Low volume, check. VWAP-reversion-algo, check. Equities higher, check. Dow Theory confirmation that was so convincing when Dow Transports were rising? Umm, no. Trannies lost 0.6% today, underperforming the Industrials by 50bps in March now. Breadth was not confirming the gains either. Financials were the best performers - remember we warned yesterday what happened ahead of last year's CCAR [3]. Treasuries had a poor day with yields popping 5bps but 10Y holding below 2.00% into the close. Silver and Oil recoupled on the week now both +1% as EUR strength was enough to offset JPY weakness and pull the USD lower and supportive of risk. VIX remains dislocated from stocks but fell 0.5 vols today ending the day just above 13%.
It's been an odd week...
[4]
The Dow Transports don't seem too happy...
[5]
and neither does market breadth...
[6]
Treasuries have had quite a week but most of it has been catch up to equity's lead last week...
[7]
and FX markets were extremely active...
[8]
as now Treasuries and stocks are back beyond Italian Election levels...
[9]
Charts: Bloomberg