By the end of the day session, gold and the dollar had retraced their moves while stocks, bonds, and crypto extended their trend.
Then late on stocks took a brief dive after NYTimes dropped a headline outlining Biden’s $1.9 trillion stimulus plan…
One thing that markets may not like is that contrary to previous expectations that the “stimmy” check will be $2,000, Biden will instead propose additional $1,400 stimulus checks, “topping up the $600 checks that Congress approved in December.”
Which apparently disappointed stocks… Still, the US equity markets massively diverged with Small Caps exploding higher as Big-Tech and the Dow and S&P drifted down, accelerating late on…
Today was the biggest short-squeeze since April 2020!! … note that the most-shorted stocks have risen for 9 of the last 10 days.
Bitcoin pushed back up above $40,000 as perhaps the cleanest signal left of the inflationary impulse…
Source: Bloomberg
The dollar reversed hard and ended down…
Source: Bloomberg
And while gold ended lower it bounced hard off the spike lows overnight…
As, we suspect the world is coming to recognize that the Treasury/Fed axis is “meddling with the primary force of nature… money!!”
The Russell 2000 / Nasdaq 100 ratio soared to their highest since early March…
Small Caps are now up almost 10% YTD with Nasdaq barely above unch…
Energy stocks exploded higher once again today as Tech and Staples lagged…
Source: Bloomberg
Value was well bid as growth stocks were dumped…
Source: Bloomberg
VIX remains awkwardly high relative to stocks…
Source: Bloomberg
But with demand for calls so high (at 21 year highs relative to puts), this measure of ‘fear’ could have switched to a measure of ‘greed’ once again…
Source: Bloomberg
As we are seeing insane levels of call-buying in XLE and more idioyncratically XOM…
Source: Bloomberg
But vol of vol (VVIX) is notably decoupling…
Source: Bloomberg
Treasury yields also extended their overnight spike on the reflation theme after Jay Powell failed to calm the taper rhetoric…pushing 30Y back to unch on the week…
Source: Bloomberg
10Y yields pushed back above 1.10%…
Source: Bloomberg
USTs are at their highest to Bunds in over 10 months and at a critical technical level…
Source: Bloomberg
Oil surged back above $53…
Grains continue to soar…
Source: Bloomberg
Today’s rebound in Bitcoin combined with gold’s recent relative weakness has sent the cryptocurrency to a record 21.5x the price of the precious metal…
Source: Bloomberg
And finally as US economic data continues to serially disappoint…
Source: Bloomberg
It has never been more expensive for the ‘average joe’ to buy stocks…
Source: Bloomberg
And the last time the put-call ratio collapsed to these levels of complacency… it did not end well…
Source: Bloomberg
Tyler Durden
Thu, 01/14/2021 – 16:01
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Author: Tyler Durden
