Big-Tech & Bonds Battered But Bitcoin Bid On 'Blue Wave', Gold Pumped'n'Dumped Well, that was quite a day!! As it became clear the Republicans were losing the Georgia race, early this morning Bill Blain noted earlier that he was pinged awake by an American chum: “This is bad in so many ways that people don’t yet realise. America’s second civil war has now officially begun.” Blain added that this was from a senior Republican not given to hyperbole. After a major divergence overnight as Georgia signaled a 'blue wave' loomed (Reflation trade - Small Caps up, Nasdaq down), stocks soared out of the gate as soon as the cash market opened (and Schumer promised $2000 checks for all). But that all fell apart as scenes of protests in DC sparked major selling. The S&P is back to unchanged YTD and Nasdaq down 2% while Small Caps are up over 4% YTD... Tech stocks were the only sector to end red today... despite the utter chaos in DC?... but financials were best...Energy names remain best in 2021 for now. Source: Bloomberg FANG Stocks tumbled to lowest close since Thanksgiving Source: Bloomberg The Small Caps-Big-Tech rotation surged up to its highest since March... "Most Shorted" Stocks were screaming higher in 2021, until the Capitol was breached... Source: Bloomberg As we noted in December: And since it is the most shorted stocks that end to do far better than the most popular ones, especially during market-wide squeezes such as the one seen since March, here is also the list of 50 most-shorted stocks. As usual, our advice is to go long the most hated names and short the most popular ones - a strategy that has generated alpha without fail for the past 7 years, ever since we first recommended it back in 2013. Seems like that worked out well. VIX spiked back above 26 after falling to a 22 handle early in the day... Treasury yields surged on the 'blue wave' reflation trade... Source: Bloomberg With 10Y Yields bursting above 1.00%. While the surge felt large, the last two days 13bps jump is smaller than the 16bps jump in early November after the election night... Source: Bloomberg The yield curve steepened aggressively today, with 2s30s up 7bps to 166bps - its highest since May 2017... Source: Bloomberg Real yields spiked today, weighing on gold... Source: Bloomberg The dollar ended the day lower... Source: Bloomberg And broke below the 2018 lows at its lowest of the day... Source: Bloomberg Cryptos surged on the GA results with Bitcoin spiking to new record highs above $36,000 as DC protests escalated... Source: Bloomberg It's been a big year so far for cryptos... Source: Bloomberg As cryptos rallied gold followed but this morning saw gold get monkeyhammered lower as crypto pushed on higher... Source: Bloomberg Gold futures ramped overnight up to pre-vaccine levels then puked back lower to erase YTD gains... WTI rallied to almost $51 after inventory data - its highest since Feb... Finally, as stocks rally amid anarchy in Washington, the Smart Money remains on the sidelines... Source: Bloomberg Tyler Durden Wed, 01/06/2021 - 16:00