INDU Dow Industrials (fka $INDU)

[Pro-Life]

"It's Not A Risk-On Rally, This Is The Biggest Short Squeeze In Years" Says Bank Of America
Submitted by Tyler Durden on 10/09/2015 08:02 -0400

http://www.zerohedge.com/news/2015-10-09/its-not-risk-rally-biggest-short-squeeze-years-says-bank-america

We said that just as likely presaging another major leg down in equities, this move may simply mean the following: "a central bank intervenes, or a massive forced buy-in event occurs, and unleashes the mother of all short squeezes, sending the S&P500 to new all time highs."

While a central bank did not directly intervene, it did so indirectly when the September payrolls was a complete disaster, slamming any possibility of a rate hike in 2015, largely confirmed by yesterday's FOMC minutes which showed that the "no hike" decision wasn't close at all, and that as we first presented, a rate hike is now mid-2016's business, if ever.

Today, we got confirmation that what the rally of the past week has been all about is precisely that: a massive short-covering squeeze, when Bank of America's Mike Hartnett looked at the latest weekly fund flow data and noted a "monster $53bn MMF inflows vs redemptions from equity ($4.3bn) & fixed income funds ($2.4bn)...rising cash levels indicate big risk rally (from intraday lows last week SPX +7.7%, EEM +13.5%, HYG +4.2%) driven primarily by short-covering rather than fresh risk-on."

See the rest of the article with charts at the link above...