Zero Hedge
0
All posts from Zero Hedge
Zero Hedge in Zero Hedge,

Biggest Short Squeeze Since 2008 Bank Bailout And Epic VIX Rigging Sends Stocks Green For The Week

UNRIGGED!!

VIX ETFs were screwed with...

 

To ensure S&P closed Green!!!

 

*  *  *

After a week like that, we think everyone needs some downtime... relax... (NSFW)

 

Before we get to stocks, oil is the big news this week... as a short-squeeze morphed into leaked news which became the real news of a Saudi invasion of Yemen...

 

This is the biggest weekly gain for WTI since Feb 2011 (when politicial unrest surged in MidEast and Northern Africa with Libya at the heart)

 

As the Oil-USD correlation regime has flipped dramatically post-FOMC Minutes...

 

Sparking a huge squeeze higher in Energy stocks...

8 of the 10 biggest gainers in SPDR oil and gas exploration ETF are refiners which are more like inverse bets on oil (crude is an input thus betting on dropping oil prices flowing through to margins)... so the ultimate irony is XLE is surging on negative oil bets and dragging oil higher.

Because that has worked out so well before...

As Credit Suisse noted - nothing has changed with the fundamentals.

*  *  *

Volume today in stocks was abysmal...

 

Energy's ramp supported much of the gains in the broad indices...and with panic buiyi9ng at the close thanks to XIV manipulation

 

A look at The Dow futures gives a sense of the panic.. and the resistance that it can't break...

 

Futures for the week show the craziness of the moves... DUDLEY IS THE NEW BULLARD!!!

 

VIX was all kinds of messy this week - slammed lower into the close to guarantee a green close for stocks

 

But VXX shorts were dramatially squeezed every day... this was VXX's biggest weekly gain since May 2010.. and the biggest 2-week rise (up 68%) ever...

 

56 members of the S&P 500 gained more than 5% this week!!!

 

And "Most Shorted" had their best (or worst) 3-day surge since Nov 26th 2008 - i.e. the biggest short squeeze since post-Lehman creation of TALF, bailout of Citi, froced acquisiion of BofA and Merrill, and Fed buying GSE debt

 

The last time shorts were squeezed this much, this happeened...

The Bottom Line: Window Dressing (Most Momentum) and Squeezes (Most Shorted) provided all the ammo needed to create the illusion that all is well

*  *  *

Treasury yields had an ugly week as investors were awakened to just what China's devaluation dilemma means... Rising odds of a Sept hike (rom Fischer) sent the long-end lower and front-end higher today...

 

The USD Index was up around 1.3% on the week - the best week in the last 6 weeks led by AUD and EUR weakness...

 

Commodities were mixed on the week with USD strength sending PMs lower but growth hyper, squeezes, and war driving copper and crude higher...

 

Charts: Bloomberg

Bonus Chart: Briefly this week, US equities reflected their short-term macro fundamentals...

 

Bonus Bonus Chart: This is the data The Fed is dependent on...

Here's the "data" they're waiting on pic.twitter.com/AWB7UVrqSQ

— Not Jim Cramer (@Not_Jim_Cramer)