If you thought the frenzied, panicked selloff into abysmal liquidity would end when the stock market plunged into the close, tumbling 2.71% and officially ending the longest bear market in history when the S&P dropped over 20% from its Sept 20 all time highs... you were wrong, because while stocks closed at 1pm, bonds are still open (until 2pm), and just after 1:24pm, the 2Y Treasury yield flash crashed (as prices Flash Smashed).

What caused this latest algo-driven market freakout? It certainly wasn't today's poor 2Y auction which saw the lowest bid-to-cover since December 2008 and a nearly 2bps tail.

The most likely culprit is what we discussed just yesterday when we noted that the short squeeze observed by Jeff Gundlach has yet to materialize, and not just at the long end, where net specs have never been shorter...

... but also the short end, where 2Y treasury net specs have rarely been shorter.

With stock markets in freefall, record low liquidity across all asset classes, and yields sliding all day, it was only a question of "max pain" before yet another big short was stopped out and threw in the towel, capitulating and covering their position at any price which appears to be precisely what happened with the 2Y Treasury.

Expect many more fireworks as more TSY shorts across the curve follow suit.