Yes,the Dow records its greatest one day point drop in history.Interesting price action today.S&P had its 200 SMA at 3050 and when the index hit this critical technical level,the Plunge Protection Team (PPT) pulled all the stops with new Fed repo liquidity and tried to buy back the market which almost went positive but it was a bull trap as the markets seriously flashed out and algos just went nuts and sold in huge volumes in the last 3 hours of trading.Bond yields hit a historical low yesterday.

Now the Fed is under IMMENSE PRESSURE to cut rates and pump even more liquidity.Trump bullying the Fed to pump even more money but unlike prior market corrections caused by financial distress that was "resolved" by more money printing,the coronavirus is a black swan that cannot be mitigated by money printing.The only hope for this bubble market is that a vaccine or antivirus drug is found or as scientists hope the summer months in the Northern Hemisphere may subdue the virus.

For those of us shorting this market its serious $$$$$$ everyday

Great analysis! When did you go long bonds? Which tenor (s) ? Did you post that here? Can't seem to see that. Also what short positions did you take, and when? Can't see those here either. You can share link for ease of reference.

Wow MONSTER RALLY on Wall Street.Dow had its biggest single point gain in history from having its biggest single day point loss in history last Thurdsay.Dow up +1,293.96 (5.09%),S&P 500 up +136.01 (4.60%) and NASDAQ up +384.80 (4.49%).So why the record gains after record losses last week?Simple,as its always the case in first world markets;it all about the CENTRAL BANKS.Fundamentals and valuations matter little in US markets,its all about how much liquidity central banks pump out that determines stock and bond prices.

On Friday,the Fed assured the market they would do whatever it takes to support the market via extra liquidity.Yesterday the European Central Bank and Bank of Japan uttered same sentiments of additional liquidity support and European Stocks and Nikkei finished up.Of course another factor of the rally is that many investors had large short positions over the weekend expecting the market to continue its decline on Monday and were caught unawares by rising equities thus found themselves short squeezed and covered their shorts at losses forcing the market even higher.Bonds also sold off from their record highs as their safe heaven bid was lessened by rising stock markets.Seems the 50 billion USD repo injection by the Fed into the markets today did the magic also.

The market is forcing the Fed to inject more liquidity via rate cuts.Even the major Wall Street Banks that own the Fed expect the Fed to cut rates by at least 50 basis points and some expect this possibly this week before the official March 17-18 Federal Open Market Committee meeting.If the Fed doesnt deliver markets will sell off massively once more.Fed doesnt want to cut rates but the market is forcing its hand and rate cuts are already priced in so US central bank has no choice but to deliver.Fed may likely cut 25 basis points ,see market reaction and if the markets are negative,cut yet again.

Another factor that could throw a monkey wrench into the markets is the Democratic Presidential Nomination Super Tuesday race today.If socialist Bernie Sanders wins,the markets may puke again as Bernie has guaranteed he will dismantle the "corrupt" Wall Street money machine and tax them to death for more social welfare.If Biden or Bloomberg wins markets will breathe a sigh of relief as both are pro Wall Street.Thus Democratic primaries will affect the markets just as profoundly as central bank liquidity.

It will be interesting to see if this was a dead cat bounce or truly a sustainable rally.Central bank money printing cannot make people travel to coronavirus infected areas or bring Chinese workers back to their factories but can provide temporary relief to the markets.As the virus starts to spread in the US,there is already panic buying of essentials in US retail stores,business conferences are being cancelled and less are engaging in air travel.Such human caution and behavior cannot be remedied by central bank liquidity injections but can prop up markets temporarily

Stocks stabilised and we even have some gains. Even Tesla is stable and gaining with +79% YTD.

Wow a bloodbath in the Oil Market.Friday Western Texas Intermediate closed at around 41 USD per barrel and opened Monday at 30 USD and some point was down to 27 USD.The rout in oil also has tanked almost all asset classes with stocks in East Asia closing down about 5% and US Dow futures down over 1,200 points.US 10 year yield dropping to all time low of 0.34%.Cryptos also whacked

Crazy geo-politics.Russia walked out on an OPEC-Russia meeting that was to agree to cut production to prop up prices in light of reduced oil demand due to coronavirus.Moscow wants to keep pumping to push prices lower and punish the US shale oil frackers in retaliation to US sanctions on Russia.The Saudis angry that Putin refused to cut production,now wants to flood the oil market with even more oil to punish Russia and the Saudis also want to punish the US oil frackers.

The US shale oil frackers are in trouble.They need high oil prices to stay afloat and this dip in prices is causing serious distress.Moreover,these frackers are in business only because they can finance operations via borrowing through the US junk bond market where the bond rates are artificially suppressed by the Fed money printing shenanigans.The US junk bond market (where also Tesla gets lots of its financing) has been in distress for a number of months now.In fact recently in the last few days the junk bond market froze up with no new bond issuance.Same happened in late 2018 where the junk bond market froze for 41 days (also US stocks dropped 20% then)forcing the Fed to halt its rate hike and Quantitative Tightening cycle and reverse to Quantitative Easing and rate cuts.It gets worse that even some Investment Grade Triple BBB bonds have now frozen up also with no new bond issuance in over 1 week.The seizing up of the over 10 trillion US corporate bond market is a far greater threat to the US economy than falling stocks and the Fed is actually reacting to the distress in this sector.

The US corporate bond market is just as ridiculously leveraged as the sub-prime madness of the early 2000s.Cheap loans (called leveraged loans) to undeserving companies has resulted in zombie companies that just stay alive due to constant refinancing in the junk bond market and are similar to the sub-prime loans of the housing bubble.Then the corporate bonds from these leveraged loans are just as ridiculous as the Mortgage Backed Securities (MBS) of the housing meltdown.Furthermore,the derivative products called Collateralized Loan Obligations (CLOs) for these corporate bonds are just as leveraged as the Collateralized Debt Oligations (CDOs) of the housing bubble that collapsed spectacularly in 2008.

Again just like in the housing bubble,these corporate bonds are being deliberately misrated by the rating agencies Standard & Poor's (S&P), Moody's, and Fitch Group.During the housing bubble,these rating agencies over rated the MBS and CDOs giving them triple AAA rating because the banks were paying them to mis rate them so that they can sell to naive funds.Same thing happening now.35% of the Investment Grade BBB rated US corporate bond market is junk and should be downgraded to junk bond status but the rating agencies are refusing to do so.In the United States,large funds like pension and mutual funds are barred by law from buying junk bonds thus if the Triple BBB bonds are correctly downgraded to junk then these major funds would be forced to liquidate their positions and will be Armageddon in the US corporate bond market.

With all the drama going on the Fed is under IMMENSE pressure again to cut rates yet again.They already did 50 basis points last week and there is pressure they do another 50 basis or even 75 basis points in their next March 17-18 meeting or even earlier.I dont see how the Fed can withstand the pressure and most probably will cut again this month.

Things just getting thicker by the day and global recession far worse than 2008 screaming loudly.

Futures on the S&P 500 were halted Sunday night after they declined 5%. So-called circuit-breaker levels are the thresholds at which exchanges halt or close marketwide trading due to extreme declines.No pre-market trading until market opens on Monday at 9.30 am US Eastern Standard time




And as I stated below the corporate bond market has frozen up also





And of course oil suffered its biggest single day drop (30% decline) in history and US 10 year bond records its lowest yield in history.

History is being made folks.