Dovish-er Fed Sparks Biggest Short-Squeeze Since Mar09 Lows

The last four days have been the biggest short-squeeze since March 2009

This won’t end well…

China rollercoastered overnight (after a dead quiet Tuesday) with a panic bid in the morning session and a dump in the afternoon…

 

European stocks extended Tuesday’s gains with Italy continuing to lead on the week…

 

From the dovish-er than expected Fed minutes, gold is the biggest winner…

 

Another day, another incessant bid under the equity market on every dip… (some weakness late on as Trump walked out on Chuck and Nancy)…Trannies dramatically outperformed…BTFD is back!

Stocks are up 8 of the last 10 days now. Best start to a year since 2010.

Small Caps are up a stunning 14% from the Mnuchin Massacre Xmas Eve lows…


 

While the last 4 days are the biggest short-squeeze since the March 2009 lows, the squeeze off the Xmas Ever Mnuchin Massacre is unreal…

 

VIX and credit spreads collapsed further…

 

The dovish Fed minutes exaggerated the shifts in the yield curve on the day with the short-end outperforming (2Y -2bps) and long-end weak (+2bps)…

 

Steepening the yield curve…

 

And the expectations for Fed rate moves shifted very modestly dovish on the day (but well off the 26bps from Jan 3rd)…

 

The Dollar Index tumbled most since Nov 1st 2018 to its lowest since Sept 2018…

 

 

Cryptos continue to tread water…

 

Spot the odd one out…

 

Bull market for oil off the lows…

 

Gold in yuan bounced back into the green for 2018…

 

Finally, we note the total disconnect between the weaker dollar (dovish) and hawkish trend in market expectations for Fed rate hike this year…