Monday, February 5, 2018

The Lehman Moment 2018

The overnight gap got bought at the open what else? One more gap 'n crap and this is all over...

Any questions?

First off, a gauge of sentiment from my favourite hedge fund manager constantly talking his own book:

"Don't worry, there's lots of cash"

The entire tax cut rally has now been obliterated:

Due to extreme volatility sensitivity (top pane), today was the the largest one day VIX % move since before Lehman, and likely ever (lower pane):

Which in turn triggered the after hours collapse of the Inverse VIX ETFs, which were down ~80-100% on the day...

A termination level event and one that put a MASSIVE bid under the VIX futures (UVXY +40% after hours):

As predicted last August on Zerohedge:
ZH: What Happens When VIX Goes Bananas

"A violent rise in volatility could be driven by just a 3% to 4% one-day S&P 500 selloff"

The 1-day percentage change is a big deal in the VIX complex because the levered and inverse VIX ETFs and ETNs rebalance daily based on the percentage change, and some of the thresholds for forced unwinds are based on the percentage change.  This is why lower vol creates higher risk.

The Russell/Dow crash ratio duly warned this would happen:

Consumer Staples now warn of 2008 "end of cycle" event:

Crypto annihilation

"Printing money was their secret to effortless wealth"