Small Caps Surge To Longest Win Streak Since 2019 As Dollar Dives

The dollar dived to its lowest in 2 weeks today

Source: Bloomberg

That’s dollar weakness against other fiat faux pas, relative to ‘alternative currencies’, the dollar is in freefall…

Source: Bloomberg

“You have meddled with the primary forces of nature, Mr Powell, and I won’t have it! Is that clear? “

All eyes today were the win-streaks in stocks and the machines desperately tried to keep the S&P green (for its longest win streak since August) as Small Caps completed their 7th straight day higher – the longest streak since Dec 2019 (8 days would be longest streak since Feb 2019). Dow and the S&P ended red with Nasdaq 100 underperforming on the day…

Source: Bloomberg

As a reminder, it’s been a big year for Small Caps…

Source: Bloomberg

Heavily-shorted Biotechs stabilized today…

Source: Bloomberg

But penny stocks extended their recent ramp…

Source: Bloomberg

Cannabis-related stocks have been ‘higher‘ recently and extended gains today…

Source: Bloomberg

“Most Shorted” stocks and “Most Owned”-by-hedge-funds stocks both extended gains today…

Source: Bloomberg

Meanwhile, in corporate bond land, HY bond yields crashed below 4% for the first time in history…

Source: Bloomberg

Treasuries ended the day unchanged, trading in a narrow range all day…

Source: Bloomberg

As the dollar slid, cryptos were bid with Ethereum testing back up to $1800 record high late on…

Source: Bloomberg

And Bitcoin pushed above $48k overnight…

Source: Bloomberg

Gold held on to modest gains today…

Source: Bloomberg

Silver futures ended lower after pushing up towards $28 intraday…

Source: Bloomberg

WTI Crude futures continued to rise, bouncing back significantly from an early puke ahead of tonight’s API inventory data…

Source: Bloomberg

Finally, as we pointed out earlier today, options gamma an opex is opening the window for a trend change into the last week of February, which fits with some eerie analogs to last year’s market performance…

Specifically:

• Blue line exact same angle of increase from Q3 to now

• Red line = Jan monthly OPEX

• Red arrows = both markets saw drawdowns into Feb

• Orange line = Feb monthly OPEX

• Feb ’20 pinned to the large 3400 gamma strike

• Feb ’21 seems poised to pin to 3900 gamma strike

But remember, it’s different this time.