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Quad Witch ‘Pins’ S&P At Exactly 2500 Despite Dismal Data, Nukes, & Terrorism

So to be clear, this week we had:

  • Hurricane Irma crushes Florida
  • North Korea test fires ICBMs across Japan (again)
  • Economic data misses across the globe (China and US most notably)
  • Terrorism in UK and France

And the result – drum roll please – new record highs for The Dow, The S&P, and The Nasdaq… with The Dow's best week of the year!!

 

And in case you wondered what sent stocks soaring this week… The Fed (which is supposedly on the verge next week of starting to reduce the balance sheet) saw a $17.7bn spike in its balance sheet – the biggest weekly jump since Dec 2016

But, now that the ubiquitous pre-Quad-Witch ramp in stocks is over (and with The Fed about to start 'normalizing' the balance sheet)… what happens next?

We think this sums the week up nicely…

*  *  *

So having got that off our chests… here's what happened this week (in the markets)…6-day win streak for The Dow – best week since Dec 2016

S&P was perfectly pinned to close at 2500 for quad witch…

 

VIX was clubbed all the way down to 10.00…

 

But we note that the VIX term structure is notably steepening…

 

Small Caps were best on the week thanks to a short-squeeze at the open every day…

 

FANG Stocks opened notably lower but for the 5th day in a row were panic-bid immediately…

 

Financials outperformed on the week (with Utes down)…

 

But, notably Financials were firmly rejected at their 50DMA…

 

Treasury yields rose once again today but once again the long-end outperformed…

 

5s30s flattened dramatically (to its lowest since early July) despite the bearish tilt…this was the biggest flattening since December!

 

All of which makes perfect sense in light of financials huge week…

 

The Dollar Index slipped lower for the second day in a row but ended the week higher (best week in 5 months!)

 

Of course, the big headlines today (and this week) were made by Cryptocurrencies.

Bitcoin crashed as much as 20% at one point today after news of all China bitcoin exchanges being closed by BTFDers came rushing in to save the day…

 

Nevertheless this was the worst week for Bitcoin since jan 2015 (but for some context – even after this most recent crash, BTC is still up 275% YTD)

 

Copper was worst among the major commodities (copper's worst 2-week drop soince December) and Crude was best (biggest week for WTI since July)

 

But Crude failed to hold $50 again… (RBOB biggest weekly loss since June)

 

Gold and Silver fell on the week… (worst weekly drop in 2 months)

*  *  *

And one more thing… US 'Hard' Economic Data (i.e. excluding 'soft survey'-based data) collapsed to its weakest since March 2009 this week…

 

But it's probably nothing…

 

Bonus Chart: WTF-Panic-Buying from Korea's Plunge Protection Team after North Korea's missile launch!!

 

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