An uncontrolled China meltdown in real-time, Greece dismembered and sold on Ebay, a manic blow-off in investor sentiment, rolling global dislocations, a Third Wave count, ludicrous sector divergences, commodity collapse, slowing global growth, record margin debt, record global debt, mass complacency, oblivious leaders, rampant trading glitches.
All reaching critical mass this week. A global short-covering rally was the last step prior to Lehman liquidation. Check that off the list.
Buckle up. We are not owed any more warning.
This isn't a fucking mystery novel
The attention deficit blind men have inconveniently forgotten that the top for China in 2007, was the top for the U.S. "I wonder what's going to happen next. I'll call my adviser and ask him if I should buy more stocks..."
Six weeks beneath the trend line for the first time in 3 years.
"It was a bad time for a Centrally Planned short-covering rally"
But I just learned that Amazon AND Netflix hit new highs today - the two LEAST profitable companies in the S&P. You can't make this shit up.
Stair-stepping into the abyss
As usual at critical junctures, Prechter & Co. are losing their cajones and offering myriad ways the market can go higher lower sideways backwards and upside down.
So I thought I would clarify things for them a bit, because I don't shove my head up my own ass and then charge money for it.
S&P with Percent of stocks above 50 day moving average (red). The waves to the top are a total mess. The waves since the top are crystal clear, nested fractals - and the fact that the red line is trending down is the subtle clue that we're not going up anymore...
Speaking of nested fractals: Get busy living or get busy dying
UK FTSE
Chinese smalls caps (black) are rolling over again, and the Yen is still risk off. There are no more idiots left to lure into the casino.
One chart to rule them all: DEFLATION
The relentless theme throughout this entire charade has been deflation. It never blinked once.
Long-term Treasury yields
Anyone who had just used this above chart as a guide would have never been slightly tempted to buy into this charade in the first place.
PhD Econ-dunces can be conned over and over and over and over and over again forever. Never learning that this isn't Dungeons and Dragons and you can't make up your own outcome.
But not bond traders.
