"There is no means of avoiding the final collapse of a boom brought about by credit expansion"
- Ludwig Von Mises
What we are witnessing is the end-of-cycle rush into risk due to the fabricated belief that the economic cycle has been extended.
"many traders still had legacy shorts/underweights in 'deep cyclicals' (energy +2.5% and materials +1.5%) which are seeing violent squeeze...Crude is “the straw that stirs the drink” -> Higher Crude = Higher “Inflation Expectations” = Long Equities"
When the VIX broke down through the February breakout level, that signalled the "all clear" to gamblers. Meaning the buying of risk signalled more buying of risk. Per the axiom of circular Ponzi logic.
The reach for junk is going terminally vertical:
"Crude is “the straw that stirs the drink” -> Higher Crude = Higher “Inflation Expectations” = Long Equities"
Bueller?
Be that as it may, the retail short squeeze has ended.
In summary, the most widely watched triangle in history had to break out to the upside to trap the over-zealous bears, before it reverses lower to trap everyone else
Isn't there anyone who can warn these people?
Damocles' Sword awaits
