No Relief in Sight

In violent times
You shouldn't have to sell your soul
In black and white
They really, really ought to know
--Tears for Fears

After yesterday's 'pop and drop' on the debt deal news, we suggested that those positioned for a post-agreement relief rally were hoping that the best was yet to come.

With the benefit of hindsight, yesterday's gap higher may have been it.

The Senate's passing the debt bill today was immediately sold. The SPX closed on its lows, down about 2.5%, on its largest volume in a month. The SPX has now cut decisively below its 200 day moving average. Support rests below on the '25s': 1225, 1125, 1025.

Outside markets have been on the move as well. Gold screamed $30 higher today after the debt passage news was announced. Long bonds rallied again, with 10 yr yields down about 10% in three days. The Swiss franc has been on fire, hitting new highs for the move almost daily and up about 5% in three days. Nearly all foreign markets are retreating. The German DAX, one of the strongest performers worldwide, is off about 6% from yesterday's intraday high.

Add it all up and you get waning appetite for risky assets amid a macro context built on ever increasing piles of debt.

position in SPX, gold