Wednesday, September 30, 2015

The Fastest Price Collapse Since 1929

ZH: Sept. 30, 2015
"The Dow Industrials have now fallen for 3 straight quarters - the first time since Lehman, and only the 2nd time since 1978."

Monthly momentum (MACD) deceleration shows that the decline from this peak is occurring 3x faster than 2000 and 2x faster than 2007:

The relative strength indicator peaked over TWO YEARS AGO:
"Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent losses"

Skynet is defending the August low at all costs:
5 waves down, 3 waves up: weekly, daily, hourly...

Where have we seen that before?
Nasdaq 100:

Overnight risk.

Damocles' Sword Hangs Over S&P On The Ropes

The Yen (Dollar) has been clinging to the 120 level at all costs. A break below the two month range would be the last nail in the coffin...

"Risk-averse investors are becoming the nemesis of Japanese Prime Minister Shinzo Abe."

"The yen is the best-performing major currency this quarter...Options suggest there’s an almost even chance of a gain to 115 per dollar by Dec. 31"

“The BOJ is approaching the limit in doing quantitative easing and so is expected to reserve its powder for a more serious market rout in the future.”

The S&P (red) is clinging to the August lows:
Short-term, a critical divergence has emerged between the S&P 500 (red) and the Yen. Yen (Dollar) strength has prevented full fledged S&P meltdown...

Aussie / Yen (red) confirms the S&P: 

To summarize, Aussie / Yen and S&P are lower, while the Yen / dollar is clinging to critical support...

Yen/Dollar Long-term: "Damocles' Sword"

...All while carry traders unwind their Yen shorts in size...
With Emerging Market Debt and Emerging Market currencies at multi-year lows:

I will go out on a limb and say that a "successful retest" of the August lows wouldn't look like this...
(Blue arrow shows August weekly low)

Tuesday, September 29, 2015

The Idiocracy Is Dumpster Diving Into The Abyss

While in the office today I noticed that all of the recyclable tin cans were in the garbage can which is right next to the recycling bin, which was empty. Are you fucking kidding me?

The Idiocracy likes to throw everything into the landfill, including themselves...

Growth/Value ratio

Nasdaq with internals

Wilshire 5000 count



Aussie All Ordinaries

Free-Basing Prozac

My religion is reality. We have no members

Non-believers are begging to be monkey hammered into fucking oblivion.

Time will tell who's right. Reality or reality skeptics.

Monday, September 28, 2015

Globalization Is Collapsing Amid Asinine Levels Of Hubris

"It can't happen to me"

Bulls enjoyed another high volume ground and pound today. The S&P broke the October 2014 weekly low (first chart below). Biotech was bludgeoned, on 6x normal volume, now down -28% from highs. Asinine hubris reigns supreme...

This just in:

"It's just a flesh wound"

Junk bonds are at post-Lehman crash levels...

This just in:

Emerging Markets and Oil Stocks New lows:

Selling Intensity

VIX Weekly:

Top performing S&P stock since 2009 (at its peak):
Now listed as a top 10 weakest stock within S&P

CNBC: Sept. 28, 2015
"JPMorgan: Buy into the Biotech Bear"

Sunday, September 27, 2015

Messianic Laziness: "Where Is Man?"

On one side we are confronted by infantile denialists who inform us that it's irresponsible not to ignore every problem. On the other side we have end-timers coming out with predictions so imminently dire as to make any efforts pointless. Carpe Diem all around...

I see a serious conflict of interest in both of these extreme scenarios. The easiest thing to (not) do is always nothing. And by sheer coincidence that seems to be the conclusion that is always reached, via "scientific means" of course. 

Denialism is abdication of responsibility. Every generation since the beginning of time confronted the fear that a meteor, plague, nuclear war or some other catastrophe could wipe them out at any minute. That didn't stop them from creating a future for their children.

One thing is 100% clear, nothing can get better until the Prozac-happy Terminal Idiocracy self-implodes, at the hands of their trusted psychopaths.

"Where is man?"

Getting a sex change and waiting for ISIS to drop-by.

MAXIMUM BEARISH: Mega Crash. Or Your Money Back.

The serial overnight ground and pound plus Flash Crash has been so much fun, that Bulltards are looking forward to more. Despite getting monkey hammered back two years on the Dow, six years at the *free money* casino has conditioned gamblers to Black swan dive into pavement, Shanghai style...

Sept. 27, 2015
Bull/Bear Winner Take All
"Tick tock. High stakes poker. In my mind the October 2014 lows need to be broken in the next 3 weeks or it’s game over for bears"

First I address his points, then we get to my charts:
Where to begin...

Disposable Humanity: Best Before 2016

The average human being is worth $2.50/day aka. 'Nothing'

"Which proves that Globalization is working..."
Bill Gates (2014):
"By almost any measure, the world is better than it has ever been"

To say that this is a garbage generation is an asinine understatement. Globalization has commodified everything, especially human beings who've become essentially vacuous, mindless consumption zombies. Obedient corporate bitches committed to bankrupting themselves. Whereas, the vast majority on this planet are merely nameless faceless factory slaves.

God created the earth. Then mankind threw it into the landfill.

And at the top of this Ponzi Scheme are Central Bank fabricated billionaires who make Bernie Madoff look like an amateur. Jet-setting from one art auction to the next, competing for who has the biggest mega-yacht. They have not even the slightest fucking clue what magnitude of thermonuclear economic implosion they've created.  

All because as long as someone else is suffering, failed economic models can go on "as long as it takes".

Genesis: "Then God called to man, and said to him, 'Where are you?'"

Hiding, as usual. 

BANANA REPUBLIC RISK: Liquidity Lower Than 2008

In the context of a clueless Fed worried about a future bubble in stocks, it's important to realize that current average liquidity is already Banana Republic quality. Lower than 2008, but '1' better than Lord of the Flies...

The average S&P stock (red) with interest rates (black):

This leg down is a Third Wave at all degrees of trend...I said that a week ago post-FOMC (point 'c'), and the S&P only lost 110 points (-5.5%). This time I mean it...

Junk bonds at four year lows...

Self-Interest Is Self-Imploding

Corporations opened up Pandora's box of Third World deflation so they could monetize poverty.  Now, uncontrolled deflation is flooding the entire developed world, featuring global interest rates at 500 year lows and a currency debasement race to the bottom. The clueless Chimps at the Fed turned deflation into 0% for gambling and stock buybacks, which shockingly hasn't fixed the economy...

The Fed's view on deflation: "All forward decks are now open for swimming"

BI: Sept. 24, 2015
"Have No Fear, The Titanic Is Well Anchored"
Having nothing better to do, I just read Janet Yellen's speech from Thursday evening regarding Monetary policy and "inflation dynamics". Suffice to say with logic like that, who needs enemies?

"In summary...I expect that inflation will return to 2 percent over the next few years as the temporary factors that are currently weighing [down] inflation wane, provided that economic growth continues to be strong enough to complete the return to maximum employment and long-run inflation expectations remain well anchored. Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter"

The Fed's rate projections (via the Dot Plot) aka. Deathstar 2.0 implosion sequence...
Fed Funds Rate (black) with U.S. Deflation via the Treasury Inflation Protected ETF (red):

"We need to raise rates soon, before stocks get out of hand..."
"continuing to hold short-term interest rates near zero well after real activity has returned to normal and headwinds have faded could encourage excessive leverage and other forms of inappropriate risk-taking" 

Global RISK OFF Visualized:

To paraphrase Yellen's speech, my comments in brackets...

Saturday, September 26, 2015

The Age of Denial Is Ending. In Denial

Deflation is hunting denialists to extinction...

Global Dow

Since 2008, we've seen peaks in:

Soft commodities
Hard commodities
Global trade
Global stocks (chart above)
Corporate revenue
Global interest rates (500 year low)
Emerging Market Debt
Junk Bonds
Consumer sentiment

Since the Yuan Devaluation Aug. 11:

EM currencies
Carry trades

Lumber aka. "Housing recovery"

The Dow is pausing in 2013 on its way back to 2008...

Deflation #Won:

Game over, man 

1929 Hotel Californication Count

All charts Nasdaq 100

5 waves down off of the FOMC meeting last Thursday and then 50% retracement (retracement doesn't even show up on the daily chart above)
Futures from FOMC last Thursday ('c'), through yesterday's close which almost broke to new lows...

As it was in Y2K, Nasdaq is leading the Third wave down

The doors just closed on the Hotel Californication

Globalization Is In Last Stage Collapse: Revelation

"The zombies never saw it coming. Incapable of trusting anyone who could be trusted"

Globalization was sold as an attempt to create record prosperity. Instead it created record poverty. In attempting to monetize poverty, Econo-dunces bankrupted themselves via their own impossible model. Shit happens, man...

Emerging Market Stocks:

Global Macro: Approaching singularity
Canadian dollar, All Commodities, U.S. deflation (TIP:TENZ), Russian stocks, EM Currencies

2012: Scientific American:
"The average American will drain as many resources as 35 natives of India and consume 53 times more goods and services than someone from China..With less than 5 percent of world population, the U.S. uses one-third of the world’s paper, a quarter of the world’s oil, 23 percent of the coal, 27 percent of the aluminum, and 19 percent of the copper."

The odds that the consumption-oriented lifestyle would scale across 7.4 billion people, was always ZERO, as indicated by third grade math.

Right now due to the separation of supply and demand via Globalization, the developing world has too much investment with no consumption. Whereas the developed world has too much consumption with no investment. All of which amounts to rampant deflation. When wage deflation exceeds price deflation that equals de facto 'poverty'. Human history's largest supply glut.

When confronted with global economic deflation, both of the predominant Post-WWII Macroeconomic models failed because they were trying to achieve the mythical "free lunch":

1935-1980: Keynesian Demand Side Economics
- "Demand creates Supply"
- End result: stagflation aka. too much money chasing too few goods

1980-2015: Supply-Side-Voodoo-Trickle-Down-Ponzi-Reaganomics
- "Supply creates Demand"
- U.S. Debt grows 9%/year compounded for 35 years
- End result: too little money chasing too many goods
aka. rampant poverty

The financial impacts of an unsustainable model are always felt first. aka. overnight via the S&P futures. The economic impacts of a failed model are then subsequently revealed as everyone realizes at the same time that the separation of supply and demand has created supply with no demand, temporarily brokered with Ponzi debt.

"There, but for the Grace of God, Go I"

Friday, September 25, 2015

The Jedi Mind Trick For Stunned Dunces. Just Ended.

Deja Vu from 2007, the Fed subsidized gamblers to take excessive risks, and now is leaving them high and dry...

This just in:
Janet Yellen: Sept. 24, 2015:
"If the FOMC were to delay the start of the policy normalization process for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals. Such an abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into recession. In addition, continuing to hold short-term interest rates near zero well after real activity has returned to normal and headwinds have faded could encourage excessive leverage and other forms of inappropriate risk-taking that might undermine financial stability. For these reasons, the more prudent strategy is to begin tightening in a timely fashion and at a gradual pace, adjusting policy as needed in light of incoming data."

Inappropriate risk taking? Only six years' worth...
52 week range of average stock (red) with interest rates (black)

ZH: Sept. 25, 2015
“The Fed cannot permanently raise stock prices”

"Yellen’s speech should quickly begin to hurt over-priced financial assets"

How soon is today?

Fed dunces want to raise rates BEFORE the stock market peaks. Otherwise "it's too late".

Too late visualized:
The last two times that monthly momentum (MACD)(lower pane) was at these levels, interest rates (black line) had peaked months and years prior:

The Fed "put" (option) was only ever a gambler fantasy, born of the 1987 crash when Greenspan eased policy after the crash. The mythical put did nothing to ease the -50% loss in 2000, nor did it prevent Lehman and that -55% loss. 

In other words, the Fed "put" does indeed exist, but at a level far below the current market. 


CasinoConomy Update: Biotech Bear Market

The Casino (Biotech) just joined the 'Conomy in a bear market

New weekly lows for all sectors below, except Transports...

The leading sector for the past six years just broke its August daily lows and is down -26% from the all time highs...

Bringing down Healthcare

...And Big Pharma: