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Manic-Buying Turns To Panic-Selling As 'Illiquid' Stocks Plunge To 5-Month Lows

Just as we warned, liquidity was incomprehensibly low today (below normal pre-market levels during the peak of the trading day) and the intraday whipsaws were meteoric as a closed cash bond market enabled the slightest twitch in USDJPY to send S&P algos into conniptions. Biotech crashed. Trannies were ripped ridiculously higher at the open - then collapsed into correction (-11% from highs); US Airlines have fallen for 6 straight days, crashing 17% (with today's 7% plunge - driven by chatter over airborne Ebola - its biggest in over years). Tresury futures implied a notable drop in yields across the curve (10Y -7bps at 2.21%, 30Y 2.97%, and 5Y 1.45%). The USdollar closed -0.33% led by EUR and JPY strength (but AUD surged 1% extending gains after China data).  Gold ($1234), Silver, and copper all gained on the day as WTI fell once again (despite some intraday strength in the middle of the day). Stocks "flash-crashed" on very heavy volume in the last 30 mins with VIX breaking above 24 (highest in 16 months). All major equity indices are now below their 200DMA with the worst 3-day loss since late 2011.

 

 

Liquidity was simply not there - but but but HFTs?

eMini liquidity is lower than normal pre-market levels

pic.twitter.com/dJXkRGA2Gt

— Eric Scott Hunsader (@nanexllc)

Which meant - just as we warned - epic whipsaws in stocks...

 

As USDJPY tested down towards 107...

 

and Tresasuries led stocks lower all day...

 

Leaving all the major indices red on the day (even after Russell tried to stage a big comeback)... just look at Trannies at the open!! (that's not a fat finger!!!)

 

A look at futures trading shows the magical levitation overnight giving way to reality in the US session...

 

Year-to-date, Dow joins Russell in the red, Nasdaq getting close...

 

VIX punched above 24...

 

Airlines index crushed...

 

Bonds may have been closed but futures implied some big yield drops on the day...

 

Credit was closed today but just as a quick context for where stocks might end up...

 

FX markets were also thin but notable moves in AUD and SEK as the USD weakened again... the moves were dominated by the overnight China data

 

Commodsities rallied (on safety and weaker dollar) but WTI fell once again... (even after a modest rally intraday)

 

Charts: Bloomberg

Bonus Chart: Remember what happened the last time Japan raised taxes...

 

In summary: