This week Tom DeMark reaffirmed that the Dow will not hit 20,000 in this rally. We also learned that the lowest quality junk stocks are now leading the rally. The U.S. dollar got shellacked to a one month low. The Dow brushed 20,000 thanks to a weak jobs report. Retail stocks got massacred on news that ex-Amazon sales are imploding. Oil had a bad week on heavy volume. Record two-way Chinese Yuan volatility continued for the second week. The Malaysian Ringgit hit the lowest level since the Asian Financial crisis. The Mexican Peso crashed to a new all time low. The British pound got hammered to a new multi-decade low on 'hard Brexit' fears. We learned that China's 2016 exports dropped the most since 2009, down 7.7% year over year. Meanwhile, China threatened "Big Sticks" if Trump starts a trade war. Trump's State Dept. pick, Exxon's Tillerson shot back that China should be barred from the South China Sea. China's media went batshit. We learned that Trump is actually the Manchurian Candidate installed by the Russians. On behalf of every Latin American on the planet, the former Mexican President told Trump they're not paying for "the fucken wall". The President-elect staged a "Barnum-esque" goat rodeo which caused the reflation trade to unwind in size across global bonds and currencies, while being ignored as usual by the casino.
Amid all of that chicanery, the most speculative U.S. index, the Nasdaq made a new all time high. What else?
The reversing reflation trade was felt most heavily in the rotation between dividend stocks and bonds
XLP/TLT ratio:
The Nasdaq/Dow crash ratio:
Goldman Sachs aka. "the Dow"
The long-term TRIN
Measures selling intensity
Short-term TRIN:
"Who is selling?"
Arguably this should be the top chart
I just updated the latest short positions on 10 year U.S. treasury bonds, which rose further this past week:
Oil
Short-term charts
Shanghai Composite:
USDJPY
Hedging. Or not...
