The Russell 2000 had its best day in over 17 months today – up 2.5% (best since Jan 2nd 2013) and +4% from Friday's lows. All US equity markets exploded higher our of the gate thanks to a ridiculous spike lower in VIX (below 12) and USDJPY stop-run back through 102 which squeezed "most shorted" dramatically higher. The Dow, Trannies, and S&P all made new record high closes…and it's not even Tuesday yet! Away from stocks, silver jumped over 2% for almost its best day in 3 months. Gold rebounded over $25 from overnight smackdown lows. Oil broke back above $100. Treasury yields rose modestly (2-3bps) – majorly out of sync with equity exuberance. JPY was large and in charge of stocks but the USD ended the day unchanged. S&P futures volume was 30% below recent average.
A major short-squeeze…
lifted all the major US equity indices into the green for May… (and the Nasdaq green for 2014)
The Russell is up 4% from Friday's lows – destroying the meme that this is a healthy rotation from high-valuation names to low… this is just another squeeze
Homebuilders were the best performers… sure they were… makes perfect fucking sense as rates rise…
From the early March highs in the Nasdaq and Russell…
Volume was dreadful…
USDJPY was in charge all day…
Does this VIX behavior look normal to you?
FX markets were volatile during the European session but ended the NY session unahcnged from Friday… (with JPY weakest)
Copper and Silver surged, oil and gold rose…
and this came after the overnight smashdown in PMs…
Treasuries sold off very modestly – not exactly the heart-pounding wreck that huge risk on belief in stocks woul dhave one believe…
And tomorrow's Tuesday!!!! Fuck yeah! Just 3 more points for Goldman Sachs 2014 year-end target (8 months early!)
Charts: Bloomberg
via Zero Hedge http://ift.tt/1jb37Rr Tyler Durden