BTFD - "The Most Overbought Market Ever"
Today was yet another Hindenburg Omen - the eighth one since April 15th. This unprecedented cluster shows the unbelievably manic, fragmented, and overbought nature of this market...
As this linked chart shows, to have eight signals in a span of three months is unprecedented. Today, amazingly, even though the market was marginally higher, the number of new highs dropped significantly versus yesterday, even though yesterday was a distribution (down) day on the S&P.
New 52 week highs always peak well before the market rolls over...
Meanwhile, the chart below shows how extremely overbought the U.S. markets are at this juncture. This past nine month clustering of new highs has no comparison like it in the past 10 years. Also, as we see, each major top since 2007 has seen a divergence of new highs as indicated by the blue trend lines. The current divergence of market price which is going up v.s. new 52 week highs going down is chasmic - new highs have been trending down since last September, even though the S&P is now 200 points (13%) higher !!!
Graphical testament to the amount of money that Central Banks and HFT bots have pushed into the markets:
“Today is day 137 of the longest buying stampede I have seen in my entire 50-year career, and possibly in history. The previous record I have in my 50 years of notes ended at 53 trading sessions.BTFD - Buy the Fucking Depends.
The most amazing thing he says is that the prior record uptrend lasted 53 trading sessions yet he targeted July 19th for a top which amounts to 135 trading sessions...WTF? On top of that, he says he only expects a 10-15% intermediate term correction even though his prior record of overbought sessions was just more than doubled. Unbelievable. It's statements like that which make me insanely bearish. Every single dip is viewed as an opportunity to buy yet more stock. My advice to those on Wall Street is to be ready to buy the fucking Depends, not the dip, because this is going to be one of those "What the fuck just happened?" moments.
By making it totally unprofitable to hedge or short, Central Banks guaranteed that the day will come when everyone is reaching for protection at the same time, at which time the cost of hedging will be out of reach...Options volatility will be off the charts.
Living on Borrowed Time
Every other asset class on the planet with the exception of the Dow stalled out months and years ago at lower highs, so we are fully primed for a global sell-off. This will be a liquidity crisis on a scale no one has ever seen before since it's been building up for years now and almost no one expects it. All technical indicators of investor anxiety - put/call ratios, VIX, sentiment etc. are showing multi-year levels of complacency. To quote the Bank of International Settlements (BIS), just recently:
"The "borrowed time" central banks have created with ultra-low interest rates following the collapse of Lehman Brothers in 2008 has not been well used".Those words will resonate for a long time to come...
