The Wolf Finally Came.

And so we close the book on February, the month when the boy who cried wolf was finally telling the truth.

The month when the inverse and levered VIX ETP rebalance risk that would never be realized was finally realized, wiping out the short products literally overnight and leading to a collapse of the products’ vega-to-buy the following day (the risk they posed was eliminated by the short vol. implosion):

The month when the forced de-risking by the systematic crowd that would never happen finally happened, resulting in the worst week for CTAs in history and triggering what, on some estimates, was ~$200 billion in offloaded equity exposure from trend followers and risk parity:

And the month when the correction that would never come finally came, snapping a 499-session streak:

(Goldman)

The Dow and the S&P broke 10-month winning streaks, their longest since 1959:

February was the second straight month of markedly higher 10Y real yields and if you do the math there, this would be the largest two-month increase since the election:

Also this:

.@bespokeinvest beat me to it but…not a good start to the year for ultras pic.twitter.com/xTuW7g7Luj

— Luke Kawa (@LJKawa) February 28, 2018

And note this:

The dollar posted its first monthly gain in four as the market struggles to reconcile higher yields and an aggressive Fed with deficit worries and an administration that seems hell-bent on having a weaker currency:

Oil suffered its first monthly drop since August (WTI plunged on Wednesday as the EIA report betrayed a larger -than-expected inventory build):

When you think about the upcoming elections in Italy, don’t forget this “what could go wrong?” chart:

This was the worst month for the EM ETF since at least January 2016 (Powell’s hawkish testimony ensured emerging market stocks closed the month on a downbeat note):

Mainland Chinese shares had their worst month since the bloodbath that unfolded in January 2016 when jitters about the ongoing yuan devaluation threatened to plunge the globe back into deflation.

Remember how the Kosdaq (South Korean small caps) and H-shares were the standouts in January? Yeah, well “the first shall be last”:

Oh and Trump accidentally said something right on Wednesday afternoon which, much like February’s market action, proves that anything is indeed possible…

"You're afraid of the NRA," President Trump slams senators in a stunning exchange over whether they would introduce legislation raising the age to buy firearms from 18 to 21 https://t.co/6Env0DFfYH pic.twitter.com/LBvj4xi8ic

— CNN (@CNN) February 28, 2018