Speaking of denial, gamblers took it as great news last Friday that the Fed finally mentioned their balance sheet with respect to recent market volatility. The fact that Powell denied any relationship between the two is a minor detail:
"We don't believe that our issuance is an important part of the story of the market turbulence that began in the fourth quarter of last year"
In other words, they expanded the balance sheet by over $4 trillion over the course of six years in order to support risk assets, but shrinking the balance sheet has no impact on markets. Holy fuck. With logic like that, who needs enemies?
To date, the Fed has rolled off ~$450 billion. In 2019 they are set to roll off an additional $600 billion ($50 billion/month).
IQ Test for stoned zombies (see below): Will volatility rise or fall over the course of 2019?
Bet everything accordingly.
The Fed expanded their balance sheet rolloff to the full run rate of $50 billion/month in October. When did U.S. stocks peak?
By the way, the NYSE is now decade overbought.
Also deja vu of 2016, the U.S. oil market has corrected in a three wave retracement: