12:40 p.m. ET
SP-500 +1.45%, Dow +0.9%, NASDAQ 100 +2.6%, Small Caps +0.4%.
The S&P retraced yesterday's decline as if nothing happened. The rotation theme out of momentum/NASDAQ into cyclicals/Small Caps has completely reversed. As such, NASDAQ is the best performing major average, Small Caps are the worst.
NASDAQ 100 (5m)
It's the same theme for S&P sectors, yesterday's worst are today's best -Technology +2.35%, Communications +1.4% -the mega-cap FAAMG stocks are firing on all cylinders together- and the defensive sectors that were weak yesterday.
The worst performing are Financials -0.2%/Banks -1% and the cyclical sectors are generally lagging. In short there's no sign of the last 3 days of rotation, almost as if someone pushed a reset button. Even the most shorted stocks that have been squeezing, are underperforming today.
VIX (-9%) retraced nearly all of yesterday's massive bullish engulfing candle, as if nothing happened, and the other volatility indices have cme down more than usual. VVIX is still elevated suggesting some hedging activity.
Yields are higher from 0 to 3 bp in curve steepening trade, again as if it was a nice quiet, textbook bullish day and nothing happened in the final hour of trade yesterday.
Crude is up +1.4% and hovering right at the trend line from late June. Gold and silver have bounced a little, but it's little more than a consolidation of yesterday's massive decline.
The one area with some vestiges of yesterday's afternoon trouble is high yield credit.
SP-500 (1m) and HYG. While HYG has bounced, it's nowhere near confirming the retracement in the S&P.
Otherwise it almost looks as if a clean-up crew came in overnight and wiped clean the afternoon selling, and the last 3 days of rotational bias. It's quite odd.
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