Wednesday, January 31, 2018

The State Of The Reversal Of Fortune

The tax cut melt-up has lost its mojo...

The shelf-life of each overnight rally is getting shorter and shorter. At some point Skynet is going to figure out the trend is now down.

Any questions?






Skynet is working double overtime to keep this clown show from imploding, but the algos are not getting any help these days from gamblers. A key "feature" of the January melt-up was the daily overnight gap up open, with the casino closing on the highs. How better to force everyone and their dog to chase the market? The tail was wagging the dog, indeed. 


Nevertheless, starting last week, those gap opens were closing on the lows, or flat, like today.

Which is why Money Flow has rolled over:



In other words, there is no longer any momentum in Skynet's momentum ignition routine. The dog is now wagging the tail again. 

Here is why...
Below is the January melt-up which peaked last Friday. New highs - lows are in the lower pane:




Zooming out to the daily scale, gives us this view.

New highs - new lows are back to where they were two years ago in February 2016. And yet the casino is STILL record overbought:



The gift of overnight gaps is starting to go in reverse now as up gaps alternate with chasmic down gaps:











Given the precarious state of new highs, Amazon's key reversal today was not what Skynet needed...









Tuesday, January 30, 2018

The State of The Con Job. "Is Strong"

It took a year, but the Terminal Idiocracy finally bought up all of the bullshit...

Any questions?




Ponzi confidence is maxed out in stocks, oil, crypto currencies, short volatility, personal consumption and everywhere else casino capital can be thrown down the shit hole. Armed with the knowledge that it's the "best start to a year since 1987", and personal savings are the lowest since the start of the last recession, we can say with certainty the dedicated denialists won't see it coming. This will be the hardest crash landing...






ZH: Americans Never More Confident Of a Stock Market Increase

"We expect this to continue to rise vertically, forever"



Yesterday will be the last Hindenburg Omen, as new highs are imploding. Which triggers the Zuckerberg Omen - a handful of stocks making new highs, one of which is Faceplant.

As we see, this cycle is seeing the same pattern of Hindenburg Omens around the point of maximum BTFD, as in 2007:



Party like it's 1929:





The S&P 500 gained 6.5% in January, while the VIX gained 50%. We've never seen the noose tightening like that before...







"I will make pretending to be wealthy great again"













Reports from earlier this month suggest that not only will Apple be reducing production, the iPhone X could face “end of life” within a year of going on sale



It's the end of the iPhoney era





Any questions?







Monday, January 29, 2018

Denialation: The Problem That Fixes Itself

The problem with Donny's tax cut for Billy Gates, is that it's a tax cut for Billy Gates...

But as always, don't take my word for it:


"Big picture: Americans increased spending in the final three months of 2017 at the fastest pace in almost two years, reflecting an economy hitting its stride nearly nine years after the end of the last recession."

Actually, "hitting it's stride" exactly 10 years to the month since the last recession started.

Any questions?






Unfortunately, what we have is a society run by industry-captured used car salesmen, who are wholly incapable of telling the truth...



Remember Donny's proud third quarter 3% GDP figure, which inconveniently just turned back into a 2.6% fourth quarter pumpkin?

Well that was Hurricane Harvey and the broken window fallacy at work i.e. more GDP borrowed from the future:


"U.S. car sales fell 2017 for the first time since 2009.

But don't panic -- the dip was fairly modest and the industry is still in pretty good shape."




But then why does Dumbfuckistan not see this coming?

You had to ask...






You see, I had an epiphany over the weekend: Economists are like used car salesmen, in that they don't like to give out bad news. They are constantly selling optimism, because optimism itself is one of the key ingredients in an economic expansion.  

Which is why they are always more than willing to extrapolate insolvency into the indefinite future. And why ALL recessions are backdated.

Because no proven jackass sees them coming. Ever.









Entering Vertical Crash Mode

A handful of massively overbought mega caps are the last stocks holding up the casino...

All Ponzi schemes end when they run out of dumbfucks...

New lows are exploding on the NYSE...



Breadth is worst since August:



The iPhoney era is over:
Apple and its supplier "ecosystem" are getting pole axed as the number of people willing to pay $1,000+ for a dumbphone, has been tapped out:



"Apple shares are dropping Monday after a report that the company ordered a drastic cut in iPhone X production.

Nikkei reported Monday that the tech giant told its suppliers to reduce iPhone X production to 20 million units for the first quarter from the more than 40 million units target Apple gave in November"


A 50% haircut in the flagship product is a disaster for the world's largest company by market cap:



A handful of large caps still holding out, but otherwise, the broader tech sector is corrective off of the late November high:



China Tech is rolling over, volatility is rising:





Overnight risk is a tad high






New high, Goldman Sachs:

Who owns this joint anyways?







Sunday, January 28, 2018

Massively Leveraged To Bullshit

The Jedi Mind Trick for stunned dunces, is ending. Unfortunately there's no way out of this con job for stoned gamblers. RISK OFF, is no longer an option...

"It's the new permanent plateau"




This aging Idiocracy traded jobs and industries for "markets": Return on capital overwhelmingly favoured over return on labour. What they apparently don't know, is that in the absence of revenue, historically inflated profit margins no longer function as expected. What they also clearly don't know is that when everyone is on the same side of the trade, "markets" no longer function as expected. In summary, what we've learned since 2008 is that an Idiocracy doesn't learn...

This week we were informed that Caterpillar reported profits and revenue that "handily" beat Wall Street's expectations. As it turns out December 2017's quarterly revenue of $12.9 billion was the exact same as it was in December 2008. Yes, you read that right. Meaning that all of the stock gains in the past 10 years were compliments of stock buybacks. Stock buyback alchemy has been the primary driver of stock market gains since 2008, funded of course by mass layoffs.

As we see from commodities, global "reflation" is an asinine farce, believed by 7.5 billion zombies. Ironically, they were conned by their own self-destructing alchemy. Globalization was only ever a recipe for self-destruction.

"The secret to global recovery is mass layoffs"




And we can thank global central banks for sponsoring this massive con job, which they are unfortunately now unwinding post haste. They are taking full advantage of the sheeple's relentless late stage manic reach for risk, to take down liquidity:

ZH: Bonds Get It. Stocks Don't. Yet

" the ongoing decline in CB assets is starting to have an adverse impact on investment grade spreads which have been pushing wider in recent days

stocks have - for now - de-correlated from central bank balance sheet"

It's as if the entire world is expecting a tax cut. 




But instead, they're about to get a haircut. 

And no, they don't see it coming.

Why? Because the Central Bank low volatility Jedi Mind trick meant that for the first time in stock market history, breadth deterioration was not "priced in" ahead of the market decline:





"recent retail capitulation which has seen retail investors unleashed across stock markets, buying at a pace not seen since just before both the 1987 and 2008 crash, helps explain why stocks have - for now - de-correlated from central bank balance sheets"

if the Citi correlation extrapolation is accurate, and historically it has been, it would imply that by mid-2019, equities are facing a nearly 50% drop to keep up with central bank asset shrinkage"

Global stocks (light blue). Combined CB assets (dark blue):






"It's called Ponzi reflation. You wouldn't understand it"





Saturday, January 27, 2018

Voodoo Economics. Indeed.

Davos 2018:

Any questions?



How do you con the same sheeple over and over again? First you dumb them down. Second, there is no second step...




It's called 'Voodoo Economics' for a reason - you have to be a mindless zombie to believe in it. In other words it fits this brain dead society to a "T". Forty years of brain washing later, and there's not a brain cell between them.

What happened, is that Republicans wanted a dumbed down base which would reliably vote against their own economic interests every time. And they got it in spades - a dumbed down base. But now their Frankenmonster is off the leash wreaking havoc and voting for Trump, so forth and so on. But don't take my word for it - from the NeoCon man himself: (No, I didn't read the article, since I don't get between dueling dumbfucks...)




The RepubliCon tax cut has led to a global blow-off top in manic risk-seeking. Unbeknownst to zombies, most bubbles have already popped, with a couple notable exceptions...

Here is what has already pumped and is now dumping:

First off, contrary to the continuous assertions of copious Madoff acolytes, the global crypto bubble has popped. They thought there would be more dumbfucks to follow, but there weren't unfortunately...



"We seek the safety of crypto currency"




The real estate bubble has imploded as well, the victim of rising interest rates:




The dollar carry trade bubble is over. Yet another firm rejection of voodoo economics. Yields are hanging tight to see what Donny says about infrastructure on Tuesday. Then they'll implode as well. In other words, one of these is right, the other one is hanging on copious bullshit. For now...



"Trump's latest remarks about the dollar diverge from his past comments. Last April, Trump said he was worried the dollar was "getting too strong."

"I misinterpreted me"




The short volatility bubble has imploded. Although the Chinese internet bubble is still parabolic:




The fake reflation bubble hit the brick wall of imagined reality this week.


Yes, again:




Which is why the Transports bubble is rolling over




The crude oil bubble went further parabolic this week, but it's only a matter of time before that implodes limit down:




The Biotech bubble went vertical this week, and we already know how bullish that is:




Speaking of vertical Chinese Tech stocks, the Hang Seng hasn't been this overbought since, well, you know...





Here is where it gets interesting, because option skew crashed this week:

Meaning that investor protection is at the pre-Flash Crash low of August 2015:




As long as Netflix doesn't implode, this should all be fine: