Thursday, February 27, 2014

BTFATH - Buy The Fucking All Time High (Again...and Again)

A graphic reminder of what happens when ponzi schemes implode. They collapse instantly and spectacularly, leaving faint remnants of their existence. $33 trillion in global stimulus and 520 interest rate cuts still haven't restored the jobs, median income levels, or economic activity from 2007. This has been the most expensive con job in human history, without any comparison...

A Fed-addicted market that only goes up due to bad economic data, will collapse with extreme dislocation. Today's greed-addled investors are oblivious to all risks.

Y2K Deja Vu
The S&P 500 made a new all time closing high today. The Nasdaq is at the highest level since Y2K, although nowhere near an all time high. The Dow is still well below its high from December 31st. Blue chips can't rally, but junk stocks are going parabolic. We've seen this movie before, we know how it ends...

The Almighty Dow
Broadening Top:
"In the broadening top formation five minor reversals are followed by a substantial decline."

"Houston, we have a fucking problem"
% of Stocks Above 50 DMA
The difference is that back then, the market had been declining for an entire year. Today, the market is at a new all time high. Lower pane is the same indicator smoothed by a 20 day moving average.

What could go wrong?

Another Massive Divergence
The Nasdaq is at a new multi-year high but the number of stocks making new highs is continually shrinking

"Look Ma, No Hedging"
Index Put/Call Index All time Low...

Fed policy has made it impossible to hedge. Low realized volatility has made options cheap yet ironically extremely unprofitable, as something cheap that expires worthless, is no consolation.

And shorting a vertical market is suicidal...

Choose the Delusion
The rest of the world's stock markets are thoroughly unimpressed by the amount of money being thrown down the shit hole by global thought dealers. After all, someone is going to have to pay for this chicanery, later or sooner...

Global Dow Still Well Below 2007
Some people just aren't that impressed by the whole "let's bankrupt the grandchildren" thing...

Follow the Money
As ZH points out daily, since early 2012, U.S. stocks have been 1:1 inversely correlated with the Japanese Yen via the carry trades sponsored by "Abenomics" aka. massive money printing. As we see below, the Japanese have been playing currency warfare vis-a-vis the dollar and selling their currency aggressively. So if this Elliot Wave count is correct (i.e. terminal), then world risk markets will be on the receiving end of an "aggressive unwinding".

Yen:Dollar (Inverted)

The Overwhelming Power of Greed: All Risks Ignored
Despite ever-increasing economic and geopolitical risks, the masses and Wall Street remain fully anesthetized

Remember: Nothing Matters Until it Collapses, so BTFATH...