Equity volumes were abysmal today... (NYSE lowest in 2014) which means only one thing... a VIX-driven levitation. Bonds sold off at the long-end (30Y +4bps) but the short-end remained bid (5Y -1bp) but did get 5s30s back to 5 week steeps. USDJPY bounced off its 200DMA (~101.25) but did not really support stocks higher. Credit markets did not buy the exuberance in stocks either. What today's ramp appears to have been was a gap-fill for VIX from Friday's dislocation on a day with no macro data to upset the algo stop-run procession. Gold and silver (along with all commodities) overnight but once the US day session opened, the selling began and PMs closed unch. The USD ended down 0.1% led by modest EUR strength (despite ECB jawboning) and AUD weakness (rumors of downgrades). "Most shorted" stocks rallied almost 3% from Friday's lows (when S&P bounced off its 50DMA) as once again a squeeze manufactures broad index pick-ups.
No Volume...
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Take a look at the lower pane and see if you guess (given that is relative volume) which is the up-day in stocks and which is the down day...
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Squeeeeeeze.....
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and high-beta led the way - durr -
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Which lifted the S&P 500 into the green for May...
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VIX played fill-the-gap from Friday and lifted stocks with it...
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But credit was not playing along at all
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USDJPY wasn't buying it... (or its beta to stocks was cranked up 11 on Spinal Tap's amplifier)
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The S&P 500 cash caight this bid off the 50DMA once again... but it is not well supported (by volume, credit, bonds, or JPY)...
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Bonds sold off today after early strength - as Europe closed, bonds started to sell off...
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Gold and silver pumped into the US open and then dumped to unch...
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FX markets were quiet aside from AUD as chatter about S&P downgrade comments sparked some weakness...
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Charts: Bloomberg
Bonus Chart: Treasury Futures shorts have been unwound in general...
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Bonus Bonus Chart: Wondering why credit markets are starting to get nervous...
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Bonus Bonus Bonus Chart: Peak Complacency according to SocGen's Andrew Lapthorne...
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