Traders Buy Bonds, Bitcoin, & The Buck As Gamma Sparks Stock Chaos

A quiet macro day (positive claims data, weak Philly Fed, and positive LEI) allowed the algos to get back to work after yesterday’s Powell pummeling in stocks. Nasdaq was levitated all the way back to unchanged from pre-FOMC-Minutes, but that was all the algos could manage. Bonds remain best since the Minutes and gold slipped back to unchanged as the dollar spiked…

An ugly overnight session in futures was quickly wiped out as the cash markets opened, with The Dow managed to get back to even but failing there before the wheels started to come off again. But that dip was bought and The S&P, Dow, and Nasdaq all went green again… only to be sold into the close…

As we noted before the open, today was all about Gamma flows and as SpotGamma noted mid-afternoon, the Gamma flip line held (4420 Vol Trigger), and deltas shifted negative at that point indicates put buying, which sent stocks back down as the pump’n’dump’n’pump continued ahead of tomorrow’s opex…

And if you don’t know what gamma means, maybe you shouldn’t be playing…

Defensives dominated share gains today as Cyclicals extended their post-FOMC-Minutes losses…

Source: Bloomberg

Bank stocks fell for the 5th straight day…

Source: Bloomberg

Perhaps most worrying for the world was that “get out and party” stocks notably underperformed “hunker down at home in fear” stocks….

Source: Bloomberg

Stocks were in a world of their own relative to bonds though…

Source: Bloomberg

Treasuries ended the day modestly bid (short-end underperformed), but rollercoastered like stocks…

Source: Bloomberg

The dollar extended recent gains today…

Source: Bloomberg

To its highest since Nov 2020…

Source: Bloomberg

And even longer term, it looks for now like the dollar found support…

Source: Bloomberg

Cryptos were all bid today, but something odd happened around 1430ET (BTC panic bid as stocks suddenly puked – was only short term). BTC topped $46,500…

Source: Bloomberg

ETH was also bid, back near $3150…

Source: Bloomberg

Dollar strength sent gold lower on the day…

But, relative to real yields, gold looks underpriced by around $200…

Source: Bloomberg

Oil prices were down today but staged a decent come back after breaking down  to a $62 handle (WTI) intraday… Oil is down 6 straight days, the longest losing streak since Feb 2020

That is the lowest close since May…

Source: Bloomberg

Finally, commodity markets are on course for their worst monthly decline since March 2020…

Source: Bloomberg

Oh, and this could never really happen again, right?

Source: Bloomberg

Now that would be a taper tantrum!