Thursday, June 15, 2017

End Of Cycle Mega Crash. Base Case Scenario

Unfortunately, Forrest Trump is a sociopathic con man and always has been. I thought I would point that out, since there seems to be some ongoing disagreement on that topic. In any event, we will let history be the final arbiter and burial attendant.

The key takeaway from this post-2008 era is that sociopaths don't know another con man when they see one. Go figure...




Financials are "leading" today based upon yesterday's Alice In Wonderland Fed meeting. Meaning that deja vu of 2008, short-covering in the weakest sector is coming at the end of the cycle. Unfortunately, gamblers have been conned by exceptional bullshit...

Within financials, asset managers are outperforming this week:

Northern Trust:

Bueller?



Blackrock


This week also reminds me of August 2015 leading up to the Flash Crash. Tomorrow is Quad Witching options expiration. Opex preceded the August 2015 "event" as well:



Back in 2015, volatility exploded when the Nasdaq 100 took out its 50 day moving average (see above).

Skynet is doing everything possible to ensure that doesn't happen, but volume is heavy as gamblers head for the exits...




The Russell 2000 ending diagonal is performing as expected...



The Fed doesn't get it...



They've been hypnotized by Trump's never-ending stream of bullshit...



And gamblers have been too...



These two psychopaths work well together...



We already know what happens when Skynet encounters a herd of buffalo...

This will be a 2015 smash crash with a 2008 "surprise" ending...



Fake reflation = Central Bank levitated commodity prices with a transitory feed through to CPI and bond yields

In summary, the Fed is tightening based upon the dying embers of last year's PBOC easing. Now the Central Banks of the two largest economies are both tightening at the same time, at the end of the cycle:

ZH: The Global Credit Impulse Has Now Collapsed
"from peak to trough the deceleration in global credit growth is now approaching that during the global financial crisis"


You don't say...