Team Groupthink's brilliant plan is to dump the historically unprecedented one-sided Trump trade ahead of next Friday's inauguration. What could go wrong?
Meanwhile, I noticed that since the New Year, the Nasdaq has resumed leadership from the Dow which it forfeited after the election. Below is what that looks like via the QQQ / Dow ratio. The circle from 2008 was wave 3 down at all degrees of trend for the S&P. Meaning rotation back to Facebook then collapse...
Doh !!!
Equal weight / cap weight S&P ratio confirms...
Furthermore, we need to track the Bond / Dividend stock ratio, so we know what time Fantasy Island is ending:
All sources of liquidity are being removed at the same time - gamblers are all in, bonds are rallying and USDJPY is rolling over with bond yields:
Before we go on about stocks, here is the Labor Market Conditions index 12 month moving average taking into account Friday's update.
Any questions?
Back to the casino...
The Trump rally was led by high beta stocks, which means we can expect a high beta mega crash.
Led by small banks
Big banks
As always, deflation is in full control...
Deflation (red) with banks:
And oil which got duly shellacked today...
Along with Exxon which got monkey hammered real good [sic]...
Breadth (Advances - declines) 50 dma:
But, the real problem for the Nasdaq is semiconductors...
Dow 20k or crash...
