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Small Caps, Crude, & Crypto Crushed As Inflation-Induced Taper-Tensions Ignite

Courtesy of ZeroHedge View original post here.

The Dow managed to get back to even from pre-Omicron levels today (NOTE in the chart that Nasdaq also touched the unchanged line very briefly before being rejected), but as the day worse on weakness hit and took everything back into the red since Omicron first hit…

Small Caps were clubbed like a baby seal today but everything tumbled into the red as post-margin-call weakness hit (1430ET). The Dow battled for green in the last 15 minutes…

Bulls better hope this trend in tech doesn't continue…

Eye-opening chart ???? Without 5 biggest stocks Nasdaq is 25% down YTD. Having said that are equities overvalued? Ht @GavinSBaker pic.twitter.com/d4rznC7KUE

— Michael A. Arouet (@MichaelAArouet) December 9, 2021

The 'Recovery' trade continued to trade higher relative to 'Stay at Home' stocks but that momentum started to fade today…

Source: Bloomberg

TSLA tumbled back to the critical $1000 line in the sand…

VIX surged higher today back up to around 22 and a 19 handle at the lows…

Yields drifted lower from the Asian open but were monkeyhammered (albeit briefly) higher due to an ugly 30Y auction.

Source: Bloomberg

That kneejerk move was faded relatively fast however…

Source: Bloomberg

The yield curve flattened significantly today (after yesterday's ramp) as the market once again prices in policy mistakes ahead of the CPI print…

Source: Bloomberg

The dollar rallied today, bouncing back from yesterday's puke, but remains lower on the week…

Source: Bloomberg

The dollar was helped by a plunge in the Chinese Yuan, sparked by a hike in the FX RRR…

Source: Bloomberg

Cryptos were dumped again, with Bitcoin breaking back below $50k (actually to a $47k handle)…

Source: Bloomberg

Bitcoin has traded between its 100- and 200-DMA for the last few days…

Source: Bloomberg

Oil tanked today after a strong few days, with WTI back to a $70 handle…

Gold was lower on the day but silver was hit hardest, dropping 2%, and back to a $21 handle…

Finally, as the world anxiously awaits tomorrow's CPI print for signals as to how aggressively Powell will accelerate the taper (or not – expected to print a stratospheric 6.9% YoY)…

…the Biden administration appeared to pre-empt the ugliness by noting that tomorrow's CPI data "would not show the recent energy price drops." Just for some context, Regular Gas prices were up 59% YoY at the peak in November… and are down 2.4% since Biden commanded them lower (and Omicron anxiety hit)…

Source: Bloomberg

We're not sure that drop warrants a comment Mr.Biden.

Meanwhile, as inflation-anxiety builds, the correlation of the members of the S&P 500 is soaring  (they are increasingly moving as one). The last two times the intra-index correlation rose this fast, things did not end well for stonks…

Source: Bloomberg

Now that kind of drop would likely sniff out the new strike price for Powell's Put.


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