Another interestingly odd day. One of the lowest (non-holiday) volume days of the year but a big pick up in average trade size as the S&P 500 e-mini futures shrugged off Treasury strength, USD strength, and Gold's somnambulism seemingly led by an energy sector focused on only one thing - the bounce in WTI. Copper also drifted higher even as the USD leaked modestly higher (as assume the two got some hopium-infusion from China RRR cut rumors early on and sustained momentum as liquidity disappeared in many risk markets. Credit once again was a split-decision with the CDS markets underperforming (and notably thin from our discussions) while HYG (high-yield bonds) decided to lead the way (also on one of its lowest volume days of the year). Treasuries remain in a tight range over the last few days, as EURUSD limps lower, but VIX had a high vol day with its move higher in the face or rising stock prices (up to 20% vol at one point) providing some ammo for the late day surge in stocks as it was sold hard to close -0.25 vols only around 19.5% (as implied correlation broke 71% before plunging into the close).
Stocks pushed back up towards the 50DMA amid low volumes but high average trade size (which smells susiciously like HFT pumps and institutional dumps)...
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and we note that ES has limped up to a relatively imortant resistance level (and failed 3 times to break it today)...(click chart for huge version)
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But relative to CONTEXT and the following Treasuries, Gold, and the USD, stocks were living in their own low-volume world today...
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But HYG seemed to be the catalyst for the exuberance into the close as it ripped to new day highs (amid dismally low volume and what we assume is a plethora of retail market buy orders) even as IG and HY credit echoed yesterday's lack of follow-through...
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and VIX (and implied correlation) had an interesting day - much more negative than stocks...
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and WTI (and slightly less so Copper) outperformed Gold and Silver (despite an early bit of violence into the US open...
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Charts: Bloomberg