Monday, April 4, 2016

Global Synchronized 3rd Wave. LIMIT Down

This is not the beginning of the bear market. This is the beginning of the end of the bear market. The capitulation phase...
While zombies were pretending that nothing was happening, all major sources of liquidity were systematically depleted. And all asset classes were pounded (except recession stocks). In this last leg down, everything gets synched to the downside at the same time, amidst zero liquidity...

These asset classes have already been pounded:

Carry trades
Global stocks
EM Currencies
Cyclical stocks 
Big Cap Tech
Growth/momentum stocks
Small Caps
Most shorted stocks
Junk Bonds
Leveraged loans

All major sources of liquidity have been depleted:
Central Banks
Momentum traders
Carry trades
Sovereign wealth funds

3x overvalued recession stocks are the last asset class to roll over...

"And then they learned that printing money to buy stocks wasn't the secret to effortless wealth. Because after all, who knew?"

Wilshire with Fed Funds rate and Fed balance sheet (green):