Friday, April 7, 2017

This Week In Mega Collapse: "Hallelujah, I Believe !!!"

"I don't know anything about this reality thing, but seven come eleven on Donny Trump and the God of Ignorance..."

Work backwards from today:

Fed head Bill Dudley hawkishly clarified that the Fed will simultaneously increase rates AND unwind the balance sheet - double tightening

Today's jobs reports came in 160,000 jobs lower than Wednesday's ADP report, corroborating this week's ISM report indicating the slowest jobs growth since last August

Stymied by his own Party, Trump initiated a new Keynesian stimulus program called "bomb Haji". Raytheon jumped 5% on the news

The Atlanta Fed slashed their First Quarter GDP estimate by 50% in one week from 1.2% to .6%

Suddenly, both tax reform and healthcare reform are dead

U.S. Oil inventories hit a new record high this week amid talk that Saudi Arabia is looking to begin another global price war 

The Nasdaq peaked on Wednesday of this week, one month after the S&P peaked, which is the same pattern that occurred at the top in 2007

We learned that the smart money is record short and the dumb money is record long

U.S. Coal companies asked Trump NOT to renege on the Paris Climate Treaty because they will be shut out of global markets. Doh!

U.S. households now have almost the same amount of debt they had in 2008

Now, for the chart porn:

Nasdaq 100 Mega Crash chart

ZERO. I said 0, new mega cap highs today:

Why? Because Amazon has rolled over, deja vu of every other market implosion:

Long wick on today's daily key reversal? 



10 Year Yield
After the jobs report, the 10 year yield was all set to wipe out the remaining bond shorts, but then Bill Dudley spoke and forced short covering back the other way towards "reflation"...

For today that is...because next week it will sink in that the Fed itself is the biggest factor deflating the economy: jobs, GDP, loan growth, autos, retail, that stuff...

In other words, today just drove a bigger drop in correlation between long and short-term rates:

Speaking of market tops, here is TRIN - selling pressure:

Change of plans?