NASDAQ

Whether it is in sympathy with the now relentless surge in the Shanghai Composite which tacked on another 2.44% overnight to close at a fresh multi-year high just shy of 4400, well more than double from a year ago, or because Mrs Watanabe was unable to read the latest Japan trade data whose first trade surplus in 3 years hinted that there will be no new easing by the BOJ any time soon, but overnight the Nikkei closed above 20,000 for the first time in 15 years, with "makers of chocolate, mayonnaise, potato chips and household appliances" helping lift the Tokyo market according to the WSJ. The now daily Asian euphoria however did not last long in the European session, and after opening higher, the Stoxx Europe 600 slipped into negative territory just an hour into trading, and was down 0.4% by midmorning, lead by a near 1% decline on Athens' mains stock index, which has since recouped losses stemming from the overnight report that the ECB is considering an up to 50% haircut on Greek bank collateral, a move that would wipe out the Greek financial sector with ease.

But bad news is good news, right?

 Oil prices should become 'lower for longer", but the wild card would be the OPEC meeting this June... 

The slowly accelerating melt-up in stocks (amid earnings meeting massively lowered expectations, China's economy slumping, and US macro data hitting new multi-year lows) is aided and abetted by a collapse in VIX. Dow is above 18,000; S&P above 2,100, and Nasdaq above 5,000 - so everything is awesome. Trading volume remains well below a trending-lower average...

The panic buying by China’s newly-minted, day trader hordes took a breather on Tuesday which we think presents as good an opportunity as any to assess what factors might intervene to derail the self-feeding margin madness that has Shanghai and Hong Kong partying like it’s 1999 on the Nasdaq.

Who could have seen that coming? With Treasury yields pressing lows of the day since the US open, and AAPL in the red; the stop-hunt in stocks this morning is now starting to fade back into reality as Crude oil prices gave up gains and went red and reports appear that Greece is preparing to default... The Dow and S&P are now red on the day.

A gap open in AAPL has sparked a vertical stop-hunt in US equity indices driving Nasdaq back above 5,000 for the first time in3 weeks. Algo buying-panics are being seen across all US equity indices as the US equity open is clearly a fundamentally bullish thing...

As Nanex's Eric Hunsader pointed out, while the well-paid HFT-lobbyists proclaim their rigging clients "knit together liquidity from all markets," it appears BATS' new CEO (since the lying old one left) disagrees. The exchange that caters significantly to the front-running HFTs believes it knows how to improve the market for thinly traded stocks... it will stop handling them.

Beijing has reportedly threatened to shut down Sina Weibo which China’s internet czar claims is disseminating false information, providing a platform for terrorists, questioning the “facts,” not exercising enough censorship, and, much like the townsfolk of colonial era Salem, “propagating heresy”.

A look ahead into next week's macro forces.