Stocks Surge On Biggest Bear Market Short-Squeeze Since Nov 2008

They are pulling out all the stops on this one...

 

Another chaotically wild week...

  • Small Caps (Russell 2000) up 4.65% - biggest week since Oct 2014

  • S&P 500 up 3% - best week in 3 months
  • Dow Transports up 3.7% - best week since Dec 2015
  • "Most Shorted" stocks up 8.8% - biggest short squeeze since Nov 2008 (and in 3 weeks "Most Shorted" are up 19.8% - the most ever)

  • HYG (high yield bond ETF) up 2.3% - best week in 5 months (best 3 weeks since Dec 2011)
  • 2Y, 5Y, 10Y, 30Y biggest weekly surge in yields in 4 months
  • 7Y biggest weekly surge in yields in 9 months
  • Aussie Dollar soared 4.25%  - the biggest week since Dec 2011
  • Oil up 9.6% this week - 2nd biggest week since August
  • Oil up 21.2% in 2 weeks - biggest 2 weeks since Jan 2009
  • Copper up 7.2% - biggest week since Dec 2011
  • Gold up 3.5% to 13 month highs
  • Silver up 5.8% - biggest week since May 2015

 

Ahead of China's National People's Congress, Chinese stocks were 'lifted', but as is clear, the intervention was aimed at mega caps and not the tech-heavy small caps of ChiNext and Shenzhen...

 

Which lifted stocks into the payrolls print...and then the chaos began

 

After the initial weakness, stock were panic-bought only to snap at 2pmET on possible Fed limits on banks...

 

Dow tops 17000 at the close, but S&P lost 2000 right at the bell... closing at 1999.99!!

 

All about Super-Duper Tuesday...

 

Still a crazy week... with Trannies and Small Caps dramatically outperforming...

 

As Most Shorted soared again...

 

Energy & Financials outperformed... but note that when The Fed headlines hit, things stalled...

 

The reaction to payrolls was all over the place...

 

For the first time in 2 months, XIV (inverse VIX ETF) is trading below VXX (VIX ETF)...

 

Treasury yields spiked after the "better-than-expected" jobs data with the belly underperforming in the week (and 2s adn 30s outperforming - though still out 10bps)...

 

5Y yields touched the 50DMA back within their 4 year range...

 

The USD Index dropped (led by strength in EUR and cable, but Aussie Dollar was the big mover)

 

In fact Aussie Dollar was the biggest gainer of all major FX this week - up a shocking 4.25% - the most since Dec 2011, to 8 month highs...

 

Commodities were all on fire this week...But crude just melted up...

 

Gold closed at its highest in 13 months...

 

Finally, we note several risk assets at or near their 200 Day Moving Average: Credit Suisse comments on the slightly uncanny fact that so many risk assets now at their 200DMA (just highlights further the high level of correlation between asset classes).  Brazil is now +26% from its lows and sitting right on its 200d. Glencore +104% from its lows, and on its 200d. Kumba Iron Ore +225% from its lows and on its 200d. Turkish equities +14% from their lows and on the 200d. Copper is only 2% below its 230 level. S&P500 only 1% below its 200d, so perhaps more interesting are two assets that stick out as still having significant upside: OIL 200d is at $43 and finally the ESTOXX AT 3300

 

Charts: Bloomberg