Trannies Soar Most Since 2001, Treasury Yields Tumble, Dollar Dumped

After a brief pause, everything is awesome again...


Trannies exploded higher today (2nd best day since Trump election)... S&P record high, Dow above 25,500 for first time... and on and on...


Despite equity market exuberance, VIX rose on the day, testing back above 10...

Today was among the biggest short squeezes in recent years...


YTD, Trannies are up 6.5% (up 8 days in a row - no down days in 2018 yet)... and Nasdaq is still soaring too...

This is the best start to a year for Trannies since 2001.


The gains in Trannies were driven by upgrades across the board for airlines...this is the biggest 2-day gain since July 2016, busting out to new record highs...


Credit markets collapsed to their lowest risk since Feb 2007...

Which is fascinating as debt soars...

Treasury yields tumbled on the day as China denials and a super strong 30Y auction put rest to any 'end of bond bull is imminent' arguments for the day...


Yields do remain higher on the week though...

But saw another notable flattening in the yield curve...




The dollar plunged again (biggest drop since Jan 2) to the lowest close snce 9/22/17...

Most notably volatility is picking up in FX land - Something is happening in China...

As Bloomberg notes, offshore yuan strengthened past 6.50 level, on track to erase week’s loss as the U.S. dollar weakened on weaker-than-expected economic data and stronger oil prices. CNH traders downplay impact from removal of counter-cyclical factor in fixing; offshore yuan now at strongest in three weeks on a closing basis.


Gold inched higher on the day as the dollar tumbled, oil gained...


And while airlines soared so energy prices also soared (makes sense), with Brent testing above $70 and WTI above $64.50... then fell back to close unchanged...

Cryptos had a noisy day after tumbling on a number of South Korea headlines with negative connotations, but Ripple ramped on news of a deal with Moneygram...


Notably the Bitcoin-Trust-to-Bitcoin-Futs arb is coming back in...


Finally, you are here...


Bonus Chart: US Macro Surprise data is starting to roll over quite notably (i.e. from an extreme high in optimism, data is disappointing). The last time we were this over-optimistic and data rolled over, the S&P fell 10%...



U4 eee aaa lester1 Thu, 01/11/2018 - 17:21 Permalink

It's not dying but it has a serious fee problem. Most small transaction merchants are already migrating to low fee coins. BTC needs to fix their fee problem fast.

I think it will still be a haven for big money transactions but they need to sort their problems. An easy on-ramp to the crypto world and convertibility to other coins is all they have going for them right now

In reply to by lester1

38BWD22 JRobby Thu, 01/11/2018 - 16:17 Permalink


Maybe I am just extra-paranoid, but I dumped some positions in IVV, IEFA and IWM (three ETFs I own).  The S&P 500, for example, is up YUGE over the past two years by historical standards.

At some point stocks are going to get really hit hard.  When?  I don't know.  But "..., Sell High", and we are at an all time high.


EDIT:  Sell high?  Yep, have a look:

In reply to by JRobby

davatankool Thu, 01/11/2018 - 16:02 Permalink

who says there is no fear in the street, there is massive fear of missing out the train in the street!! they fear that tomorrow there will be no shares to buy anymore.

c2nnib2l Thu, 01/11/2018 - 16:04 Permalink

Ripple got some bright future ahead.. 


Western Union confirmed they are beta testing it for the last year and will most likely announce it full use shortly. 


plus Ripple is legal and transparent 


while bitcoin well.... it's not looking good from this Korea perspective 

Keltner Channel Surf Thu, 01/11/2018 - 16:04 Permalink

TONIGHT’S THE NIGHT (Gonna See New Highs)   courtesy of Rod Stewart

Stay away from the bedroom
Stay away from your ‘Shades of Grey’
Re-connect the T1 line
Make some coffee, re-cork that wine

Slip on your shoes, and please don’t frown
Cover up that pretty French gown
Fire up TradeStation, here’s the link
Ooh, Babe!  Not now – I need to think, cause

Tonight's the night
We take stocks to new highs
While the shorts all sleep
Ain't nobody gonna stop us now

Please click the mouse, and not my thigh
Can’t you control your base desires?
You’d be a fool to miss this spike
Lift your hedge and I’ll come in with size, cause

Tonight's the night
We’re gonna see new highs
While the shorts make love
Ain't nobody gonna stop us now

Don't make a move, my frisky child
Let’s just let our profits ride
An ‘all-time high’ is about to unfold
Good god - your toes are cold!

Tonight's the night …

Traderone Keltner Channel Surf Thu, 01/11/2018 - 16:13 Permalink

Shucks, you mentioned me in your lyrics :). ''Re-connect the T1 line'' You're too kind. Enjoyed your input last night regarding your observations of the market. If one adds in contextual levels such as Globex high low etc and mixes those with 'time' periods as you say then one has a recipe for success. Add in a bit of effort and hardwork and away we go. 

In reply to by Keltner Channel Surf

Keltner Channel Surf Traderone Thu, 01/11/2018 - 16:20 Permalink

While I battle with my Spectrum cable modem (which, truth be told, is far better than ATT DSL when I trade at a relative's house), you've got a T1 (actually, I assumed you'd need a DS3, along with our friend Blue).

However, it's now clear we've been fools battling markets daily instead of following our friend 'Overleveraged' (see below), who is my new hero.

In reply to by Traderone

Keltner Channel Surf BlueHorseShoeLovesDT Thu, 01/11/2018 - 16:26 Permalink

I still use FreeStockCharts as my main decision point (given Interactive Brokers still can't seem to get simple things like a nice orange VWAP line correct), so I'm doin' it purely with BATS info, and without even Level II quotes (which I refuse to pay for, and are useless).  My 'setup' involves a standard $600 Dell, two 20" monitors and a refurbished Dell Lattitude $160 laptop.

It's a point of pride that I trade with frugal technology, as I'm convinced it's brainpower, not firepower, that matters for small home traders.

In reply to by BlueHorseShoeLovesDT

Keltner Channel Surf mkkby Thu, 01/11/2018 - 21:17 Permalink

Nice to hear from you again on this woe-begotten thread.

The good thing for humans is that, in order to not make things too obvious on the 30-sec charts re: volume, Mr. Algo & Friends take just a bit of time in building their reversal entries, allowing mere mortals, with the years of work our friend 'T1' mentions, to tag along for the ride.  For me 15/60 used to be the route, but recently I believe the 30m, quite out of favor just a few years ago, has become de rigeuer and the de facto standard, with the 15m more often used for continuation/confirmation signals, and the 5-minute the new fall-back for tight-range, low-volume days.  For what I do the hourly seems to get ignored on 85% of key moves, a shocking fall from grace.

People make fun of the "Free" aspect of FreeStockCharts, but I actually believe Worden has the most accurate and usable charting system for visual mean-reverting manual click-traders (rare dinosaurs that we've become), and if you trade anything that does more than 3 million shares a day or more, the BATS candles don't look any different from consolidated, so why pay, unless you're a sub-second computer trader?


In reply to by mkkby

mkkby Keltner Channel Surf Fri, 01/12/2018 - 17:10 Permalink

Agreed.  I'm still not trading.  Stopped years ago because of the boredom and stress of sitting at a computer all day.  But if I did, I'd probably just use the same tools you describe.

Back in the day (early 2000s) I used a simple tradestation algo that I wrote.  It was based on mean reversion from keltner envelope extremes.  I wasn't a good enough programmer to include long/short filters based on market conditions.  Even without such features, it had a 75% success rate for 2-3 small scalps per day.  I don't trust dumb computers with my money.  Brains can do pattern recognition much much better.

In reply to by Keltner Channel Surf

wmbz Thu, 01/11/2018 - 16:07 Permalink

Okay! This is much more like the new normal is supposed to be, 200+day.

That bullshit 100pt. rise yesterday had me a little bit worried. You can't have a brave new world with shit like that.


Overleveraged_… Thu, 01/11/2018 - 16:11 Permalink

Folks I've got to say, life has never been Better. Ever since I put all my money and savings into 3x Long Leveraged S&P 500, I have made over $120,000 since beginning of last year. I have QUIT my full time job, and now I am living off gains. The fact is, central banks will never stop printing money. There is too much at stake, and the Central Banks Job Assigners will not put up with any dip in the markets. We have a MUCH better change of seeing S&P 500 at 10,000 then we do 1000 again. The game has changed. We are now in the new paradigm of finance, and those who get on the Train will get Rewarded.

My life used to be awful. I had to wake up and go to work every day. Take shit from my bosses and co workers. Take shit from clients. Ever single day. Now I can do whatever I want. I can eat breakfast when I want and go to the gym whenever I want. It's the best lifestyle I have ever had.

I predict the S&P 500 will finish the year at 3000, and likely be at 4500 by Jan 1 2020. There is simply not going to be a crash. It's no longer possible. It's not too late folks. Go all in now and never look back.