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

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.

Tyler Durden
Tue, 02/09/2021 – 16:01

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