Stocks Squeezed Before Late-Day ODTE Profit Taking As Bitcoin Storms To 10 Month Highs

It’s only fitting that in a day when there was no fundamental news and when everyone is waiting for tomorrow’s CPI print, with volumes near the lowest of the year, that the only thing that mattered today was positioning and technicals.

And as we wrote earlier, the most important technical factor was that hedge fund shorting of S&P futures had reached the highest level in 11 years…

… which coupled with growing pessimism about the market-leading tech generals (according to Goldman’s PB desk)…

… and absent a bucketload of bad news, meant that stocks were primed for another slow motion meltup, which incidentally is precisely what we have seen with the Goldman most-shorted index rising sharply for a second day.

Add to this the still sizable CTA bid which we previewed at the start oft he month meant at least $29BN in forced S&P buying…

“CTAs bought $20.5B of equities last week. Assuming a flat tape they should buy another $71bn over the next 1 week. $29B is SPX alone – that’s alot” – GS https://t.co/XyHzyEJ1TS

— zerohedge (@zerohedge) April 4, 2023

… and that’s why for the third day in a row, futures erased another modest dip and traded to session highs

… before some early selling across the 0DTE complex starting at 230pm ET eventually pushed stocks lower…

… with almost all sectors solidly in the green…

… including the battered bank sector, as the KRE regional bank index rose for the 4th day…

… with the tech sector weakest on the day…

… the result of treasury yields rising for the 3rd day in a row following Friday’s stronger than expected payrolls report…

… and even though the Fed’s latest career Democrat, Chicago Fed president Austan Goolsbee, strongly hinted he would dissent with any more rate hikes next month, the market was skeptical and kept odds of a 25bps hike in May at just above 71%.

In short, just another quiet, rangebound day ahead of tomorrow’s CPI print.

Elsewhere, the clash over where gold will go now that it has crossed above $2,000 continued, with the yellow metal trading on either side of this key line, as banks do everything they can do prevent a breakout to new record highs. Ironically, it’s silver that has been the sleeper hit, rising pretty much every day for the past month.

But the biggest mover for the second day in a row, was not gold but rather digital gold, with bitcoin quietly extending on its YTD gains to 82%, and trading above $30,000 for the first time since last June much to the powerless rage of fake socialists (and Indians) like Elizabeth Warren.