Dow crashed over 1000 points today...

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Time for "Markets In Turmoil" special

Markets "turmoiled" again today as Treasury yields spiked on a weak auction and the implications of a budget deal that means more supply is coming. This spooked stocks once again and XIV, the Inverse ETF, tumbled at the open - after ramping stocks delusionally into the open. As stocks got monkey-hammered again, so bonds were bid and ended with a relatively small rise in rates as plunges in Risk-Parity funds likely prompted forced delevering in stocks and bonds. Perhaps most notably, credit spreads started to snap wider and rate volatility spiked as equity market contagion spreads.

Video length: 00:00:08

Investors have swung from "extreme greed" to extreme fear" in a record few days...

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Source: CNN Money

While the mainstream media attempts to calm investors that this is a "healthy pullback," one of their pillars of support just snapped. HY credit spreads snapped wider to 10-month wides and even IG spreads spiked...

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This should not be a surprise as HY and IG ETFs have seen major outflows...

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As credit investors fear rising rates more than anything else...

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And the last week has seen huge equity outflows from US ETFs...

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And as Risk-Parity funds see one of their biggest crashes in history...

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And Risk-Parity had another ugly day today as aggregate bond and stock returns were negative...

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So bonds and stocks were sold...NOTE that as stocks dumped, bonds were bid but that never stabilized stock flows...

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In cash markets, the selling started at the open after a gap up...and accelerated into the close!

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Dow's lowest close since Nov 30th

Futures show the chaotic manipulated swings...

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All helped by XIV still!!

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VIX is back above 35...

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As equity vol surged again...

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All the major US equity indices have broken key technical support levels...

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10% Correction Levels:

• Dow 23954
• S&P 2585
• Nasdaq 6755

Financials are now underwater for 2018 (despite soaring rates?) and Tech is also red...

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While stocks were slammed, bonds actually ended the day with only modest yield rises (though plenty of vol)...10Y and 30Y yields are up on the week...

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30Y Yields reached new cycle highs and 10Y yields tested them...

30Y INTRA

Today's yield spike early on, spooked stocks again...

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As rate volatility begins to surge...

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The Dollar Index ended the day practically unchanged after rallying overnight (on Asia weakness) and selling off this morning...before rallying back as carry trades were unwound...

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But the last 24 hours has seen incredible moves in offshore Yuan... Yuan is 1.3% weaker in the last two days against the dollar - the biggest drop since Aug 2015's devaluation...

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Despite the dollar's quiet day, crude and copper slid lower while gold and silver trod water...

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WTI was back to a $60 handle and RBOB back at 1.75...

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Cryptos were volatile today but Bitcoin ended higher, extending gains from the pre-hearing lows...

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Bitcoin held above the $8,000 level but the correlation with VIX remains a worry...

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Overheard on CNBC this afternoon - "Volatility is here, embrace it, and we go back up again"

Easy eh?

It appears every asset class is starting to "embrace" the vol..

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