We're on the right shoulder of the third rally of the third mega bubble. No amount of warning could waken these zombies...
ZH: Even The Machines Are Selling Ahead Of Time
Remember January 2018 when stimulus junkies were told that the big Trump tax cut was going to bring a massive dose of fiscal stimulus to the casino and set off a big rally? Gamblers went ALL IN, only to find out that was the end of the rally, not the beginning. The smart money had been selling into the rally ahead of the news.
Fast forward to now, and once again stimulus junkies are lubed up over a big dose of monetary stimulus. Meanwhile, liquidity is already collapsing, as yet again, the smart money is selling ahead of the news. The definition of insanity is doing the same thing over and over again, each time expecting a different result...
Here we see via the Hedge Fund VIP (Most owned) ETF, two nearly identical melt-up rallies. Double tops:
The major difference is that liquidity is much lower this time around, as we are further into the gambling cycle. Liquidity has been falling for a year and a half straight.
The market has a technical problem. It's called "sell":
As we know, breadth has also collapsed over the past 18 months, even as the casino continued to make new highs:
As each asset bubble runs its course, more gamblers exit the casino
Word on the (Wall) Street is that this is a fool's rally