Futures market

Goldman Questions Rally, Fears Looming Event Risk Amid Record VIX Longs

Volatility (VIX) is now at its lowest level since before the August sell-off last summer yet CS Fear Barometer remains elevated leaving the spread between the two options-market-based indicators is at its widest ever. With the VIX ETF complex accounting for a record 85% of the outstanding open interest in the VIX futures market, the tail and the dog are now wagging each other in increasingly unstable trends, as Goldman sums up, the options market seems to be questioning the quality of the rally and continues to price in more adverse outcomes.

It's Official: The Oil Surge Was Driven By The Biggest Short-Squeeze Ever

It is now official: as crude soared 50% since Feb. 11, Bloomberg writes, the number of bets on increased prices has barely budged. "Instead, the upward pressure on prices appears to have come from traders cashing out of bearish wagers at an unprecedented pace. The liquidation of short positions during the last seven weeks covered by data from the U.S. Commodity Futures Trading Commission was the largest on record."

Futures Rise In Thin Trading On Back Of Yen Weakness; Europe Closed

With European markets closed across the continent on Monday as the Easter holiday continues, overnight Asia was busy with China Shanghai Composite letting off some steam, and closing down 0.7% at session lows on concerns the Shanghai and Shenzhen home bubble have been popped by the politburo, Japan was a different story with the Yen sliding following a report by the Sankei newspaper that Abe will announce in May his intention to delay the planned levy hike, coupled with additional reports that Japan will unveil a major fiscal stimulus (and just on Friday Abe said he is "not thinking at all about supplemental budget" at this time).

It's Not The Economy, Stupid; Barron's Admits "It's A Bullard Market"

It appears the complete decoupling from economic reality of the so-called US equity 'market', combined with the collapse in a data-dependent Fed's credibility - topics we have extensively covered - has reached the mainstream. Barron's always-insightful Randy Forsyth exposes the ugly reality that this is a "Bullard" market and we are just living in it as the flip-flopping Fed head is "the most visible telltale of the shifting winds of Fed expectations. Investors navigating the choppy waters of the financial markets are forced to change tacks accordingly."

Another False Oil Price Rally: Crossing A Boundary

"The oil-price rally that began in mid-February will almost certainly collapse. It is similar to the false March-June 2015 rally. In both cases, prices increased largely because of sentiment. As in the earlier rally, current storage volumes are too large and demand is too weak to sustain higher prices for long."

Fed Mouthpiece Parses Timid Janet's Latest Pronouncement

"Federal Reserve officials reduced estimates of how much they expect to raise short-term interest rates in 2016 and beyond, nodding to lingering risks to the economic outlook posed by soft global economic growth and financial-market volatility."

Goldman: "The S&P 500 Is Overvalued"

"Operating and adjusted EPS both indicate high S&P 500 valuation. We show the impact of different macro assumptions on our EPS forecast. S&P 500 is highly valued regardless of how investors measure earnings."

JPM's Head Quant Explains Who Unleashed The S&P Rally, And What May Happen Next

What is the fate of this market rally? In terms of technical flows, more inflows would come if 3M and 12M momentum turn positive, which would happen at ~2025 and ~2075, respectively. If volatility stays subdued, volatility-managed strategies could also increase equity exposure. However, equity momentum is also vulnerable to the downside and a move lower could be accelerated by 6M and 1M momentum unraveling at ~1950 and ~1900, respectively.

"Has Everyone Lost Their Freaking Minds?"

It’s getting weird and the market is having a tough time figuring out what to take seriously, what to ignore, what to laugh nervously about and what to just laugh at. Are serious economists actually have a debate about whether it is a good idea to just print up cash and pass it out? Is that really monetary policy? Are governments really talking about banning actual currency, the very money created by that government? Money that depends, oh by the way, solely on people’s trust that the government will stand behind the money they are about to outlaw? Has everyone lost their freaking minds?

NatGas Tumbles To 16-Year Lows

More "unequivocally good" news. On the heels of a smaller than expected drawdown in natural gas inventories (-117 vs -135bcf), Nattie futures have tumbled to their lowest intraday level since 1999...