In an effort to wrestle S&P 500 to VWAP, to enable panicking professional sellers out, a sudden bid for crude oil and commodity currencies appeared shortly after 8amET...
S&P ramp to VWAP...
On the back of all things commodity-related...
Some context for the sudden bid in FX...
Now that VWAP has been hit, we wonder what happens next?
Charts: Bloomberg
We have closely followed the work of SocGen's under-appreciated Albert Edwards and Andrew Lapthorne for years for one simple reason: they have been right all along, however as a result of ever more aggressive and extensive central bank interventions, the mean reversion that should have happened years ago, keeps getting postponed, assuring that when it does finally happen the outcome will be epic. That time may be approaching.
Curious who else got slammed in Friday's junk bond debacle? The answer - everyone's favorite CNBC commentator, "world renowned commodity trader" Dennis Gartman. From his latest letter:
Small doors, large crowds. Amid yet more liquidations (Brazilian Bank BTG flushing its European credit exposure and Lucidus US HY fund), the large high-yield bond ETFs are tumbling in pre-market as two years worth of under-water easy-money trend-followers head for the exits from the "highly liquid" ETFs.. . and crush what little liquidity there is in the underlying. When will The Fed step in and buy US HY debt to stymie "fire-sale" prices?
This will be the 8th drop in the last 9 days...
As MacroMan noted earlier,
Earlier today, a third HY domino fell as the $900 million Lucidus Capital Partners announced that after an October redemption request by a “significant investor,” the fund has liquidated and will return money to investors.
If you’re a Lucidus investor or counterparty, CEO Christon Burrows “thanks you for your support.”
The Lucidus liquidation comes on the heels of last week’s news that Third Avenue and Stone Lion Capital have suspended redemptions in a (likely futile) attempt to avoid going down in history as the guys who started the HY firesale.