I was reading this and ruminating on its assertions...
ZH: Since 2014 Central Bank BTFD Broke Volatility
The operating assumption of the above article and those who adhere to the Central Bank "put" hypothesis, is that every dip should get bought, because there will never be another RISK OFF period lasting more than :5 minutes ever again. I challenge that hypothesis.
One can make the case that the interim accumulation of unhedged risk exposure has built up to an extent that stock ownership is now a binary risk event. We got a taste of that just last week.
A week ago during the tax cut melt-up, big cap tech lost its bid amid a mini flash crash. The Nasdaq 100 has yet to recover those losses, while the S&P went on to a new tax cut high. Since the weekend passage of the Senate tax bill there's been a nascent rotation from cyclicals back to tech. When that rotation ends, we'll see how these overowned bricks trade again...
Meanwhile, ever since last week's mini crash, liquidity has been hugging the baseline as Skynet is wondering why everyone went to play with Bitcoin...
The assumption is that BTFD can never fail.
Global gamblers will never panic again...
Breadth doesn't matter and volume will always be low.
Limit down futures is always a buying opportunity
Sector rotation can never fail
Bitcasino will go to infinity
This is not the end of the Ponzi super cycle
