Another volatile day ended with the Dow is down around 5% in January - the worst start to a year since 2009 (and 2nd worst since 1990) and the worst month since May 2012 (a 3-sigma miss of the average +1.5% per month gain since 2009's lows). Japan, Brazil, and Russia suffered greatly on the month as gold miners, Egypt?, and US Biotech did well. There is a huge 380bps spread between the performance of the Industrials and the Transports YTD. Gold had its best month in the last 5; Treasuries rallied with 10Y yields dropping their most since May 2012; USD rallied the most in 8 months with JPY's biggest rally (and Nikkei's biggest loss) since April 2012.

Quite a January...

Trader's Almanac - every down January on the S&P 500 since 1938, without exception, has preceded a new or extended bear market, a 10% correction, or a flat year. As we also noted here, The JAJO Effect

Perhaps this image of a huge boulder ploughing through the Italian countryside sums up the effect the Fed has had on EM (the shed that is destroyed) and the US (the house is still standing but the foundations are faltering)...

On the week, the S&P and Nasdaq pushed up to unchanged on the week and EM was proclaimed fixed - only for the market to drop rapidly into the close

It seems stocks disconnected briefly from JPY carry only to revert lower into the close...

Year to date there is a huge performance gap between the Dow Industrials and the Transports...

and since the start of the Taper, the Dow is red...

Treasuries rallied 3-6bps on the week...but down 25 to 38bps on the year!!

Gold dropped 2% on the week, Silver 3.75% but on the month gold is up 3.2% (as copper has lost 6%)... (note the shit on January 22/23)

Since 1/24, JPY has been on a tear higher (and CAD getting hammered)...

The so-called "fear index" VIX diverged bearishly for stocks into the close... suggesting people were hedging into a troubling weekend.

Across the world's equity markets, Nikkei Volatility, Argentina, Arca Gold Bugs and Egypt are among the best performers so far in 2014 and Japanese REITs, Brazil, Russia, and India are worst...

(click image for huge legible version)

Charts: Bloomberg

Bonus Chart: Credit is still waving its red flag...