Friday, October 27, 2017

The Richest Man In Babylon

What drove this week's epic rally? Tax cuts for the ultra-wealthy. The same thing that has driven this rally for the past 12 months. And in the process, they crowned a new world's richest man - the same man whose web site has successfully bypassed the entire U.S. economy. Single-handedly imploding every sector of the U.S. economy, book stores, apparel stores, department stores, music stores, sporting goods, grocers, auto parts, electronics, home appliances, jewellers, home goods, furniture, and this week, big pharma. With help from the Fed of course...

Deja vu: last week the casino staged an epic rally into Friday closing at a new all time high. Then it fell this week through Wednesday. Then it staged another drive to all time highs...

Any questions?




I call this the double tap. Not a typo...



That's the short-term, here is the medium term:
Way back on July 27th of this year, Amazon catapulted to a new all time high. For a few hours, Jeff Bezos was the richest man in the world. The Nasdaq sold off for the following three weeks...

Fast forward exactly three months:


And now the long-term:
Way back during the week of October 27th, 2007 Microsoft made its cycle high. The Nasdaq 100 peaked at the exact same time. 

Fast forward exactly 10 years:




The rest of retail of course is getting obliterated this week:




Treasury yields are having a key reversal today:




The rest of the casino is imploding:










The world ex-U.S. is rolling over









Despite today's Nasdaq mania, the Dow peaked on Tuesday...




"I bought for the tax cut, but I stayed for the haircut"










Thursday, October 26, 2017

Corporate Capitalism Is Ending So Badly

I'm channeling my inner Trump, how am I doing?

Corporate capitalism has rendered the planet an environmental wasteland, while decimating the real economy. Humanity has been conveniently debased into a servile Idiocracy of rapacious consumption zombies. Aside from that everything's great.

The opioid crisis visualized. Any questions?




President Camacho who just spent the last nine months campaigning to repeal healthcare for the middle class and replace it with a tax cut for billunaires, was out today regurgitating someone else's empty platitudes via teleprompter on the opioid crisis. Unfortunately, he can't fix this problem or any other one for that matter with a few hollow bragging points spewed forth on Twitter. Trump is a human Twinkie - the embodiment of the consumption-oriented lifestyle: fake, phony, corporatized, and void of sustenance. 

Just as the consumption oriented lifestyle is handmaiden to the failed ponzi scheme known as 'Globalization', likewise the consumption oriented lifestyle is also the root cause of the opioid crisis. Massive doses of drugs are needed later in life to paper over the pain and damage wrought by a life spent worshipping at the false altar of "consumer choice". 

And contrary to popular belief, subsidized healthcare for roughly ten percent of working Americans is not in any way what is breaking the bank. The real unsustainable healthcare program is Medicare for the elderly, wherein an ever-growing populace of aging elephants seeks to roll onto an unlimited buffet of medical treatments and pharma drugs. Each pharma drug regimen costs on average $50k which is the same amount as the average American family makes annually. This blank check narco-system is insolvent as far as the eye can see, as there simply are not enough resources in the future to underwrite the unfettered consumption lifestyle. In other words, "rationing" of healthcare is inevitable and when it arrives there will be new concept called "waiting lines" for expensive procedures which will thin the herd accordingly. As others have astutely mentioned, prevention based upon healthy choices is the only cure. However, prevention is a solution that requires personal accountability and responsibility, something this society doesn't believe in. In the meantime, fentanyl which is the street version of what painkiller addicts can't always obtain legally will continue to take its toll.

And deep down you have to know that governments are frozen into inaction because they see overdose as much a cost-effective solution as a problem. So, similar to every other problem in this society, don't expect any real solutions soon.

The insurers are doing very well lately. The rest of healthcare is imploding:



Back to the topic of the casino, the fake reflation trade caught another bid today compliments of Super Mario. Meanwhile, after hours, Amazon beat Wall Street expectations of $.03/per $1,000 share by posting $.50 per $1,000 share, so the stock of course went vertical after hours. The fact that this still implies a 500 P/E ratio is beside the point. After all, Amazon has been paid for 25 years straight to destroy the U.S. economy, one industry at a time. Zero profit margins and slavery being the *new* American business models.




Momentum continues to get monkey hammered:




U.S.-listed Chinese internet just took out the 50 day for the first time in 2017...





Revenueless Biotech is imploding



Defense stocks are getting tired of waiting for WWIII





Home builders are rolling over on news that September saw the largest spike in new home sales since the housing market rolled over last cycle. 

After all, who knows more about the housing market than homebuilders?



The world's largest market cap stock is camped at the uptrend line:




Amazon will make every attempt to keep the casino bid tomorrow, but suffice to say, that stock has its work cut out for it...





CNBC:
Big Cap Tech Is Firing On All Four Cylinders





Wednesday, October 25, 2017

Key Reversal Of Fortune

Super Mario has his work cut out for him tomorrow, because volume and volatility are rising. Soon the machines will no longer be in control...

The lowest volume day refers to the lowest SPY volume in the past decade. At today's low bulls were looking at a bearish engulfing outside reversal on the weekly...




Speaking of key reversals, yields gapped up to a multi-month high but closed well below the highs of the day.

Bond bears have been pressing their record shorts above 2.4% on the 10 year, however, a break back below that level will lead to a colossal short squeeze that will implode the dollar, banks, Emerging Markets and anything else that's not bolted down...





NYSE breadth was worst since August




The Nasdaq 100 tested the lower trend-line on rising selling:



China Tech got monkey hammered. The favour will be returned overnight...




Inverse volatility tested the August high:








The lowest volatility October ever, isn't over yet...




Tuesday, October 24, 2017

"No One Wanted To See It Coming"

What happens when every risk asset implodes at the exact same time? We're about to find out...

"It was a Black Swan event"




The problem with artificially suppressed volatility is that it doesn't give markets a chance to shake out the weak hands and build support levels below the market. As the market climbs asymptotically, gamblers are forced to chase momentum at all price levels, leaving no chance to build a base. On the downside, the avalanche has nothing to stop it.  

As reported in Zerohedge and elsewhere, volatility, real, implied or otherwise is at record lows. Featuring among other things the longest stretch without a 3% pullback, in casino history

And yet, despite this widely known volatility suppression, gamblers assume they are still "owed" the usual advance warning prior to collapse:




"Fear not. The market will likely give you a heads-up before a 10 percent pullback, equity strategist Sam Stovall says"

Over the past 40 years, the S&P 500 posted an average of 67 trading days of high volatility, in which it rises or falls by 1 percent or more, before it tops out and drops at least 10 percent.

"Investors have been both pleased and unnerved by the rising number of new highs that have been accompanied by an absence of volatility," Stovall said. "The market will likely continue to surprise investors in 2017 in a positive way, and may even be kind enough to warn of an impending correction through a ramp-up in daily volatility."

Unfortunately, Wall Street monetized the usual volatility warning by shorting it into oblivion:



Which is why...

ZH: We haven't seen this since 2008:














Sound And Fury Signifying Trump

Closing in on one year since the election and what has Donny accomplished? Next to nothing. Aside from attempting to ignite WWIII, hurling Twitter insults, daily stock market updates, and running the NFL, it's been one year of non-stop bullshit.

Today's updates:



Hence, it should come as no surprise that the Icarus rally is running out of fumes. But we know that it will come as complete surprise to the de facto Idiocracy...





Any questions?

"The Idiocracy never saw it coming"




Here was a 100% prescient prediction from January of this year...
ZH: BofA Warns Of Icarus Meltup to Meltdown
The current rally started in Feb 2016 with...
bearish Positioning (BofAML Bull & Bear indicator = 0, cash = 5.6%, underweights in Emerging Markets & energy)
excessively bearish Profits 
and Policy impotence ("Quantitative Failure").

Thus the rally is likely to end with...
bullish Positioning (BB indicator = 8, cash = 4%, unambiguous long positions in stocks, Japan & banks)
excessively bullish Profit expectations 
and Policy hawkishness (Fed jacks up short end of yield curve, ECB tapers).

Fast forward to today, mutual cash balances hover near all time lows (3.3%). Emerging Markets have seen their biggest rally and biggest inflows since 2009. Japan is having its longest rally ever. Banks closed at decade highs last week. The Fed has been jacking up the short-end of the yield curve since the election.

And this week the ECB is planning to announce its taper:



"LONDON, Oct 24 (Reuters) - The European Central Bank is likely to decide the fate of its 2.3 trillion euro stimulus scheme on Thursday in one of the ECB’s most keenly anticipated policy meetings for months."


Excessively bullish profit expectations visualized:




Banks



Breadth momentum



"What do you mean there's no World War III?"





Monday, October 23, 2017

A Bad Week To Stop Smoking Crack

"They lived happily ever after"




Good news: The next 10 tax cuts, real or imagined are priced in
Bad news: Tax cuts are not going to prevent recession...

Here we have two prior indicators confirming a market top. Both ignored...




Wall Street is beating the bullish drum as loudly as possible to get this shit show over the December 31st bonus finish line...Unfortunately, what the Idiocracy hasn't learned yet, is that Wall Street can't be trusted...




"Good news: This market is ridiculously overbought."

"So where are we on the Dow at the moment? A whopping 87.61 [14 day RSI], which is higher than 99.999% of all readings going back to 1900"

"if you sold every other time the RSI hit such an excessive number, you’d have missed out on some solid returns. At least over the short term."

The Dow has corrected sideways or down every time the RSI peaked this year (at lower levels than it's at currently). The casino is currently 4.5% away from the 50 day...




ZH: Approaching Longest Melt-Up In History




Why gamblers shouldn't just look at the Dow:














Bueller?