Why change now?
Today's Madoff-inspired financial advisors are trying to figure out why their magic bullshit worked so great all the way up and is now failing all the way down. After all, the message has been consistent throughout:
"Buy stocks, and ask not reason why. Because before we had this job we were selling Pontiacs"
Today's Madoff-inspired financial advisors are trying to figure out why their magic bullshit worked so great all the way up and is now failing all the way down. After all, the message has been consistent throughout:
"Buy stocks, and ask not reason why. Because before we had this job we were selling Pontiacs"
Today's rally was compliments of Goldman Sachs which announced yesterday that an impending rally would be forthcoming as companies exited the stock buyback blackout window. For today at least, they were "right". In the same way that the Madoff acolytes were right all the way up.
This is what 37x average volume looks like:
Let's also not forget that it was Goldman Sachs who said last year that companies with the largest stock buybacks underperform the overall market. That trend has continued in 2018...
Let's also not forget that it was Goldman Sachs who said last year that companies with the largest stock buybacks underperform the overall market. That trend has continued in 2018...
Getting back to reality...
This has been the largest monthly decline in the Nasdaq since October 2008 on both a relative and absolute basis:
The smart money knows this con job is over. So much so that they've been shorting the weakest sectors, specifically semiconductors and retail. This has given Skynet new life chasing shorts out of the casino. After all, if you can't find buyers below the market, might as well find them above the market. Be that as it may, these short-covering rallies are getting weaker and weaker. Goldman Sachs-inspired rallies notwithstanding.
The fifth failed rally in 10 days:
The fifth failed rally in 10 days:
Here is where it gets interesting, semiconductors are one of the worst performing sectors because everything uses semiconductors now from smartphones to video games, AI, crypto servers, automobiles. So as those sectors roll over, they take the related semi companies down with them.
There was a three day short-covering rally in semis in mid-October, and one now. In between the wheels came off the global risk bus:
Zooming out on semis and we see that the S&P 500 is following closely behind:
Another sector that gets heavily shorted are the clothing stores
These too are rallying right now with every bounce in the futures. Notice that when the short-covering ended in February, the S&P quickly re-tested the lows:
However, as a ratio of the S&P, the rally is not as impressive:
Next, we get to beaten down Chinese Tech stocks. These too have enjoyed something of a rally recently. Again, some would have us believe that the Chinese government "controls" their stock market. If this is control, I would hate to see loss of control.
"China’s securities regulator stepped into a tumbling stock market to assure frayed nerves, but stumbled in its attempt by misspelling the name of its supervising body, creating confusion"
Apparently, clarification by the Trump administration that escalating tariffs have always been on the table, also placated markets. Because you wouldn't want any confusion hanging over that policy.
Which gets us to Amazon, which is likely neither shorted nor bought for any reason. Just a pile of lead in the portfolio of every hedge fund and about 200 ETFs.
Transports
Bye bye Feb. lows:
Real Estate Third Wave Down
And here we are, back at this bullshit - the reason the 'Conomy went under the bus in the first place:
File that under "careful what you wish for", because semiconductors are confirming the cycle is over...
