Stocks Give Up All Friday’s “Jobs Data Is Great” Gains, Bonds & Bullion Bid

Stocks were modestly weak overnight amid poor Japanese, Chinese, and European data, but as soon as the US cash markets opened, stocks surged higher algorithmically testing up to unchanged briefly for the S&P 500 and squeezing small-cap shorts (as usual).. until Europe closed. Stock started to lose steam but once Nasdaq and Russell broke red, programs slammed stocks lower and despite a late-day bounce, stocks gave up all the gains from Friday's "awesome jobs data" and then some with Trannies and Small Caps worst. Momo names all suffered – most notably TWTR & TSLA. VIX broke above 14.5 briefly, closing up 2.4 at 14.2. Treasury yields plunged 5-7bps at the long-end (1-2bps at the short-end) flattening significantly. Credit markets were clubbed – with HYG taking the brunt and ending at Bullard lows. Gold and silver gained solidly (as USD slipped 0.3% led by JPY strength) as copper fell 0.5% and oil price crashed again. Markets turmoiled notably into the oil pit close (margin calls) and stabilized modestly after… but the S&P 500 still closed below its 5DMA.

As we noted earlier, today signaled the 4th Hindenburg Omen in 5 days – quite a cluster…

Stocks were led by USDJPY apart from the US open to EU close period…

From Friday's payrolls print, all the major indices are notably red – led by Trannies (but but but low oil prices) and Small Caps (but but but growth)

On the day it's clear the ramp/squeeze early on getting the S&P briefly green and squeezing small caps shorts, then EU close, then dump, JPY-driven bounce…

VIX rose significantly today…

Credit markets were hit hard today – both cash and protection markets – and stocks caught down… Investment Grade credit rose a notable 2-3bps also.