High-beta growth-hoping Russell 2000 stocks managed to gain 5.2% from last week's lows and make new all-time highs - sure why not. The S&P and Nasdaq regained Friday's highs on moar hopes of a deal (and held them even on the meeting postponement) giving a little back into the close. Spot VIX hugged stocks all day long and as with EURJPY (carry) provided the ammunition on a day bereft of real news and strewn with rumors. With Cash Treasuries closed, futures indicated early modest strength which gave way to selling across the complex in the afternoon. The shortest-dated Treasury futures underperformed (we suspect on some liquidity premia given Bills were closed). Gold and Silver recovered to solid gains before the US equity exuberance began, then leaked lower all day long (gold unch, silver -0.35%). It wasn't all ponies and unicorn farts for the bulls though as December VIX futures went well bid this afternoon - notably divergent from equity's exuberance.
Russell 2000 hits new all time high and volume grows increasingly divergent...
[4]
The postponement took a little shine off the day but was soon aggressively bid back to the highs...
[5]
and it really is not a short squeeze game as "most shorted" did not really appear to outperform so aggressively...
but was all about carry FX lifting us tick by tick back to the highs...
[6]
Bonds were offered with the short-end underperforming...
and while Spot VIX hugged stocks, Dec VIX was well bid as protectionwas sought more aggressively past the new potential deal date...
Gold and Silver recovered their overnight losses and rallied back to pre-dump levels from Friday but as Europe closed today... so PMs were sold...
[7]
Based on Bonds (futures), PMs, commodities, credit, FX, and swap markets, Capital Context's CONTEXT model shows a very similar pattern to Friday.. very little interest in uber-risk-on from aything but the stock market....
[8]
Charts: Bloomberg