Equity volumes were abysmal today… (NYSE lowest in 2014) which means only one thing… a VIX-driven levitation. Bonds sold off at the long-end (30Y +4bps) but the short-end remained bid (5Y -1bp) but did get 5s30s back to 5 week steeps. USDJPY bounced off its 200DMA (~101.25) but did not really support stocks higher. Credit markets did not buy the exuberance in stocks either. What today's ramp appears to have been was a gap-fill for VIX from Friday's dislocation on a day with no macro data to upset the algo stop-run procession. Gold and silver (along with all commodities) overnight but once the US day session opened, the selling began and PMs closed unch. The USD ended down 0.1% led by modest EUR strength (despite ECB jawboning) and AUD weakness (rumors of downgrades). "Most shorted" stocks rallied almost 3% from Friday's lows (when S&P bounced off its 50DMA) as once again a squeeze manufactures broad index pick-ups.
No Volume…
Take a look at the lower pane and see if you guess (given that is relative volume) which is the up-day in stocks and which is the down day…
Squeeeeeeze…..
and high-beta led the way – durr –
Which lifted the S&P 500 into the green for May…
VIX played fill-the-gap from Friday and lifted stocks with it…
But credit was not playing along at all
USDJPY wasn't buying it… (or its beta to stocks was cranked up 11 on Spinal Tap's amplifier)
The S&P 500 cash caight this bid off the 50DMA once again… but it is not well supported (by volume, credit, bonds, or JPY)…
Bonds sold off today after early strength – as Europe closed, bonds started to sell off…
Gold and silver pumped into the US open and then dumped to unch…
FX markets were quiet aside from AUD as chatter about S&P downgrade comments sparked some weakness…
Charts: Bloomberg
Bonus Chart: Treasury Futures shorts have been unwound in general…
Bonus Bonus Chart: Wondering why credit markets are starting to get nervous…
Bonus Bonus Bonus Chart: Peak Complacency according to SocGen's Andrew Lapthorne…
via Zero Hedge http://ift.tt/1lGBltm Tyler Durden