The Melt-Up Is Back As VIX Is Crushed To 11

Everything is awesome again...

The S&P 500's dip negative around 11ET (right around the European Close) was met with a wall of buying, until Europe actually closed at 1130 then stocks went sideways. until around 1400ET (after Trump's NAFTA comments), US equities were panic-bid... Even Trannies gained despite oil's weakness... The Dow (breaking above 25k) led the markets today (thanks to BA, GS, and UNH)

Since the start of June its been a buying panic every morning...

 

VIX tumbled to an 11 handle...

 

For the first time since Feb 1st, RVX/VIX (Russell 2000 VIX / S&P 500 VIX) ratio rose above 1.2 - the 85-day stretch below that level is the longest in history...

 

S&P 500 Financials actually outperformed tech today (for once), breaking back above the pre-Italy chaos levels from last week...European banks, not so much...

 

Meanwhile, Musk made some more big promises and Tesla bond and stock shorts got mauled...

 

"Most Shorted" Stocks had their faces ripped off once again in a non-stop squeeze this week...

 

Treasury yields pushed higher all day today as prospects for the end of easy money in Europe helped the record bond shorts...

 

But 10Y remains below 3.00% for now...

 

And the yield curve steepened a little more...back to Memorial Day levels...

 

Italian bonds tumbled...

 

The Dollar Index tumbled early on but once again found support...

 

At what appears to be some magical range of the last three weeks...(1168, 1170, 1169, 1168, 1169, 1168,  1171, 1173, 1177, 1170, 1171, 1172, 1171, 1172, 1170...)

 

USDJPY rallied on the day (Yen weakened), breaking above its 200DMA...

The Brazilian real tumbled at the open and at the close to a new cycle low...

 

Cryptos took a leg lower today at around 12ET - mirroring the surge that occurred at 12ET yesterday...

 

Copper soared as hopes for a G-7 trade deal were high (remind us again when the G-& has actually done anything?)...Silver also outperformed...

 

WTI Crude slumped to two-month lows as inventory data surprised with the biggest aggregate build since 2008...

 

$1300 remains a key pivot level for gold...

 

The Gold/Silver ratio tumbled today to its lowest since Feb 1st

 

And silver's relative outperformance of oil has sent the ratio notably lower...

But while The Dow hits 3-month highs, once again, the SMART money ain't buying it...

Comments

davatankool Wed, 06/06/2018 - 16:03 Permalink

ZH should do a report on the cash level for the tech companies, they are spending so much money to buy back their shares while rev/sales are flat or disappointing. just like tech bubble in 2000.

D.r. Funk Wed, 06/06/2018 - 16:03 Permalink

The Fake Final Facade Forced Formulaic Mop-up

[mop up - suck in, one last time, one side; discourage & destroy other side]

Fine w*Me
Fuck *yOu
 

DingleBarryObummer AynRandObjectivist Wed, 06/06/2018 - 16:10 Permalink

+1

and the problem is less than 1 percent of society even realize.  Once we get up to like 15% then we will really be cooking with Gas.  It is inevitable.  People are dumbed down but they still have the instinct that something is wrong.  I didn't know nothing about nothing when I was 13 but I still knew something was not quite right; that things were quite off indeed.  People feel the same way.  There's an unsettled feeling deep down in their soul.

Kushner's Father-in-Law has people believing things that deep down in their soul they know are not true, so he has them by the balls.  Really though, deep down they must know.  It's like If I drink a lot I tell myself I'll shake off the hangover, that it won't impair me the next day, but it always does, and deep down... I knew it would.

Edit: And what is great is that though the scam gets extremely complex, it is also quite simple.  A group of Un-elected elites print money from thin air and charge interest.  They claim this is necessary to have a stable economy that has access to liquidity in times of crisis, but they just end up causing crisis's, so they are full. of. SHIT.

In reply to by AynRandObjectivist

khakuda Wed, 06/06/2018 - 16:06 Permalink

The level of continuing monetary stimulus is mind boggling in light of unprecedented fiscal stimulus in the form of corporate tax cuts at a time the economy is humming and unemployment rates are hitting generational lows.

A continued melt-up and upward revaluation is EXACTLY what one would expect with that degree of incompetent policy.

khakuda AynRandObjectivist Wed, 06/06/2018 - 16:29 Permalink

I hear you, but the level of monetary and fiscal stimulus is entirely inappropriate for this time in the cycle.  People don't have money because they have been suckered into buying the $36,000 SUV and $600 smartphone because low interest rates and extended loan terms have kept the monthly payments manageable.  Their level of income may only justify a $20,000 Corolla and a higher savings rate, yet they spend what they don't have because policy has enabled it.

If history has proven anything, people will live beyond their means if you let them and/or actively encourage them.

The real crisis is not that the current economy is too weak or inflation is too weak.  The crisis is the level of debt being taken.  At the individual household level, the crisis is exactly what you say - that people are not saving for a down economy and are not saving enough for retirement in a world where defined benefit pensions are history and social security and medicare are massively underfunded.

In reply to by AynRandObjectivist

BandGap khakuda Wed, 06/06/2018 - 16:40 Permalink

I upvoted you but no one is getting "suckered" into anything. They merely don't give a shit about the debt or think they will be bailed out.

Lots of people living in homes without paying mortgages. That's the "mentality" these days. Sometimes I think the only "suckers" out here are those who pay on time, every time.

In reply to by khakuda

khakuda BandGap Wed, 06/06/2018 - 16:42 Permalink

Agreed.  To your point, the folks that were prudent and saved money have been screwed since 2008.

I will say that not all debtors are calculating and expecting a bailout.  A lot are just financially unsophisticated and believe in the tooth fairy.  They see everybody else taking on debt and living large and they figure it must be ok.

In reply to by BandGap

Tamam Shud BandGap Wed, 06/06/2018 - 17:00 Permalink

Sucker here.

I know a guy with a finance background who should know better, but he got himself in a lot of debt.  Had a good job with big bonuses and paid off credit card debt.  Good, right?  Bought an expensive house, nice car...then wife quit her job to stay home with kids...then he lost his job with big bonuses.

Even people who should be wiser with their funds make dumb mistakes.  I'm happy living comfortably yet conservatively...as a sucker.

In reply to by BandGap

Snaffew khakuda Wed, 06/06/2018 - 17:04 Permalink

95 percent of the jobs data is based on the birth/death model.  It's a complete fucking guess.  The economy is only humming because the government tells you it is.  All you have to do is look at energy usage/oil consumption and see that this is a complete bullshitter's lie.  But hey, the games go on.

In reply to by khakuda

D.r. Funk Clock Crasher Wed, 06/06/2018 - 21:11 Permalink

nope, since Nov 8'16 it's a ruse, no one is factoring that (possibility), the move in the last couple weeks, is magically just as that-losing-side-power is extremely close to getting caught, coincidence?, the last couple weeks is AT LEAST as likely a ruse as it is not, makes sense?, hopefully?, i believe you're most likely "IN JEST" but just in case )

In reply to by Clock Crasher

Traderone Wed, 06/06/2018 - 16:07 Permalink

Oh dear, there is going to be A LOT of angry folk on tonight with their 'see my finger' and 'hilarious' bullshit. They ain't happy unless the indices reflect their lives i.e. going down. 

Traderone Games Without … Wed, 06/06/2018 - 16:57 Permalink

I exclusively trade the ES intra day. I was actually short just after the open but as an  Order Flow reader I knew that 2750 was key from yesterday so covered there and then got long later.. Had a nice short yesterday too so been a good week thus far. Not many traders left around here with cranks filling the void instead so it was nice conversing with you, happy trading.

In reply to by Games Without …

Squid Viscous Traderone Wed, 06/06/2018 - 16:50 Permalink

monday morning QB tarder right on schedule...

 

let me guess, you bought the 10-11 am dip and cashed out at 3:59:59

 

did it again! you're like the Amazing Kreskin guy from Johnny Carson show

do you wear a hat like that when you magically get in and out at the perfect time?

or maybe more like the great Gazoo from the flintstones.

"you dum dums should have bought the 10:30 AM dip"

 

edit: sorry you're an "order flow" guy! lol... almost less believable than Gazoo, not sure

In reply to by Traderone

Squid Viscous Traderone Wed, 06/06/2018 - 17:20 Permalink

it was actually a pretty good game, especially last 20 minutes...

any guy on each side has a bigger sack than a whole team of your soccer heros

took my 4 yr. old son so ... priceless.

and not sure about your 2nd string math, obviously not the sides they would put out for world cup ...

but all second string? maybe you should catch a high kick and let the 6'4" 240 lb Wales outside center decide that.

or the 6'3" 230 inside centre, or maybe the 6'7" 265 South africa number 5...

see what you think ... lol...you can taunt them as they wheel you off to the hospital,

 

In reply to by Traderone