Speaking of which, the best Camacho tweet of 2018, was by far:
Astonished, because one year ago, I read this headline, also in January:
"This is the best start to a year since last year"
"I'm ALL IN, bro"
But, to what does the world owe this latest RISK ON rally?
Fake-believe trade talks that concluded sans resolution this week. What else?
"While Chinese goods going to the U.S. initially held up in the face of higher tariffs due to so-called front-loading, their value slumped in the final quarter of 2018"
“The hard work of addressing structural issues to create a level playing field in China do not appear to have been resolved...we do not see the U.S. fully removing the specter of tariff hikes any time soon.”
You can't make this shit up:
On the topic of re-coupling, I've noticed lately that EM currencies have been rallying hard since September 2018 in an unusual divergence from oil. EM currencies peaked before oil and are re-converging at levels reminiscent of 2015:
The rally in EM currencies sponsored a nice three wave retracement in EM stocks which had begun "correcting" one year ago.
I overlaid with the NYSE Composite (gray) to show the nature of re-coupling:
Getting back to the land of delusion, here is another chart chock full of warnings in broad daylight. Transports are supposed to confirm a strong economy. Alas they do not. In fact the 2018 Dow Theory Signal has now been definitively broken.
Which will be followed by a 100% correlated decline at the same time.
"The government shutdown hasn't completely stopped the flow of stunningly bad housing data."
Homebuilders are wrapping up a three wave short-covering rally, wholly diverged from reality:
Industrials: Also never confirmed the September top:
A longer-term view on Transports
Warning this is the end of the cycle. Again:
Dec. 31st, 2018:
"2018 will be remembered for its extreme volatility"
That's not volatility, THIS is volatility...