...reflexive rally to 4200-4300 in progress as expected ; a big turnaround in big techs saw Nasdaq gained 2.68% and the S&P500 to 4058 up 1.99%. Gold steady but Ethereum (ETH) in trouble - see the chart below you can see completion of Christmas tree and an imminent break of support will lead to the larger Christams tree formation down to $400 (see attached article)
Strangely while ETH moved down in tandem with all minnow cryptos, BTC held its ground at $28-29k but should $28k give way (which I believe is a matter of time), we will see a larger and potentially stronger leg down. And that pain won't augur well for stocks in general - baby boomers are running for the hills now (they don't want to return to work), while the millenials are staying the course because they have time left though they are the ones involved in cryptos.
..retail seem to be behind the quick late afternoon recoveries in the S&P 500 in the last few days.
We suspect that institutional asset managers were the cohort of investors reducing equity allocations in the morning last Friday and yesterday, while retail aggressively bought the dip towards the end of the trading session.
The large inflows from retail towards the end of the day – without additional selling pressure from institutional investors - were probably the main force behind these sharp intraday rebounds.
Retailers with eyes fixated on price movements will not learn about risk-reward- reminds me of the casino gambler who is already down 50pc on his chips at the table but will not leave until he gambles off his last chip with hope of recovering his losses.
Two more disappointing US Macro data points today (GDP and pending home sales) sent the US Macro Surprise Index to its weakest since Sept 2021... Source: Bloomberg
That bad news is apparently being seen as good news by the market as rate-hike expectations slipped further Source: Bloomberg
Which brings us to the equity 'market' today. After dropping 1% after yesterday's close on the back of NVDA's earnings, Nasdaq futures drifted sideways to slightly higher all the way into the cash open (apart from a modest dip after GDP), then went full-retard bid-fest. Nasdaaq went from -1% to +3.25% at its highs before some late-day selling/profit-taking wiped some of the lipstick off this pig. The Dow was the day's laggard, "only" managing a 1.5% rally...
The S&P managed to scramble back above 4,000...
Just look at NVDA! Down over 10% after hours after missing the bottom-line and cutting guidance... only to end the day up 6%
A massive reversal in value (lower) relative to growth (higher) in the last two days has erased all the relative performance on the week Source: Bloomberg
For some context with this rip, "Most Shorted" stocks are up 12% off Tuesday's lows, seemingly stalling at key resistance for now... Source: Bloomberg
Following yesterday's relatively huge rally in HYG (HY Corporate credit), today saw more follow through... Source: Bloomberg
Stocks and bonds have completely decoupled since the Minutes... Source: Bloomberg
Treasury yields were mixed and marginal today with everything out to 10Y unchanged and 30Y yield sup only 1-2bps. On the week, 30Y is unch while 2Y is down 9bps... Source: Bloomberg
The dollar reversed yesterday's dead cat bounce gains... Source: Bloomberg
Bitcoin dumped and pumped to end the day practically unchanged... Source: Bloomberg
Oil prices soared higher today with WTI coming within a tick of $115...
Gold managed gains also, holding above $1850...
Finally, in case you're wondering about these insane swings in the 'most traded' stock markets in the world, look no further than thew total evisceration of market liquidity...
Financial 'stability' turns to fragility as repositioning books of any size has become impossible.
