McCain Mania Sends Dow Soaring To Record Highs As Yield Curve Collapse Continues

The longest short-squeeze streak in history continues...

 

John McCain's "Yes" at 1051ET seems to have been the catalyst that extended overnight gains into melt-up mania... (Small Cap smanaged to scramble back green on the day as Trannies rose 2%)

 

But the Nasdaq remains red on the week...

 

Futures show the crazy moves best...

 

The market is convincing itself that tax reform is going to happen as high-tax stocks soar relative to low-tax...

 

And bookies' odds are soaring to 80%...

 

The short-squeeze continues for a record 10th day in a row (the biggest percentage squeeze since the election)

Financials and Retailers are ripping higher...

 

But even Bloomberg notes that this looks a lot like a short squeeze...“There’s a short squeeze here,” said Eric Balchunas, ETF analyst at Bloomberg Intelligence. “XRT is being lent by people who borrowed it, so the release valve when that happens is they have to create new shares.”

 

But while everyone was excited about The Dow, Tech stocks barely managed a blip in context to yesterday's turmoil...

 

On the month, FANG and SOX were lower...

 

On the month, Trannies were best - roaring higher in the last week...

 

The Momo vs Value chaos this week seems to have normalized the month's moves...

 

Here's the month in bonds/stocks... equities rally, bonds ignore it, then stocks plunge back to reality and they both squeeze higher...

 

HYG (high yield bonds) fell for the 2nd straight month - the biggest drop since October 2016 and remain below the 200DMA...

 

While bonds were all sold on the day, the short-end underperformed...

 

Once again flattening the yield curve in the face of the equity market melt up...5s30s -3bps!

 

On the month, yields are very mixed with the short-end higher and long-end lower...

 

In fact the 2s30s yield curve collapse in November is the biggest flattening since Sept 2011

 

While on the topic of rates, very few mainstream media types have commented on the massive spike in EONIA the last two days!!

European money markets were shaken by an unexpected jump in the Eonia benchmark rate for the second time Thursday, that left the overnight interbank rate 12.1 basis points higher and traders looking for answers. The move spurred heavy selling across front-end euribors. Bund and Treasury futures were also weighed, extending earlier losses. Traders had few explanations for the sudden move, the scale of which would normally be justified by a shift in the European Central Bank’s benchmark rate. One potential reason is month-end related flows, such as an account locking in funding for the turn of the month a day early, a trader in New York said. Thursday’s fix was higher by 6bps at -0.241%, highest since March 9 2016 and comes after Wednesday’s 6.1bp move higher; the European Money Markets Institute (EMMI), which publishes Eonia, said that Wednesday’s fixing data was correct.

 

The Dollar Index ended November lower - the first drop since July...

 

On the month, gold managed to cling to green as Crude led the gains with copper and silver lower...

 

Gold tumbled once again but managed to scramble and close abovee its 200DMA (blue dotted line)...

 

Finally, we note that Bitcoin was up 49% in November (slightly less than the 52% gain in October)...

 

Bonus Chart: Your Fun-durr-mental driven equity markets...

Comments

Keltner Channel Surf Thu, 11/30/2017 - 16:05 Permalink

Sounds of Silence          by Simon & Garfunkel Hello Buy Stop, my old friendI need to talk with you againBecause the market’s softly creepingGoosed by HFTs while I was sleepingAnd the derision that was planted in my brain, further enflamesLeaving only thoughts of violenceThrough restless nights I watch my phone            Little charts in monochrome'Neath the glare of my flashlight appI raised my fist against this endless ramp     When my eyes were stabbed      By a wick-less candle’s light, piercing new highs Heralding the throes of crisisI, with my naked short, forswore   Ten thousand dollars, maybe moreI walked the streets for hours without speakingPolice inquiries -- I wasn’t listening    In a “Cramer Sucks” t-shirt I seldom wear No one daredDisturb this trudge of silence“Fools” said I, “you do not knowHow algos like a cancer growRead Lewis that he might teach youFollow Nanex that he might reach you”But my words like lead feathers fellAnd echoed with the wail of sirensThe big firms then reared back and neighed            Stud hexadecimal horse they’d made   And the VIX flashed out its warningAn epic slam was still formingThe signs said, 'The last of your profitsAre flushing down the restroom stalls Toward Goldman’s trawls’  And my forehead blistered in silence

Keltner Channel Surf Peak Finance Thu, 11/30/2017 - 16:49 Permalink

My thoughts of violence are for whoever is stifling my beloved Russell.  Check out today’s 30-min spiky chart, essentially flat from the open thru 3:00 if you remove the sudden multi-directional pin-bars, and ending at Unch, virtually untradeable.  In its heyday RUT would produce big, phallic candles resembling the Washington monument on big move days, but the last two have seen QQQs, SPY and even the damn DOW with finer holiday candles.Can only assume it’s from an odd combo of a) sovereign funds like the Swiss; b) hedgies massaging year-end results; c) minute-by-minute tax plan rumors that have a greater impact on small companies.    In any event, it may be time for Russell mavens to port their methods over to SPY or QQQs, rather than remain mired in post-open quicksand.  What a shame, the Russell ninja days could be gone forever (gasp!).

In reply to by Peak Finance

Kaiser Sousa Thu, 11/30/2017 - 16:14 Permalink

well there u have it…new “all time record highs" on all the Fraud Indexes accompanied by yet again the “breath of fresh air” as some moron refereed to Khazar Sachs new errand boy, bragging about how he’s the reason the Dow Jones Propaganda Index was up 380 points today on ABSOLUTELY NO POSITIVE MACRO-ECONOMIC NEWS OR DATA WHATSOFUCKINGEVER, and no concrete tax policy…......................../´./)....................,/¯../.................../..../............./´¯/'...'/´¯¯`¸........../'/.../..../....../¨¯\........('(...´...´.... ¯~/'...').........\.................'...../...........\.............. _.·´............\..............(..............\.............\...............\..............\................\..............\ .................\...............\DEATH TO THE MONEYCHANGERS.

Dukes adolphz Thu, 11/30/2017 - 16:33 Permalink

Fuck, dude.  Gotta give you credit for one of the lamest shill operations I've personally ever seen.Pushing this shitwave stuff, taking a self deprecating approach all while attempting to pump it with multiple users?You've got a future somewhere for sure.  Not here, though.  Some other shyster business will be your calling.  Try pay day loans or used cars when this dies out.  

In reply to by adolphz

Keltner Channel Surf adolphz Thu, 11/30/2017 - 16:53 Permalink

Mr./Ms. ShepWave:There are no circumstances in which a highly successful strategy can produce greater profits through being sold than simply traded by its creators.  Even if out of the kindness of their hearts, the quickly spreading word-of-mouth from ‘stellar profits’ you profess would lead, given calls are made the night before, to front-running that would essentially arbitrage away any benefits.  That, plus the zero likelihood any legitimate soothsayer would need to troll message boards where approximately 12 traders visit, spamming with multiple-account dorks using English as a fifth language, makes it all perfectly comical!As McCain might say:  “My friend, you have a rather odd sense of humor.”

In reply to by adolphz

AlphaSeraph Thu, 11/30/2017 - 16:46 Permalink

I may not be Shepwave but I did say that McCain is publicly indicating yes because he knows the NO's will win out and is saving face with the Republican base. When the NO vote comes through does this rally reverse?

Wigglesworth Thu, 11/30/2017 - 18:30 Permalink

UNH up 2.72% significantly outperforming the market rally.  RINOs made a deal with Trump.  They will vote yes on tax reform if they get an Obamacare bailout in the budget(Murray-Alexander Obamacare stabilization bill).  We are F'd.