The Fed's rate hike last December, with Financials:
"No one with their head up their ass saw that coming"
"Sell the news"
U.S. interest rates and Financials have peaked on or before every FOMC meeting in the past year:
And the Fed has successfully monkey hammered global markets twice, but who's counting?
Which gets us to tomorrow:
Last week, leading up to the ECB meeting on Thursday (circled, below), the VIX and the S&P rose at the same time. Which is unusual, but makes sense in the context of hedging prior to the meeting. Once the meeting ended, the correlation reverted to normal, stocks continued higher, the VIX sold off.
Fast forward, and now the same pattern is emerging, wherein they are rising in tandem. Which makes this set-up interesting. Picture, volatility exploding when the market is at an all time high.
Of course, that's only once scenario on the table. Post-FOMC tomorrow, both could continue higher. That seems the least likely to happen for any length of time. Or stocks could continue to melt-up in a blow-off mega top. Which is clearly what the bulltards are counting on. However, if in fact stocks rollover and the VIX continues higher, then we will see an Idiocracy hanging by the noose from an all time high, as the cost of hedging explodes out of reach.
Which is my base case scenario.
And what I've been saying for eight years straight while they were too busy wrapping the noose around their neck to listen.
My bad.
100% pure Ponzi circle jerk. Accept no substitutes.
Dow with investor cash balances:
