Last-Minute Panic-Bid Saves Stocks From Longest Losing Streak In 19 Months

Last-Minute Panic-Bid Saves Stocks From Longest Losing Streak In 19 Months

Thanks to late-day panic-bid, the S&P 500 avoided a sixth straight day of losses – which would have been the worst losing streak since Feb 2020 as the COVID crash was starting to accelerate…

The Dow and Small Caps outperformed while Nasdaq was the biggest loser today.

Did the buyback tsunami get unleashed this afternoon to try and save stocks?

But the actual drawdown is de minimus to say the least!

Source: Bloomberg

In fact, as Bloomberg’s Eddie van der Walt points out, in the past year, there have been 10 cumulative declines bigger than the present one, only for the index to bounce back to a record high. In October last year, the S&P 500 fell more than 7.5% over 14 sessions, only to set a new record six days later.

But, Dow Theory is flashing red this time, as Trannies tumble divergently from Industrials…

Source: Bloomberg

As RIA notes, “The general idea is that both averages, over time, should move in tandem, given that the transportation average represents companies responsible for the movement of goods across the country. For that reason, it should serve as a leading indicator.” Many question the value of the theory today due to the tremendous technological progress. However,  the fact of the matter is we still consume goods that must be shipped.

The Dow bounced off its 100DMA…

Defensives and Cyclicals both opened significantly higher only to be dumped together for the rest of the day…

Source: Bloomberg

Treasury yields were lower on the day with the long-end outperforming (30Y -3bps)…

Source: Bloomberg

10Y Yields pushed back down to post-payrolls close levels…

Source: Bloomberg

But while bond yields were lower, anxiety over the debt ceiling debacle are accelerating…

Source: Bloomberg

The dollar chopped around managing to hold modest gains today…

Source: Bloomberg

The big news in crypto-land was the ‘fake’ pres release that Walmart was partnering with Litecoin which briefly sent cryptos soaring (LTC was up almost 35% at its peak) only for those gains to evaporate as reality struck…

Source: Bloomberg

Bitcoin has had a chaotic last 24 hours after Korean crypto exchange regulatory news (and the WMT headlines) drove swings…

Source: Bloomberg

Gold managed modest gains today, briefly topping $1800 before fading back…

WTI rallied back above $70 (within a tick of $71 intraday)…

Overall, the Bloomberg Commodity Spot Index rallied a fresh 10-year high…

Source: Bloomberg

Finally, if there was ever any doubt, the market’s biggest risk is in the contraction of liquidity which stocks have been more sensitive to over the last decade rather than economic and earnings growth.

And don’t forget September’s seasonality…

Will the opex-bounce save us?

Will it be different this time?

It better be…

Tyler Durden
Mon, 09/13/2021 – 16:01

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Author: Tyler Durden

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