Stocks Soar On Biggest Weekly Short-Squeeze Since Election, Bonds Bloodbath

After Schocktober, November's chaos likely left a lot of traders thinking this...

Chinese stocks saw an orgy of sudden mysterious buying pressure after Monday's dip... (heaviest volume week since February)

 

European stocks were  higher but considerably less linearly manipulated...Everyday saw a solid open sold off...

 

US Stocks are back in the green for the year thanks to this mega squeeze...

US Markets were utter chaos on the week with plunge protection bids and short-squeezes everywhere... Small Caps and Trannies outperformed...

 

Today was all about Apple and China Trade - An initial tumble after hours (Apple) was quickly erased on Bloomberg headlines about progress in US-China trade talks. This lasted until 3 White House officials (off the record) and Larry Kudlow (on the record) confirmed no such deal progress existed, sending stocks slamming lower. Then in the last hour of the day Trump told reporters progress was being made and stocks recovered...

 

What really helped the week overall was a massive short-squeeze (an 8% surge) - the biggest since Nov 2016 (US Election)...

 

Dow made it back above it 200DMA (but failed with its 100DMA) but S&P, Nasdaq, and Small Caps all remain below the 200DMA still..

 

NOTE where The Dow stalled today - almost to the tick of the 50% retrace of October's big plunge...

 

Obviously Apple was making all the headlines, tumbling back below a trillion dollar market cap...

 

FANG stocks rallied, breaking a four-week losing streak, but it was anything but convincing...

 

Despite VIX compression this week, the term structure remains inverted...this is the 20th day in a row...

 

As stocks tumbled during the day, bonds were also sold as it seems quant derisking remains

 

Treasury yields blew wider all week, accelerating as November started...

 

30Y took out 2018 yield highs - pushing to 3.46% - the highest since July 2014...

 

The Dollar ended the week almost unchanged after yesterday's tumble and today's chaotic swings...

 

But the big story was the surge in offshore yuan (and give back today)...

For some context, that 2-day spike erases a month of weakness - but we have seen this kind of manipulated squeeze a few times...

 

Cryptos ended the week practically unchanged (aside from Bitcoin Cash)...

 

Copper ripped on the China headlines, crude dumped as Iran squeeze fears abated...

 

Mirroring the dollar, Gold ended the week almost unchanged in a big V-shaped recovery

 

It seems the new Yuan peg is at 8500 per oz of gold...

 

WTI Crude crashed this week to its lowest in 7 months with a $62 handle...

 

Finally, just in case you thought October was the 'pause that refreshes' and encourages investors to buy the dip for another leg higher to infinity and beyond... they are already 'all in'...

Which is not a good sign as Bloomberg reports that Ned Davis Research just went bearish on global stocks for the first time since 2009... Investors should sell stocks and buy bonds because the equity decline is only halfway done, according to Tim Hayes, the firm’s chief global investment strategist.

“In making this move on market strength, we are recognizing that the global market downtrend has not led to the levels of panic and capitulation needed to start a bottoming process,” Hayes wrote in a note late Thursday.

“We have yet to see a waterfall decline with extremely high downside volume and volatility.”

Four out of the 10 components in the firm’s model have turned bearish. If another one goes sour, Hayes said he’ll downgrade stock allocation further.

Soft survey data started to catch down to reality this week...

Tighter financial conditions still point to a considerably lower stock market...

No matter what - something changed!!