Max pain market

Oil extreme

Whatever oil does it does extreme as of lately. The squeeze washed out a lot of people on the way up. The move lower has shaken out a lot of new oil bulls. Note we are hitting the lower part of the trend channel and the 50 day moving average. Oil is down some $10 in no time. Impressive...

Source: Refinitiv

They must sell oil

Gentle reminder, CTAs have loaded up on oil. They trade momentum and have been forced to sell oil aggressively. The big down scenario is looking painful (chart 2).

Source: DB

Source: GS

Could rates do an oil?

Nothing is impossible in this market. CTAs produced the best month ever in terms of P/L in September. They have traded all trends aggressively. It seems reversals in trends are traded (and magnified) by CTAs very quickly. Is oil trying to tell us something about a possible short term move in rates?

Source: Refinitiv

The computer puke has been massive

This has impacted price big time...especially as liquidity has been extremely poor. Add to it big short gamma, and you understand why we have moved the way we have moved.

Source: GS

Accident waiting to happen?

DB's Jim Reid: "The Q3 sell-off in rates could push banks' unrealized losses back to their highs..."

Source: DB

There is a slight problem

US yields are no longer below nominal GDP growth...and that is not a great place to be in.

Source: Gavekal

SPY/TLT correlation

Pretty much at historic highs...

Source: UBS

SPX's rate volatility obsession

Regular readers of TME are familiar with this chart. SPX cares about bond volatility. SPX vs MOVE inverted.

Source: Refinitiv

Credit protection stress

CDX IG and iTraxx main have moved sharply higher.

Source: Refinitiv

Little tech brother crashing

South Korea's NASDAQ, the KOSDAQ, has basically crashed over past sessions. There is a crossover logic vs the NASDAQ worth considering...

Source: Refinitiv

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