Sunday, November 20, 2016

Bet It All On Clinton. I Mean Double Down On Trump...

Last year, the stock market rallied right up to December 31st i.e. Wall Street bonus. After that, the wheels came off the bus. Here we go again...

First, rewind two weeks:

Fast forward to now:

ZH: Nov. 20th, 2016
Bearish Deutsche Bank Sees Massive Rally Due To Trump
"For the past year, Deutsche Bank was one of the most stubbornly pessimistic banks. Then, overnight, everything changed for one reason: Donald Trump."

CNBC: Nov. 20, 2016
Bank America: The Trump Rally Will Carry Through Bonus Season. After That Who Cares What Happens

"We have an overlay of the post-election rally with the post-Brexit rally in the S&P and it is a pretty good fit,"

First, some background:

Google Trends, search term: "Dow Record High"

Secondly, current hedge fund disposition going into year-end:

Hedge funds blew the Hillary trade, so now they have to go massively long to catch up to the almighty Dow...

So let's take a look at who is blowing smoke up their own asses...

High dividend yield stocks led the year-end rally in 2015 (middle peak). Never mind that Trump hammered these stocks:

Internet stocks were also strong. Never mind that Trump shellacked these stocks as well:

And as far as comparing to Brexit, here are a few "divergences"...

Liquidity (Price / volume):

Rest of the World was bludgeoned by Trump, but who needs them?

Muni Bonds also monkey hammered. Minor detail...

Cash (out)flow:

In other words, the year-end "rally" 2016, will be led by banks, same as in 2008...

Epic short covering (S&P / Russell) with Yield: