The just ended "most important week of the year for the world economy", was a week of epic hubris: make-believe nuclear deals, raising interest rates, inciting global trade wars, jamming IPOs out the door. All while Emerging Markets imploded in real-time. Fortunately Netflix and Go Daddy were ready safe havens, since the real safe havens no longer exist. Next week could be more interesting....
This week can be summarized thusly via the chart below:
Emerging market credit (local currency) is perched at the post-election stick save level. Meaning that Trump has crashed Emerging Markets twice - the first time just by being Trump. The second via tax cuts and tariffs. The intervening period was the global synchronized con job. The Nasdaq meanwhile is off in imagined realities land, deja vu of late 2015. The smart money (lower pane), is not betting on another con job. Because really, isn't one enough?
To complete the circuit, the Fed just raised rates deja vu of late 2015:
In $USD of course, the stick save failed this week. A function of EM currencies getting doubled teamed by Trump and the Fed. In dollar terms, it's already 2016 deja vu.
But what happened to implode EM currencies?
CNBC: What's Wrong With Emerging Markets
"I think everything started in mid-April, with the IMF meeting. Everyone went there with one theme in mind — synchronized global growth which would work with rising rates in the U.S."
But then, global synchronized growth turned out to be a global synchronized con job. Which means that threats of further Fed rate hikes were not going to "work".
In summary, it was the day that International sweatshop workers shrugged, while global capitalism bet the farm on Forrest Trump and Go Daddy...
"Trade wars are good, and easy to win"
- Donny Chump
I think we all see where I'm going with this...The Manchurian-Candidate-in-chief has picked up some bad ideas along the way. He's learned from the worst...
The signature of the loud mouth buffoon who knows everything by knowing nothing, is the relentless attack, preferably personal. It's the Faux News formula. They have no defense for their massive lies, so they have to be on the attack constantly. Obfuscation is the means by which they muddy the waters to sow mass confusion. In the event, they have mentally exhausted their dementia-ridden base. Who are continuously told that 2+2=5.
Energy will have to be great again next cycle...
Rule #1: Never go full Donny
But the week wouldn't be complete without a two day 30% vertical ramp in this year's biggest Tech IPO, DropBox, on no news whatsoever. Just to keep the Wall Street pump and dump primed:
Doji on the weekly. At best for the bulls, indicates indecision. At worst indicates imminent reversal of fortune.
This has been my longest standing count ever. Unfortunately, not due to skill as we know, solely because it has taken 3 months to almost recover the March high. For this count to be right, this count has to be right, now. Meaning further rally invalidates this fractal.
And if it IS right, it's game over, man: