Sat. Oct 16th, 2021
From <a href="https://www.zerohedge.com/"Zero Hedge

Stocks Pump’n’Dump As Crypto Slumps Ahead Of Taper-Talk, Debt-Ceiling Doubts

“…it’s that time of the month…”

As infamous market-seer, W.D. Gann once noted, September 22nd (the Autumnal Equinox) is the most important date in markets – when markets are more likely to reverse than any other day of the year. For some reason, stocks, commodities and currencies have a curious tendency to make major tops or bottoms on this day.

Source: Bloomberg

Yesterday’s late-day panic-bid off the 100DMA (S&P)…

…extended during the overnight session (extreme low liquidity in Asia due to holidays), then started to fade as Europe opened and plunged into the red as US opened. The European close sparked some renewed buying and then algos kept things green in the last hour. Dow and S&P ended the day in the red with Nasdaq and Small Caps marginally higher…

So much for Turnaround Tuesday!

“Most Shorted” Stocks were unable to hold yesterday’s late-day squeeze-fest

Source: Bloomberg

Scott Minerd, Guggenheim Investments’ chief investment officer, warned that Monday’s selloff was a “clear crack” in recent upward trend that could see the S&P 500 Index fall 10% decline to around 4,050, and as much as 20%, adding that Assets across the board are “richly priced” and that the market is ripe for a correction.

Citing uncertainties around the impact of the Evergrande credit fallout and the potential for disappointing earnings and economic data as risk factors for an extended market pullback, Minerd told BloombergTV that “the next question we have to ask ourselves: How much further could it go if we get there?”

“When you look at the technicals, you look at the charts, you look at the prospects that we’re going to disappoint on the earnings front because of the Covid slowdown, we’re ripe for a correction.”

Breadth (% of S&P

Source: Bloomberg

That may help explain the surge in ‘crash’ protection…

Source: Bloomberg

While all eyes are anticipating tomorrow’s Fed statement, Dot-Plot, and presser; today saw more pressure on the Dems to act alone on the debt ceiling and the market did not like it as the ‘kink’ in the T-Bill curve increased significantly…

Source: Bloomberg

Seasonals, Debt-Ceiling Doubts, a Taper-Tantrum, and Evergrande uncertainty…

Treasuries were quiet today, ending basically unchanged across the curve, so the long-end remains around 4bps lower on the week, and short-end unch…

Source: Bloomberg

The Dollar traded in a narrow range today, ending the day very marginally lower…

Source: Bloomberg

Cryptos were monkeyhammered again today…

Source: Bloomberg

Bitcoin tested down to its 100DMA today, plunging to its lowest since early August…

Source: Bloomberg

…and then bounced notably…

Source: Bloomberg

Precious metals extended gains today as crude and copper slipped lower…

Source: Bloomberg

Finally, this week’s slide in U.S. stocks may help reset a historical tie between earnings and inflation that has been out of whack for months. As Bloomberg notes, the relationship is based on the S&P 500 Index’s earnings yield and the annual rate of change in the U.S. consumer-price index. While the yield is typically higher, the opposite has been true since April, according to monthly data compiled by Bloomberg. 

Source: Bloomberg

Real yields for the last four months were about minus 1.6% — the lowest level since 1980 and half a percentage point away from another low, set in 1974.

Tyler Durden
Tue, 09/21/2021 – 16:01
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