EOD

End of day internals looked lie this:



Trade was on lower than avg. volume (NYSE 726 mln, vs. 800 mln avg; Nasdaq 1498 mln, vs. 1741 mln avg) with mixed advancers/decliners (NYSE 1430/1531 Nasdaq 1268/1225)


As for the Credit/Risk/Sector charts...

 Commodities leaked all day closing just off their intraday lows, I don't think the commodity action had anything to do with the end of day decline, rather most probably a reflection of the worries over China that sent overnight sentiment in Asia sour.

 High Yield Credit was a bit interesting as it too sold off most of the day, I suspect this has more to do with the blowout in sovereign spreads in the EU after 3 month of relative quiet on that front. As I mentioned earlier, be prepared for the EU to come to the forefront. Yields in Spain and Portugal will likely be closely watched, although Spain is the main concern with sentiment drifting toward, "Spain is following in Greece's footsteps" and as mentioned earlier, the loan to deposit ration in the EU is the highest of developed nations, they are running low on pledge-able assets that the ECB will accept and the ECB seems to be clear on outright monetization, they aren't doing it. With few assets left to pledge as collateral, LTRO 3 is becoming a distinct non-probability; meaning if the rest of the EU gets worked up about Spain and rising yields (after the Greek Bond holders got screwed every which way and the ECB created a senior and subordinated bond market), the probability of bond traders stepping in to help  Spain is very unlikely and as we have seen, the LTRO Carry trade didn't go toward the purchase of sovereign bonds, it went toward a negative carry trade (LTRO interest rate 1%/ECB deposit facility .75%=negative carry trade of .25%) in the form of the ECB deposit facility to shore up tier one capital and after seeing their loan to deposit ratios, it's no wonder. A bank run in the rest of the EU wouldn't be anything like a US bank run, it would be many, many times worse.

 Rates diverged from the SPX and sent it lower several times today as TLT was one of the best performing ETFs today. What's the game in treasuries? That remains to be seen, although earlier today it looked like TLT was getting ready for a pullback.

 The Euro was synced with the SPX all day until the EOD plunge, the obvious answer to the question of the chicken or the egg is Apple.

 The $AUD was well synced as well until the EOD sell off, I'm still curious as to whether the $AUD is going to bounce, even if it does, the trend is pretty clear there as the carry trade seems to be in full unwind mode, but everything bounces.

 High Yield Corp. Credit was interesting, I do think this is correlated to AAPL in some partial way and certainly seemed to give a heads up on the EOD sell off, it closed at the intraday lows.

 Here's Energy, it was synced with the market earlier, but came unglued after noon time and wasn't moved at all by the AAPL initiated plunge.

 Note Energy stayed rangebound through the close.

 Interestingly Financials weren't moved by the end of day plunge much either, although they were not strong performers any way. It is interesting how they came unglued from the SPX around noon time as well, there's something there, I'm just not quite sure what it is yet.

 Financials coming out of the triangle, it remains to be seen if we get a head fake move here, the initial one wasn't very impressive. In yellow Financials were rangebound through the close.

 Tech did move with the SPX, in fact a bit before the SPX, again, it's AAPL.

 Here's Tech today.

As for sector rotation today, it's mixed, Financials clearly leaked lower as did Energy and late in the day Tech. Utilities were somewhat flat, but the defensive Healthcare and Staples were in rotation today which raises some questions, Basic Materials maintained today as did Discretionary. 


To my surprise, there was NO dominant Price/Volume relationship today, yesterday's was very strange and we may be seeing why today. 


In the E-Mini Futures (ES), they saw the smallest average trade size of the entire year today, again interesting, but I'm not sure what to make of it quite yet-are the bigger traders pulling out? 


The ICI report came out today and Domestic Equity Retail funds saw another $2.9 bn in outflows despite this "stellar" rally. This is the 4th consecutive outflow of funds and the 23rd outflow of the last 27. 



As for the AUD/USD pair that seems to be fairly well correlated to the market...

 The trend is clearly down.

This is the intraday trend line I was watching for a possible breakout, it hasn't done much yet. There was a 3C positive divergence there, but as I mentioned, it wasn't that big and could have simply been enough to halt the slide lower and start a consolidation. On the other hand, a bounce can't be ruled out. If the AUD fails to move much overnight I'll check 3C in the morning and see what's going on there.  A bounce would likely bounce the market a bit (there still is a gap in the Dow), but the trend here is clear and bounces are a normal part of any trend.






I'll be checking on the $AUD and ES later and if anything exciting pops up I'll post it.