Once again all eyes were on "soft" data (Philly Fed) as "hard" data (housing starts miss) disappointed and the forced buy-in pressure lifted...
7 days up in a row for the S&P 500 (longest streak since March 2013) was the limit it seems as Catalyst's statement that it had completed its forced buy-in to cover and Trump's comments about how awesome stocks are capped it...
The Dow managed to creep green (record high) as VIX was crushed...
Just how much of the last 150 S&P points are due to the liquidation of 'Catalyst' (and strategies like it)?
Catalyst's footprints are clear in options volumes... As Bloomberg notes, Options Data Show Footprints of Furious Buyer as S&P 500 Jumped
Above-average volume in S&P futures options earlier this week helped drive demand for stocks amid reports of volatility funds buying back deep in the money calls. February contracts alone represented ~$19B of notional value. The most active contracts according to the CME Group website include:
February 15
- 5.9k SPU Jun. $2325 calls
- 8.9k SPU Feb. $2270 calls
February 14
- 10.9k SPU Feb. $2280 calls
February 13
- 6.8k SPU Feb. $2270 calls
- 7.1k SPU Feb. $2275 calls
- 6.8k SPU Apr. $2315 calls
- 7.1k SPU May. $2330 calls
One wonders if Catalyst CEO comments were 100% truthful about being out?
VIX was very chaotic...crushed back below 12 to ensure Dow green close..
But the decoupling remains...
"Most Shorted" stocks were actually allowed to fall today - the biggest drop since November...
Energy stocks are the week's laggard and banks remain the leaders...
Bonds decoupled from stocks yesterday and stocks started to catch down...
And Real yields are entirely decoupled...
Treasuries extended their gains from post-data yesterday but remain higher in yield on the week...
The USD Index fell for the 2nd day in a row - biggest drop since January...
Shifting the USD into the red for the week...
The Dollar seems to following 2016's analog very well still...
Dollar weakness sent PMs higher...
Note the spike bounce higher in crude prices (just like after DOE data yesterday) which entirely decoupled from Energy stocks...