Skynet took the day off, again. Afraid of what's coming...
Recall, that the first half of this reflation rally was predicated upon U.S. reflation. The Fed was the only Central Bank in tightening mode, so when the election was over a tsunami of capital entered the U.S. That's when the U.S. reflation rally peaked. From that point forward, U.S. reflation receded and capital flowed back out to the rest of the world. Conveniently, having been in EXTREME easing mode since early 2016, global Central Banks sensed the fake reflation they themselves had fabricated, mistakenly believed it was economic reflation, and jumped on the tightening bandwagon.
Now that fantasy is ending.
Which completes the a-b-c retracement:
The dollar is exactly back to where it rallied in 2016 and could very well be poised for a RISK OFF rally that implodes EM, commodities, speculative junk, and anything else that isn't bolted down to 0%...
"You MUST get in now, because interest rates will never be lower"
"Tech has been an outperformer this year. Global has been an outperformer this year. Chinese tech stocks combine those two themes," said David Russell, senior manager at online broker E-Trade."
Tech and Emerging Markets, two things that implode great together...
The casino took the day off again.
Skynet is afraid of what comes next...
