Bubble Market Bloodbath As Powell-Put-Strike Plunges

What a shitshow! It appears that the Hindenburg Omen struck again…

Source: Bloomberg

Bubble markets busted…

Source: Bloomberg

Omicron anxiety? Good news is bad news? Taper Tantrum? Technical Default fears? It was all going so well as long as ‘gurus’ could rely on The Fed do support the market with the promise of moar. But sometimes, things just need to purged…

Worst 3-day start to a December for stocks in about 20 years. Since Omicron reared its ugly head, Small Caps are down over 8%, Nasdaq down over 5% and the rest of the US majors down over 4%…

The last few minutes today saw the ‘standard’ algo buying panic which almost managed to get The Dow (orange) back to unchanged…

This is the longest stretch of +/-1% swings for the S&P 500 since the election…

Source: Bloomberg

A very technical late-day bounce lifted Nasdaq to its 100DMA, bounced The Dow off its 200DMA, but couldn’t break the S&P back above its 50DMA…

New 52-week lows are surging…

Source: Bloomberg

Within the Nasdaq (3765 stocks) 5 stocks Microsoft, Google, Apple, Nvidia, Tesla account for 71% of 19% YTD gain.

Cyclicals have been clubbed like a baby seal since the emergence of Omicron (Cyclicals were also slammed this week)..

Source: Bloomberg

China tech puked. Nasdaq Golden Dragon index crashed over 9% today, its biggest drop since 2008…

Unprofitable tech stocks suffered their biggest weekly loss since March 2020, crashing to their lowest since Oct 2020…

Source: Bloomberg

VIX soared higher this week, closing above 30 for the first time since February…

Treasuries were chaotic this week as taper tantrums broke out at the short-end and the long-end was aggressively bid. The chart below is from the start of Omicron anxiety…

Source: Bloomberg

The 30Y Yield is at its lowest of 2021 (and 2Y at its highest yield since March 2020)…

Source: Bloomberg

The yield curve imploded in a hissy fit of fear that The Fed is heading for a major policy mistake…

Source: Bloomberg

Powell’s hawkish pivot sparked a surge in rate-hike odds with the market pricing a full hike by June 2022…

Source: Bloomberg

Critically, the market is pricing in rate-cuts between 2023 and 2025… In other words – The Fed policy puke…

Source: Bloomberg

The dollar ended the week slightly lower but had some wild swings on the way…

Source: Bloomberg

Cryptos were wild this week with today’s liquidation-like puke dragging everything down. ETH outperformed, clinging to a modest 2% gain on the week while BTC ended down around 1.5%…

Source: Bloomberg

Bitcoin broke down to a $51k handle and below its 100DMA (lowest since early October) and Ethereum tested a $4k handle, breaking back down below its 50DMA…

 

Black Gold was a bloodbath this week but the barbarous relic managed to cling to unchanged since the Omicron variant emerged. Copper and Silver down hard…

Source: Bloomberg

NatGas crashed to its worst week in almost 25 years…

Finally, if you need an analogy, “you are here” in early December 2018 as the market puked 20% and forced Powell to flip-flop from his hawkish position…

Source: Bloomberg

The word ‘brace’ comes to mind as the market tries to find out just where the new Powell Put strike level is.