Business

WTI Crude has ramped into this morning's DOE data back to the scene of the crime from last night's API ugly data dump. With API reporting a build that doubled expectations, DOE reports a 3.6mm build but worse still yet another major (4.6mm barrel) build in gasoline stocks for the largest 3-week build in history. Crude initially tumbled but the algos took over and ramped to yesterday's highs...running stops (but how long will that last?)

Yesterday when we presented Tom DeMark's latest technical forecast, which anticipates a 5-8% bounce in risk before the next leg lower in equities, we said to "look for the next few days to see if DeMark still has his magic" adding that "we, on the other hand, would rather wait for "Gandalf" Kolanovic' next take."

In the most blatant and open admission of direct manipulation, China's Vice President Li told a room full of Davosian elites that China is willing to keep intervening in the stock market to make sure that a few speculators don’t benefit at the expense of regular investors. Following last night's largest liquidty injection in over 3 years (and subsequent plunge in Chinese stocks), it appears the Chinese economic/market "bucket" has more holes than the intervention 'hose pipe' can handle.

As we showed previously, when it comes to banks' exposure to energy, things have gotten beyond nebulous, especially in the aftermath of the (officially denied, even though we stand behind it 100%) report that the Dallas Fed has been "advising" banks how to mark their oil and gas loan exposure in discussions behind closed doors.

From omnipotence to impotence... in 90 minutes

Just as we warned earlier,

As for the market reaction, keep a close eye on the duration of the risk bounce: if risk refuses to push higher from here, or worse - tumbles - the market will have clearly given its verdict on all current and future Draghi jawboning and called the ECB's bluff: no more words, actions are now demanded.