Another day, another melt-up on the lowest volume of the year and VIX collapse. The Dow and the Nasdaq almost made it back to unchanged for the year; The Dow almost made it back to unchanged for May; but as the S&P surged towards its record highs once again, "most shorted" stocks led the way with a massive squeeze (almost 4% in the last 2 days). VIX broke back below 12 once again trading at its lowest in 14 months. Equity markets decoupled notably once again from bonds. Treasury yields rose once again at the long-end (30Y +8bps on the week, 5Y -1bps) but the steepening trend stalled today. The USD rose today (+0.2% on the week) led JPY weakness. USDJPY was in charge of stocks with a correlation over 90% once again. Commodities all closed higher with WTI testing $104 again. HP's 'early' release of earnings appeared to take the shine off things into the close as VIX gapped higher back above 12 to close...
This is the lowest NYSE volume in at least a decade - even for this holiday time of year...
[5]
Spot the down-day in the volume chart...
[6]
"Most Shorted" stocks have surged almost 4% in the last few days - almost tripling the broad market as hedge funds have yet another bad week...
[7]
Squeeze-a vu...all over again...
[8]
As the Momo stocks have exploded higher since last Thursday's lows...
[9]
Which is what supported the Russell and Nasdaq in their epic ramp of the last few days...
[10]
A close-up of today...
[11]
VIX was run even lower - to its lowest intraday since March 2013... (still room to go for the 9.39 all-time intraday lows on 12/15/06)
[12]
But look at the illiquidity in VIX... and a very ugly close once the HP reesults hit...
[13]
USDJPY was in charge of stocks...
[14]
Once again - stocks decoupled from bonds... that hasn't worked out so well recently for stocks...
[15]
Commodities rose on the day - despite a higher USD
[16]
Charts: Bloomberg
Bonus Chart: The spread between Q1 GDP and Q2 GDP expectations is now over 4percentage points as Q2 jumped this week to +3.5% consensus...
[17]
Bonus Bonus Chart: Looks like the Fed's transmission mechanism to housing has finally broken...
[18]