If you have even a passing interest in markets, macro and monetary policy (and if you’re here, you presumably do), you should be able to recite some version of the narrative behind November’s “everything rally” — the “100-year melt-up,” as Bloomberg hyperbolically dubbed it.

The cross-asset gambol (or gamble, either works) was predicated first and foremost on relief from the acute selloff at the US long-end and, more generally, on the abatement of rates vol, which had migrated out the curve during a three-month bear steepener catalyzed by a sharp repricing in the term premium.

That term premium repricing was the impetus behind the Fed’s messaging shift in October (when officials began to telegraph their inclination to skip the final hike) and just as importantly, it informed Janet Yellen’s decision to exercise caution around coupon increases in the November refunding announcement.

The stage was thus set for a reversal (i.e., a rates rally and a bid for besieged duration) when virtually all of the top-tier US macro data came in soft, turbocharging the nascent bond rally to the delight of equities.

In a Monday note, Nomura’s Charlie McElligott walked back through the sequencing of events while highlighting the read-through for rates vol and, ultimately, vol-selling in equities.

At the beginning of October, he wrote, “it became clear to ‘authorities’ (from the FOMC to Treasury’s Yellen to the National Economic Council’s Brainard) that the impulsive financial conditions tightening ‘tantrum’ was increasing [the] risk of a hard landing and/or a market ‘accident,’ so we saw the return of dovish FCI asymmetry via a flurry of messaging signaling that tightening was done.”

The turmoil at the long-end was an opportunity for the Fed to back off on the hawkish rhetoric, particularly as the famous “lags” looked poised to facilitate more “immaculate disinflation,” hopes for which were bolstered by October’s Goldilocks jobs report.

Charlie described a “massive ‘double whammy’ vol crush,” as the left-tail risk of an “over-tightening accident” suddenly diminished while the right-tail risk (i.e., a soft landing) looked much more plausible. “This smashed the entire vol surface, but particularly the upper-RHS [giving] a big boost to asset prices,” McElligott said.

Again: A calmer long-end that’s rallying was just what the doctor ordered for equities, which came into November riding a three-month losing streak.

As long-end yields and the dollar beat a hasty retreat, financial conditions eased and equities surged, thereby easing financial conditions even further.

“Not surprisingly then, US equities options-selling strategies have seen performance re-accelerate,” McElligott went on.

Put-selling is the winner, and in a repeat of June’s melt-up zeitgeist, call-sellers faced the unpalatable reality of spot careening up through overwriter short strikes. “At least overwriters have the underlying on,” Charlie noted, dryly.

So, what’s next? Well, some of the under-positioning which contributed to this month’s “everything ripper” (as McElligott put it) is obviously cleaner now. That’s less “fuel,” I suppose.

Still, one has to assume that as long as volatility stays subdued, exposure can be dialed up further. To employ Charlie’s trademark phrase, “Volatility is your exposure toggle.”