Thursday, March 5, 2020

Red Thursday

Any questions?

The S&P 500 is edging towards its re-test of the level it reached last Friday, however some sectors have already failed the re-test.

The Biden bounce lasted all of one day. As we see, the S&P closed at a level similar to last Thursday (circled). S&P 3000 is the critical level now, and it has been getting pounded all this week. Bears pressed into the close but were bid back by algos. In this explosive market anything could happen tomorrow. Extreme volatility is the order of the day, as it was back in October 2008. 

"On Friday, it fell to just 163 contracts—down more than 80% from a week earlier"

What could go wrong tomorrow when last Friday had an 80% drop in liquidity as more and more bulls get margined out every day by 1,000 point daily Dow point swings.

As we see from the heat map above, Financials got annihilated today.

Banks are already below last week's level:

The dollar  versus yen is getting monkey hammered by low bond yields. Last week's low is circled.

Global RISK OFF:

STILL no sign of panic selling:

The rotation to large cap Tech continues as the entire reflation trade is now bidless 

Zooming out to the weekly view we see that Transports are almost re-testing the December 2018 lows.

Remember, this is all "temporary"

This week in summary:

Chinese stocks are the strongest in the world right now.

The only stocks still keeping this gong show from exploding:

There are no safe havens in the stock market and every sector is pointing down now.   

Today was the fourth 90% down day (down volume / total volume) in the past week and a half.

In summary

"A swathe of highly indebted companies face an incipient funding shock and risk being shut out of the capital markets as the COVID-19 epidemic mushrooms into global crisis, Standard & Poor’s has warned."

There are mounting risks of a credit crunch in vulnerable sectors of the corporate bond market, potentially rocking an unstable financial edifice with record levels of debt and set off a dangerous chain reaction."