Today's updates:
Hence, it should come as no surprise that the Icarus rally is running out of fumes. But we know that it will come as complete surprise to the de facto Idiocracy...
Any questions?
"The Idiocracy never saw it coming"
Here was a 100% prescient prediction from January of this year...
ZH: BofA Warns Of Icarus Meltup to Meltdown
The current rally started in Feb 2016 with...
bearish Positioning (BofAML Bull & Bear indicator = 0, cash = 5.6%, underweights in Emerging Markets & energy)
excessively bearish Profits
and Policy impotence ("Quantitative Failure").
Thus the rally is likely to end with...
bullish Positioning (BB indicator = 8, cash = 4%, unambiguous long positions in stocks, Japan & banks)
excessively bullish Profit expectations
and Policy hawkishness (Fed jacks up short end of yield curve, ECB tapers).
Fast forward to today, mutual cash balances hover near all time lows (3.3%). Emerging Markets have seen their biggest rally and biggest inflows since 2009. Japan is having its longest rally ever. Banks closed at decade highs last week. The Fed has been jacking up the short-end of the yield curve since the election.
And this week the ECB is planning to announce its taper:
"LONDON, Oct 24 (Reuters) - The European Central Bank is likely to decide the fate of its 2.3 trillion euro stimulus scheme on Thursday in one of the ECB’s most keenly anticipated policy meetings for months."
Excessively bullish profit expectations visualized:
Banks
Breadth momentum
"What do you mean there's no World War III?"
