NASDAQ

Carnage continues. Small Caps have now joined Trannies in bear market territory (down 20% from the highs to September 2014 lows). S&P 500 is now in correction mode (down 10.7% from all-time-highs) as is Nasdaq.

Initially both European stocks and US equity futures were grateful that China has picked at least one asset class to prop up overnight, and rose in an extremely illiquid market with European shares gaining for first time in 4 days, as S&P futures rise even as the MSCI Asia Pacific ex-Japan index just fell to the lowest level in more than 4 years. However, as of moments ago the Stoxx 600 had faded all its earlier gains and was trading near the flatline, as an algo takes out all stops on the top and bottom once more, and looks set to move on to US futures shortly.

"One for the NASDAQ haters: Silver double bubble chart along with NASDAQ chart. Similar feel." - Citi's Brent Donnelly

“The commonwealth has committed itself to a ‘scorched earth’ strategy of blaming its fiscal and structural problems on lenders, Congress and others, in an effort to deflect responsibility and obtain retroactive application of bankruptcy laws.”

The half-life of the latest "market supporting" intervention by the Chinese government: just about 12 hours.

Remember 'The Santa Claus Rally' that Bob Pisani said "we should expect" - well The Dow is now down over 1200 points from the highs just before the end of the year and extending those losses as Reuters reports, PBOC advisors are said to call for steeper yuan depreciation, pressuring the government to depreciate by 10-15%.

They tried to slam VIX (and failed). JPY was sold (but failed). And Crude was temporarily ramped (but failed). So how do you stall a sell-off - BREAK THE MARKET AGAIN!!

"With the macro backdrop more vulnerable today than at any time since the financial crisis, and the S&P 500 and NASDAQ still near all-time highs, we anticipate a downside move to 1900 on the S&P within the first two months of the year. We reiterate our view that Crude and Energy remain structurally broken and possess significant downside from current levels which will only agitate and exacerbate the ongoing collaps."

As Wall Street axioms (Santa rally, January effect, as goes January etc.) are rapidly falling by the wayside at the start of 2016, following a chaotic but return-less 2015, the UBS analysts who correctly forecast last year's volatility are out with their forecast for 2016. It's simple - Sell Stocks, Buy Gold... expect a Fed u-turn.

But, but, but... it's not a market-driven only by The Fed, right?

Before we go into details of the overnight carnage, this is where we stand currently: S&P futures now down 33 points or 1.63% while 2Y Treasury rallies pushing its yield back below 1% as EU stocks extend their drop after China weakened its currency, North Korea says it tested a hydrogen bomb; Brent crude falls to lowest level since 2004.

Derivatives like credit default swaps turned a mere bubble in the US housing market into a global financial catastrophe...