It's Been An Amazing Ride To Nowhere

Feb. 1, 2018:
Ameritrade CEO: There Is An Enormous Amount Of Retail Money Coming Into The Market


"It's been an amazing ride"

Any questions?

Way back in Y2K, the Nasdaq capped off an amazing 14 month run with a parabolic blow-off top into early 2000. Then it vertical imploded, but rallied back for one more lower high in March 2000 before final imploding. Ah yes, good times...

Deja Vu 2018:
Of course, the gamblers driving the last leg of this rally were in kindergarten during Y2K, which is why they have not the slightest clue how this ends. And Zerohedge is taking the year off to look for missing UFOs, so they're of no help. 

In other words, all of BTFD went into Internet stocks:

Rewind one month to the top in the S&P 500:

"The rise in investments is fueled by the cryptocurrency and cannabis sectors"

In January, the e-trader saw an average of 975,000 trades per day. TD Ameritrade recently beat fourth-quarter earnings and had 726,000 average daily trades during the same period, a 49 percent increase year over year"

I'm not an expert in math, but if 726,000 is a 50% increase through December, then 975,000 is a 100% increase through January according to my calculator. 

And so here we are in March, post-correction. Witnessing the resurrection of Go Daddy to all time highs. 

In other words, were it not for the relentless bid for junk everything, by a generation that has never seen a stock market decline, this shit show would have ended a long time ago. 

First off, Crypto and cannabis are so yesterday, I'm not even going to show Bitcoin again, so here are pot stocks.

This is where it gets interesting:

Back to Feb. 1:

"Hockey admitted it is beginning to feel a bit "frothy...But millennials seem to be the least concerned...First-time clients under age 35 jumped 72 percent during the fourth quarter compared with the same time last year, most notably in the tech sector.

I think we all see where I'm going with this: I'm giving the geriatrics the night off - while giving GenX the lifetime off from anything of consequence beyond high fiving in the sports bar. I'm focusing on generation YOLO whom I know and love dearly, since mine own are part of this herd. 

Beyond spent crypto and pot stocks, what else is keeping GoDaddy company on the new weekly highs list? Here we see that the two FANG stocks that actually make real money are down since the Feb. 1 high, whereas the two junkiest stocks are up. Netflix being the junkiest of the four:

"The rise in volatility has also made people more aware of the possibility for large-scale gains, attracting once-skeptical investors who may have sat out of the nine-year bull market"

Back in 2000 Warren Buffett decried the lack of value in the market. He said he doesn't invest in tech because he doesn't trust tech fads. This past week, Warren Buffett decried the lack of value in the market. He said he's been buying Apple hand over fist though, because ten years from inception he finally gets the dumbphone now that sales are at a two year low.

He also said that bonds are much riskier than stocks

In other words, the adults have left the building

As long as Go Daddy doesn't roll over, this will all be fine...

"It's been an amazing ride"

The Supply Side Doctrine Of Shock

The Boomers have jointly agreed that this will only implode on their children, so this can't be ending now...

My mistake throughout the past ten years was continually underestimating how willfully ignorant this society would become over the course of the post-Lehman Shock Doctrine cycle. Mass delusion reigns supreme because the lamestream media must spoon feed the old age home their daily dose of pablum to contradict everything going on in reality. They can't admit that it's over, so they just pretend that it's not. It won't work...

As of this week, all of the bubbles have now burst - including big cap tech - there is no global leadership anymore. Not in the casino. Not in politics. Not in economics. 

Any questions?

We're a society captured by the past. That's what Trumptopia represents - the forcible return to the grandeur of America's past. Except, MAGA is the equivalent of Stephen King's Pet Sematary - you bury your dead dog and it comes back as a rabid Frankenmonster. In other words, we've turned into Japan - an aging Idiocracy caught in a deflationary trap of its own making, recycling the same failed ideas over and over again. Each time expecting a different result. Surplus capital chasing its own tail, inventing fantasy narratives along the way. 

(Un)fortunately, the world as a whole can't be Japan, due to zero sum trade and capital flows. In order for one country to be a net exporter another has to be a net importer. In the case of Globalization, the developed nations generally import goods and capital. While the developing nations export goods and capital. It's the exact opposite of what should have occurred to raise global standards of living - wealthy nations should have been lending to poorer nations, not the other way around. Bernankenstein called this exploitation-based phenomenon "the global savings glut" - wage slaves trying to plink their way up the socioeconomic ladder one delusional rung at a time. Wholly unaware that they are drowning in a vast ocean of ever-expanding poverty-induced deflation. 

Yet, in order to continue in the mercantilist ways of its past, Japan found a way around this "system" by continuously debasing their currency on a scale no other country has ever attempted. The global cycle telegraphs its own end, when the Yen strengthens, indicating there are no more takers for global hot money. It's at that point that ironically the country that has done the most to weaken its currency, then has the strongest currency. 

Because there is nowhere left to hide.

Going into 2018, Wall Street raised their price targets massively. It was all going swimmingly well through January, as global stock markets levitated vertically. Wall Street's narratives for a robust 2018 were fully intact:

January 24th, 2018:

When the correction came, it inconveniently wiped out five months of gains, possibly putting the 2018 narrative into question. But since there was no audience for a changed narrative, there was no call to re-calibrate. Not for the fact that the economy is now weakening. The Fed is becoming more aggressive. ALL global Central banks are now tightening. Bonds are getting monkey hammered. The global carry trade is reversing. Trump is pursuing bilateral and multilateral global trade wars.

In summary, liquidity is the lowest since the 2008 Financial Crisis. 

No need to recalibrate because the stock market is still off to the same start it had 31 years ago, in 1987. Or for that matter the end of 2007...

It's the IQ test for stunned dunces:

How does this end?

Global Reflation Was A Hoax

Foisted on denialistic morons, reality TV presidents, global EconoDunces, Larry Kudlow, CNBS mannekins, and Central Bank money printers. By themselves of course. Human history's biggest circle jerk. BTFD zombies are going to learn that unquestioningly buying every overnight dip isn't necessarily the best idea...

Short volatility bubble
Global reflation bubble
Short Treasury bubble
Yen carry trade bubble
Oil/Energy bubble
Netflix bubble
Dumb money bubble

My epiphany on Monday of this week was that only trendlines matter to Skynet. Subsequently, ALL of the retracement rally trendlines broke this week: the S&P, Nasdaq, Europe, Emerging Markets, Oil etc. etc. The mega cap Dow was hit hardest this week. Down -6% straight to its two year trendline (not shown), prior to bouncing Friday afternoon.

Nevertheless, it wasn't only the Dow that reached the two year trendline.

The final trendline is now in play, with a 35 point margin of error. Which is what the S&P lost three days in a row this week...

Looking at February as a whole, based on Netflix and the Nasdaq 100, one would think literally nothing happened during the past month. Quite the contrary, February was the month that global fake reflation died of higher interest rates. You know, just like the last time. But don't tell anyone, because it's still a secret...

Europe ended the week FUGLY, taking out key support:

Same with Japan:

Within the U.S., this was the week that Treasury bond yields chose economic reality over Fed bullshit. And the Yen carry trade got hit with the ugly stick...

Sorry to Gundlach and Gross, but we can check the short Treasury bubble off the list.

Which of course portends badly for stock market liquidity. Now that cash is yielding more than the S&P 500:

Large banks are tracking the stock/bond ratio:

  

This is the past month in oil

Check that bubble off the list as well...

Emerging Markets. Check.

S&P 500

Going Down With The Clown

The RepubliCon party is welded to their dumbfuck-in-chief...

It's full speed ahead

Trump's tariffs make a lot of sense - thirty years ago. Now, all they will do is hasten the wholly unexpected demise of this globalized ponzi scheme. What a wise man does at the beginning, the fool does at the end. It was only a matter of time before the U.S. elected a full retard as president...

Any questions?

The global selloff continues round the clock, stopping only long enough for U.S. morning dip buyers to pick up more Amazon...

Exactly four weeks ago today:

The mega cap Dow is bearing the brunt of Trump's "easy" trade war, as gamblers rotate into small caps and domestically-focused companies.

Which is interesting because the domestic economy is getting weaker by the minute:

In other words, Friday short-covering in everything that has already been imploding year-to-date:

Hiding in small caps at the end of the cycle won't work of course. Don't ask me how I know...

Contrary to popular belief, global trade wars are not "reflationary"...

Denial Is Not A River In Egypt

It's extremely fitting that the most denialistic society in human history would get punk'd by their dedicated worship of ignorance...

This entire farce is hanging by a handful of overowned, overbought, and overvalued big cap tech companies. Four to be exact: Amazon, Netflix, Microsoft and Apple. There is no sign of fear, anxiety, or concern. Just another opportunity to buy Amazon...

Bueller?

First, the rest of the world is already in position for mega crash:

Within the U.S. as I showed earlier, the cyclical reflation trade is going straight down 2014:

The last part of the fake reflation trade to roll over were banks, which broke the 50 day today. Deja vu of early 2016:

U.S. Large caps are rolling over hard:

Even Amazon is rolling over

The iPhoney era is ending.

Any questions?

The Usual Bagholders. Have Passed Wind At Their Backs

Mankind's capacity to con other men is unlimited. I can't speak for women...

"U.S. equity investors have the wind at their backs" 

- Warren Buffett, February 2018

It's abundantly clear that 99.99% of people don't understand the stock market and the economy. Especially the dunces on Wall Street. Last year, the S&P 500 blew far beyond all of Wall Street's end of year price targets. So, what did they do this year?  They all massively raised their price targets. If they had any fucking brain, they would have all lowered them...

Today, the global fake reflation trade got smoked by Forrest Trump. As if it needed any help, as it was already rolling over. The news breaks with the cycle. Every multinational on the planet will now be scrutinized for their exposure to trade retaliation. The Dow's biggest loser today was Boeing. Which happened to be the Dow's biggest gainer for the past year. Steel stocks which have the market cap of a gumball machine, rallied.

Never fear, there's so much horse shit in here, there has to be a pony somewhere:

I think we all see where I'm going with this:
 S&P 500 profit estimates at the end of the cycle have the veracity of a Magic 8 ball. Forward profit estimates are right now turning back into a pumpkin:

People confuse price with value. As I always say, just because someone paid a million dollars for a brick, doesn't make it worth a million dollars. We've been taught from birth to believe that price and value are synonymous - A high price car is a better car than a low priced car. In a highly efficient well-supplied market that can be true, however, in a market with finite supply, people will generally always overpay. Because they confuse price with value. Which is why people overbid in auctions.  

But for stocks, the story gets far worse, because "value" is determined by the earnings yield (E/P) - how much profit am I getting for each dollar I pay for a stock. As I said above, at the end of the cycle, the earnings yield has less and less reliability. 

At the end of the cycle, the usual bagholders are left holding a big bag of nothing.

Getting back to today's casino - checking the market at any point of the day other than the last minute, has been totally pointless. As I write mid-day Thursday, the casino has gone nowhere for a week. Last Thursday, I wrote that bulls were defending the tax cut Maginot Line. Here they are again. In the meantime, the 50 day was tested from both sides. And the trend-line has been decisively broken:

Last week I said that oil was providing critical support to the casino. This week, oil is down -7%, providing critical weakness:

Getting back to historical analogies, from the deflationary cycle standpoint, this is similar to 2014:

I see, it's all coming back to me, said the blind man as he pissed into the wind

On the other hand, this is not 2014

This is the time when ALL forward happy time predictions turn back into pumpkins. And all of the usual bagholders say in unison:

"Aw fuck, not this again!!!"

And all of the car-salesmen-turned-investment-advisors, say, "whoops we fucked you over again".

Our bad.