For a brief moment this morning - following Jim Cramer's exclamation that anyone who is still bearish following the China Trust bailout is "stupid" - there was hope that the drama had stopped unfolding. However, it has not. JPY carry continues to be battered and that is dragging every levered-long trade lower from European bonds to US small caps. The invincible Trannies have collapsed and are now -3.25% in 2014; having risen more than 6.5% from the Taper decision day, Trannies have tumbled to a mere 0.8% gain. But the S&P 500 and Russell are catching down to the Dow's underperformance and have given up their post-taper gains. Rather stunningly, Discretionary and Homebuilders are now the worst performing S&P sectors from the taper. VIX has surged to touch 19% - its highest since October 9th. Treasuries are modestly bid (1-2bps at best) and the USD is flat (despite major swings in AUD, CAD, and JPY). Credit is trading back to 3-month wides and stocks are catching down.
Indices have collapsed - giving up all the taper gains in 3 days...
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As Hombuilders and Discretionary collapse to worst performers...
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And credit is rapidly giving up the post debt ceiling gains...
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