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Crypto, Gold, & The Dollar Rally As Stock-Shorts Puke To 13-Year-Lows

Courtesy of ZeroHedge View original post here.

While the bond market was on holiday today, in memory of Veterans Day, we note that short-term rate-futures markets continued to adjust hawkishly, with 2.5 rate-hikes now priced-in by the end of 2022…

Source: Bloomberg

While cash Treasury trading was closed, futures implied around a 2-3bps rise in yields for 30Y…

Source: Bloomberg

And 4-5bps higher in the 10Y yield…

Source: Bloomberg

With bonds away, algos had fewer friends to play with so the machines couldn't keep the momo going as the dollar, gold, and crypto all rallied…

Stocks were mixed with The Dow red (weighed down by DIS), while Small Caps once again rebounded violently at the open and clung on. S&P ended just in the green…

Smart money-flow remains notably divergent from stocks…

Source: Bloomberg

Notably, 'stay at home' stocks have outperformed 'get out and party' stocks recently, revertiong lower again today after a brief bounce on Friday)…

Source: Bloomberg

Perhaps as highly-vaccinated, mostly-vax-passport-driven Europe faces yet another wave of COVID…

Source: Bloomberg

The dollar extended yesterday's gains (highest close since Nov 2020). This is the biggest 2-day jump in the dollar since June…

Source: Bloomberg

Cryptos bounced back from yesterday's late-day shellacking.

Bitcoin managed modest gains back above $65,000…

Source: Bloomberg

Ethereum recovered all of yesterday's losses…

Source: Bloomberg

Ethereum notably outperformed Bitcoin today (following Ken Griffin's comments)…

Source: Bloomberg

Gold continued its surge higher since The Fed announced the taper (to its highest close since June)…

Oil traded in an unusually narrow range for the day, ending unchanged…

Finally, we note that all of the most recent surge in stocks has been a giant short-squeeze. Notice in the following chart that both gross longs and gross shorts have fallen as the market ripped…

Source: Bloomberg

In fact, this plunge in gross shorts has pushed it back to its smallest short position since Jan 2009. The last 8 weeks has seen over 200,000 ES short contracts liquidated – that's the most-aggressive 'short-squeeze' since Feb 2011 (after which the S&P fell over 6%, rebounded, then plunged 17%)…

Source: Bloomberg

In the run up to that prior trough in shorts, the S&P ripped 24% in 30 days after The Fed created TALF, Treasury unleashed TARP, and The Fed moved to ZIRP. This time, the S&P surged 9.5% in 25 days. After shorts hit that Jan 2009 trough, the S&P crashed 28% to its '666' lows…

Source: Bloomberg

Buyers are about to run out of willing/forced sellers. Trade accordingly.


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