Every day is different, right? It's an efficient, random-walk, right?

Wrong!

Whether it's the machines vicious-circling their own pattern-recognition algos or The NYFed's PPT Desk arriving at work and taking charge, the US equity market has exhibited a strong intraday 'seasonality' for the past two months.

As Bloomberg exhibits below, the reality of trade wars take a bite out of stocks overnight, only to suddenly and inexplicably bid as the US equity markets open. However, once European markets close, the intraday party is over and sellers come back en masse, dumping into the US equity market close.

 

“This type of back and forth price action has defined 2018 thus far,” said Frank Cappelleri, senior equity trader at Instinet LLC.

“We’ve seen strong moves in both directions fade quickly, no matter what time from we’re talking about it -- be it intraday or over multiple weeks. The long-lasting moves of last year have been challenging to find for nearly six months now, making it hard to trust any budding trend up to this point.

As Bloomberg notes, the contrasting performance may also reflect divergent sentiment in the U.S. versus the rest of the world. Perhaps not coincidentally, the S&P 500 has outperformed stocks from Europe to Asia as tax cuts bolstered profits for corporate America... because Trump's trade war has to be perceived as a positive for the US economy (and stocks - as everyone knows - are discounting the awesomeness of the economy going forward, just like they did in March 2000 and Dec 2007)

And at the same time, as "trade war' rhetoric has recently re-escalated, VIX has plummeted divergently...

However, as we have noted previously, while Johnny 5 and his algo acquaintances 'PPT' the US markets intraday, the consistency of the late-day fade implies the smart-money - which tends to trade when the market is at its most liquid - is continuing its exodus of the stock market, happily selling to dissonant retail investors and corporations...