No lesser Fed-questioner than Pedro da Costa provides the visual entertainment for today...
Market 'rebound' pic.twitter.com/ve8pIHyfwH [12]
— Pedro da Costa (@pdacosta) August 25, 2015 [13]
But then, with 30 mins to go....
While stocks is "wot reelly mattahs"... today's move in crude oil was simply epic...biggest single day surge since March 12th 2009 - this is a 6 sigma move based on the vol of the last 6 years (the equivalent of passing a man in the street who is 6'11" tall)
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The Dow just went from its biggest 2-day point loss to the biggest 2-day point gain... this is not going to normalize quickly...and sure enough once JPMorgan unleashed their reality omen, [15] and Plosser pointed the finger at GDP and a 'decent' economy, everything fell...only to be rescued in the last 30 mins by a VIXtermination
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Quite a week... well over 7500 Points in the The Dow...
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While the volatility comparisons are all tothe 2008/9 period, we noted another more accurate comparison... This surge looks like the August 2007 period when Geithner leaked the news of a 50bp discount rate cut [18] and enabled the last hoorah for banks to unwind over-extended longs into retail greater fools...
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And there is no volume in this bounce at all...
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VIX remains in backwardation... but plunged today at the front-end...beforee ripping back higher after JPM/Plosser
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After its biggest 2-day rise ever, today's retracement was of similar extreme size to other events over the last 10 years...before it broke higher
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* * *
The day was very wild...
Starting with stocks, we contonued to ramp after China unleashed exuberant plunge protection into their close... a 5.3% bounce into the close!
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And US equities kept running all day as business media cheerleaded mom-and-pop " did you miss your chance to buy low?" - until JPMorgan unleashed some facts [15] and Fed's Plosser peed in the party punch... and then VIX was punched lower in a panic-buying last 30 mins...
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So US Stocks LIFTED 2.3% in last 30 mins... in context China LIFTED its stock market 5% - so Ken Henry must do better.
Just look at the noise in VIX in the last 30 mins...
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Thanks to the biggest 2-day short squeeze in 4 years...
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The equity exuberance was not experienced in credit land...
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Today's rip was driven by energy stocks which in turn were driven by total idicoy as above in Crude...
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Because how manhy times has buying the dip in Energy stocks completely and utterly failed...
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Thinking out loud on levels...
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On the week, everything was awesome to start... but then the Quant Omen hit... but then again - there is always panic-selling driven by VIX collapse...
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But we thought it notable that Small Caps and Nasdaq rolled over after touchingthe opening gap down levels fromlast Friday's tumble...
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The Nasdaq managed to get green year-to-date, but everything else remains red...
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Treasury yields rallied as stocks fell in the afternoon - closing around unch on the day...
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The US Dollar strengthened once again on the day but faded post EU Close with USDJPY dropping after JPM dropped its reality bomb...
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Commodities were where the real action was today...
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With crude the standout craziness...
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But copper and Silver also surged...
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But But But... the clever chap on CNBC yesterday said "this proves investors confidence in the market is back"??
Charts: Bloomberg