Stocks & Bonds Hammered As Hindenburg Omen Strikes

Amid the chaotic swings of the last few days, a “Hindenburg Omen” has been triggered in the Nasdaq for the first time since the pre-COVID peak.

While there are slightly different constructions of it, and there is disagreement on what thresholds should be used to trigger an alert, Refinitiv notes that a more stringent construction of the indicator shows a signal popped up Tuesday on the Nasdaq. The last signal developed 12 trading days ahead of the Nasdaq’s Feb. 19, 2020 top and what would then prove to be a 33% swoon in the tech-laden index into its March trough.

Source: Refinitiv

And while Nasdaq Composite triggered the ominous sounding warning, As Tom McClellan notes, the broadest equity index, NYSE Composite, came very close: ” The other conditions being met, it needed to have seen more than 91 new highs AND new lows. It only saw 89 new lows. Pretty close.”

Source: Bloomberg

Primer on Hindenburg Omen here…

All the major indices were ugly today, led by the Nasdaq which is now in the red for March…

Nasdaq broke below its 50DMA…finding major support once again at 13,000…

And the S&P closed at its 50DMA…

QQQ tumbled to its Put Wall…

Nasdaq 100 is now red for the year…

Hedge fund favorites are getting clubbed like a baby seal…

Source: Bloomberg

And the big-tech index is now at its weakest relative to small caps since February 2020…

Source: Bloomberg

Momo was monkeyhammered to its weakest since 2017…

Source: Bloomberg

Value continues to outpace growth (back to its highest since June 2020)… but it has a long way to go to break the decade-long downtrend…

Source: Bloomberg

Russell 1000 Growth/Value broke and has sustained that break of a key support area…

Source: Bloomberg

FANG stocks plunged today, second biggest drop since the election…

Source: Bloomberg

Rocket crashed back to earth today…

Cathie Wood crushed as ARKK hits a bear market…

TSLA tumbled…

 

Bonds bloodbath’d again today with the belly up around 8bps… European seem like the big sellers?

Source: Bloomberg

10Y stalled just shy of 1.50%…

Source: Bloomberg

Foreign buyers of US Treasuries are getting some serious compensation for a hedged position…

Source: Bloomberg

5Y Breakevens soared above 2.50% today…

Source: Bloomberg

…the highest since 2008…

Source: Bloomberg

And this is why it matters (and why The Fed is fearful of tamping down inflationary fears!)

Source: Bloomberg

The dollar ended the day higher but in a tight range this week…

Source: Bloomberg

Bitcoin burst back above $50k today…

Source: Bloomberg

And Ethereum jumped back up to $1600…

Source: Bloomberg

Oil prices rallied on the day, despite a record build in crude stocks (ahead of tomorrow’s OPEC+ meeting)…

Copper was lower on the day…

Gold futures plunged below $1700 for the first time since April 2020…

Silver also slumped but remains rangebound (between $26 and $27)…

Gold keeps falling as Treasury yields rise and ETF rout deepens. Gold ETFs holdings had the 12th straight day of declines Tuesday, the longest losing streak since Dec2016.

Finally, while spot breakevens continue to support stocks (and hurt gold), we do warn that rise in the forward inflation curve is flashing a warning over valuations…

And did big-tech just get too over-valued relative to the market?

Source: Bloomberg