Saturday, June 11, 2016

Mega Smash Crash On Deck

Markets say recession, EconoDunces say no recession. Really, who do you trust? 

Short-covering is a necessary and sufficient condition for final collapse...
The strongest sectors this week were small Caps (red), due to short-covering and Consumer staples (black), due to momentum/"Defensive" rotation aka. dumb beta:

We've seen this movie before: Short-covering prior to collapse
Russell (small cap) / Dow ratio:

At the end of the week, breadth utterly collapsed to the January lows of the year, as market momentum rolled over HARD...

The leading sector

P/E ratio for consumer staples
Momentum cereal stocks aka Dumb beta, is the last bubble...


It's all up to HFT now, because there are no buyers below this fabrication...

Treasury yields
Global trade
Global growth
U.S. deflation
Corporate profits
Defensive rotation

All screaming recession...Gene Epstein & Co. screaming bullshit...

"Forget May's report and April's report and March and January..."