge in S&P 500 e-mini volumes as the combo Bernanke bluff and ECB bond-band-rumor hit the tape and exploded stocks up from two-week lows. A late-day attempt to close the S&P green for the week failed and the Dow ended with its first down week in seven weeks - and largest loss in nine weeks - despite a magnificent centrally-planned triple-digit gain today (+100.1pts!) Stocks were 'aided' by new cycle highs in HYG as it saw its best performance in a month - amid massive fund inflows and heavy issuance (notably outperforming credit spreads in CDS land). The shift in HYG does look like some convergence trading with SPY though - after a month of flat-lining. Gold (and even more so Silver) were the week's big performers (up 3.35% and 9.25% respectively) even as the USD only lost 1.1%. Treasuries ended the week better by 9 to 14bps (considerably different from stocks relative performance). The week was characterized simply as stocks bouncing between QE-off (Treasury strength) and QE-on (USD weakness and Gold strength) - on de minimus volumes.
S&P 500 e-mini futures tested to two-week low support and ripped back up to the 'low volume' node in the distribution of prices of the last two weeks - in other words, they needed to auction up here to see if anyone was a willing buyer/seller - and as is clear - that is where they stalled for now... (heavier volume came in at the close/after-hours)
and today's equity rip once again disconnected it from risk-assets after following them lower (and catching down to them yesterday)...
The Dow saw its first loss on the week after six weeks of gains and had its largest loss in nine weeks...
HYG rallied extraordinarily to new cycle highs - though was playing catch up to SPY it seemed - as it had also traded 'cheap' to intrinsics for a couple of days - supported by heavy fund inflows once again...
Yesterday's disconnect 'lower' in stocks to catch back down to Treasuries - was rapidly disconnected back up to USD and Gold QE-on today it seemed...
Buty we can't help but see flows into Gold and Silver...
and Treasuries...
as indicative of considerably more risk-aversion than QE-on fever.
Today's 'confused' market saw Treasuries selling off as stocks rallied
on QE-hope but gold treading water along with USD strength (hardly QE-on-like)...
enjoy the weekend...
Charts: Bloomberg and Capital Context
Bonus Chart: Medium-term S&P 500 e-mini - tested down to trend support - bounced but saw heavy professional selling (h/t @eminiwatch) into this 'bounce' to next resistance...
Bonus Bonus Chart: S&P 500 Sectors Post Tuesday morning's S&P 500 highs... hardly signals belief in the current rally with HealthCare unch (best) and Materials ugly...
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