Fortunately, Wall Street makes it easy for them, by pumping out disinformation constantly. Anyone who places their trust in Wall Street this time around will be obliterated...
Unlike the rest of Wall Street, John Hussman's blog is usually skeptical, so I consider it the "best" by Wall Street standards. Recently Hussman warns us that tops are not an 'event', they are a process. Then he highlights Y2K and 2007.
HALO Crashes are an event not a process
My hypothesis is a little different, because there has been NO topping process this time around. This market continues to attenuate ever-higher without any release of selling pressure. This market has an enormous amount of latent selling pressure just below it which has yet to be tested.
Here below we see that in Y2K and 2007, there were multiple pullbacks to the 50 week moving average prior to the main indices rolling over. This allowed selling pressure to be dissipated, hedges to be monetized (i.e. new capital drawn into the market), and another rally attempt higher. Whereas in this period, there are no hedges to monetize, this rally has lasted months longer, and each leg higher is progressively steeper with less pullback. Today's "topping pattern" bears no resemblance to prior tops. The S&P is currently 7.5% away from its 50 week moving average, so the question on the table is what would happen with that minimum size of a move, which gets us to the next chart...
One of these is not like the other
This is the S&P with its average stock price i.e. already diverging massively, unlike 2007. The support structure for this market has already been substantially weakened for months, so I highly doubt that a visit to the 50 week moving average is going to stop right there - and that after all, is the bet. No one from Wall Street is ever going to acknowledge that the outcome of this fiasco is going to obliterate Wall Street.
This is all a long way of saying that there will be no marginal buyer of sovereign Ponzi bonds when the carry trades unwind. Lehman x 25
Speaking of which, here are the carry currencies w/correlation vis-a-vis S&P
1997 Deja Vu
Emerging Markets Sovereign DebtWell into its failed bounce...
Municipal Bonds:
Reminding us what happens when a-b-c corrections end
Getting ahead on the Flash Crash curve, already...
Dow Mega-Wedge (weekly)
Today's SPY ETF volume was the lowest since Dec. 24th, however on an hourly basis it was actually 35% lower since Dec. 24 was a half trading day.
NO LIQUIDITY
