Markets 'Not' In Turmoil: Dow Jumps Over 400 Points Amid Record Low Liquidity

If you chose "Tradable Bottom" as you CNBC-Bingo word-of-the-day... You Won!!

Having been up almost 400 points from its Friday cash close, Dow futures plunged back into the red,perhaps accelerated by Ray Dalio's dismal diatribe, amid chaotic swings and the lowest market liquidity ever seen. But that did not last as the machines dragged stocks back up - The Dow up over 500 points to a 50% retrace of its Volocaust losses... before running out of steam...

As Nanex's Eric Scott Hunsader notes, the last week has seen liquidity levels for S&P futures - the most liquid equity security in the world - collapse to record lows, far worse than during the peak of the crisis in 08...

 

The initial gap open was sold, then panic-bid after going red but an ugly MoC picture sparked some selling late on...

 

Futures show the overnight pump and dump...

 

The S&P 500 broke back above its 100DMA...

 

This is the biggest 2-day ramp since Brexit (June 2016) when the S&P also tested its 200DMA...

 

Notably, The Dow and S&P remain in the red YTD (Nasdaq green)...

 

VIX fell back below 25...

 

But Small Cap vol is coming back fastest...

 

While "The Fear Index" faded, the Fear-and-Greed Index remains stuck at Extreme Fear...

 

It seems 'buybacks' were back in vogue as AAPL soared almost 5%!! the most since Feb 2017... In fact the mega tech firms are up 6 to 9% off the Friday lows...

HY Bond spreads tightened further but remain well elevated from pre-crisis levels...

As stocks sink, bond yields and the dollar are notably lower...

Bonds & Stocks were bid today - 2nd best day for aggregate since March 2017...

The question is - has the old bond-stock correlation regime returned?

Which suggests those who are betting on CPI printing light this week and expecting bonds to rally and stocks to rally in relief, may be disappointed.

Treasuries were mixed today with the long-end lower in yield (30Y -1.5bps) and rest of the curve very modestly higher in yield...

 

Despite the exuberance in stocks, the yield curve managed a barely positive steepening...

 

Commodities all managed gains, led by a surge in copper, amid dollar weakness...

 

While WTI was up, it tumbled back below the $60 level and RBOB kept sliding...

 

Cryptos extended gains off the JPMorgan Bitcoin Bible from Friday's close...

 

Finally, on the heels of Ray Dalio's warnings about the rising possibility of recession in the short-term, NYFed's Recession Indicator is also on the march...

Which seemed appropriate to note with this...

Bonus Chart: Probably nothing...