Something went horribly wrong. The Dow had almost its worst Tuesday in 8 months and Treasuries their best Tuesday of the year as once the data-sparked, POMO-driven short-squeeze had run its course stocks flatlined, tumbled at the 2Y auction, the dumped around 1500ET. VIX was no help whatsoever. Trannies gave up all their gains for the month of June. Various reasons were offered for the weakness, from Dubai's weakness, Ukraine's cease-fire cessation to Syria-Iraq escalation but it appears more likely just algos ran out of stops to run and shorts to squeeze amid the plethora of 'complacent' risk indicators we have shown. Treasury yields had been dropping modestly but as the 2Y showed modest strength, so the rates complex legged lower in yield (down 3 to 5bps) and dragged USDJPY and stocks with it. The USD pushed modestly higher to unch for the week (though JPY strngth back to 102 dragged stocks lower). Commodities in general closed unch (with WTI down 0.2%) but gold and silver saw European buying early on. Stocks close at their lows with the Dow's worst day in 5 weeks... "most shorted" stock had their best day in 7 weeks.

Tuesday is the new Friday

Almost the Dow's worst Tuesday in 8 months...

Treasuries best Tuesday of the year...

The tale of the tape...

Which leaves Trannies red for June...

VIX was no help...

As the early short squeeze turned into ugliness for the "most shorted" stocks...

Which left "most shorted" stocks with their best (biggest loss) day in 7 weeks...

USDJPY and Treasuries clung together with 102.00 as the key level once again...

Commodities were quiet...after some buying in PMs in Europe

Charts: Bloomberg