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...

Comments

Hammer823 Mon, 02/12/2018 - 16:04 Permalink

Another rebound rally in the books.  I don’t know why people get upset when I remind them to buy the dip.  Do people not like to make money on a financial website?  Buy the indexes when they fall around noon.  Sell the position in the afternoon, when overseas traders or institutions bid it back up.  Maybe you have to wait a day for the inevitable rebound rally. It’s that simple.  Japan owns 75% of Japanese ETF’s.  China is openly rigging their markets from dropping.  The US is doing it too; on top of the out in open rigging of QE, ZIRP, buybacks etc.  Contributing to the ongoing Zero Hedge discussion is great.  But why not make money at the same time?  Our market is fixed to make it easy on you.

whatswhat1@yahoo.com Hammer823 Mon, 02/12/2018 - 16:05 Permalink

What indexes do you suggest looking at???

 

I use to do that 18 years ago.  I had 43 wins in a row.  My 44th trade wiped out all of the previous wins.  The 44th trade was an anomaly.  Massive volume crashed data feeds and the phone lines.  I didn't find out what my long/flat status was during the weekend and the following two days.  To make matters worse, my long position was mistakenly entered as a short in the IRA account. My mistake was I only looked at my long account positions, and, they were flat.  I didn't look at my cash for a week.  The SEC didn't even respond to my complaint.  Tuition at Wall St. U can be a bitch.

 

 

 

Too many teardrops for one heart to be crying
Too many teardrops for one heart to carry on

You're way on top now since you left me
You're always laughing way down at me
But watch out now, I'm gonna get there
We'll be together for just a little while
And then I'm gonna put you way down here
And you'll start crying ninety-six tears
Cry, cry

And when the sun comes up, I'll be on top
You'll be right down there, looking up
And I might wave, come up here
But I don't see you waving now
I'm way down here, wondering how
I'm gonna get you but I know now
I'll just cry, cry, I'll just cry

Too many teardrops for one heart to be crying
Too many teardrops for one heart to carry on

You're gonna cry ninety-six tears
You're gonna cry ninety-six tears
You're gonna…

In reply to by Hammer823

Peak Finance whatswhat1@yahoo.com Mon, 02/12/2018 - 18:05 Permalink

This:

I use to do that 18 years ago.  I had 43 wins in a row.  My 44th trade wiped out all of the previous wins. 

Umm, how is this even possible, unless you were doubling down  / rolling forward the winnings on each trade? This is nuts and no offense you deserved to lose your shirt. There are 100's of sites that talk about trading, training plans, position sizes, proper allocations, diversification, and hedges. Really you belong in a casino, not a trading floor.  

In reply to by whatswhat1@yahoo.com

Traderone Squid Viscous Mon, 02/12/2018 - 17:00 Permalink

Do I ever short? Yes but I really pick my poison on those and never hold shorts overnight.  If the first hour low  gives way then that shows shorts are in control so I short a retrace to VWAP. It worked so well last weeks, have a look at the ES chart. If a market opens weak and we can't retake the open print then short it at the market. 2 examples for you Squish but I will gladly give more anon. 

In reply to by Squid Viscous

Keltner Channel Surf Mon, 02/12/2018 - 16:05 Permalink

Despite the bounce, many bulls remain less than confident …

“Just Like Yellen"        from  “Just Like Heaven”        by The Cure

"Show me, show me, show me how you do that trick,
the one that made stocks green," she said
"The one that brings them back," she said,
and threw her arms around my neck
"Show me how you do it, and I promise you,
I promise that I'll run away with you, I’ll run the stops with you"

I caught the falling knife’s sharp edge, but could lose face, thanks to the Fed
I dreamed of all the tools they have to make her markets glow
"Why are highs so far away?" she said
"Don’t you realize that I'm in love with you, that I'm in love with you?"

You, soft and lovely; Me, lost and lonely ;  Like the film ‘Bay of Angels’
Gambling with our true emotions, twisting with the markets
Must make it green, just make it green

FOMC’s taking shape – but Fischer’s been retired for days!
I buy the dips, and breathe her name, then open up my eyes
I found myself alone, alone and raging that there’s no QE
That scares the only girl I love, and strikes fear deep inside of me

You, soft and lovely ;  Me, lost and lonely
Hoping Powell’s
Just like Yellen

romario Mon, 02/12/2018 - 16:07 Permalink

why the ugly duck Brazil and South American countries so hot these days? Dow is gonna give back gains of 10 years but the street ain't selling EM? Where are the Real and Peso bears that populated these venues 2 years ago? High beta might explain, or some weird political insider info... I'm just a 3rd world nobody holding some unprofitable shorts like the Vix guy. He did profit though.

wmbz Mon, 02/12/2018 - 16:15 Permalink

 It appears our beloved Stawk "market" is getting back to normal!

If we can just keep melting up 400 or 500 hundred points a day we'll be at 30,000 in no time. Ain't life grand! 

ReZn8r Mon, 02/12/2018 - 16:17 Permalink

This is the most purposely manipulated market ever. Other reports of the Retail trader group jumping large... another scheme to pull in dummy assed traders just to fleece every last bit of money from whoever is ignorant enough to jump into this shit. Do you really want to make some money in the market ? ... Keep The Fuck Out of it for awhile. Now is not the time to be in.

TheMexican Mon, 02/12/2018 - 16:23 Permalink

The manipulation is at never been seen levels.  Stock buy backs need to end.  Sell bonds to raise money. Use money to buy your own stock.