Monday, December 23, 2019

'Tis The Season For Hard Lessons

History will say that Trump was the believed and beloved King of Dumbfucks. Their saviour from the liberal conspiracy known as reality...

No surprise, Evangelical leaders are rushing to defend Trump from the inconvenient truth published in Christianity Today. These sanctimonious hypocrites want to learn the hardest way possible. The irony of this moment is that the Republican echo chamber of incessant lying has put record capital at risk in a stimulus driven super bubble. They've put the system itself on the chopping block. Only a Super Idiocracy can fool itself, every time...

The premise behind Elliott Wave Theory is that social mood drives markets:

"Elliott Wave Theory is a method of technical analysis that looks for recurrent long-term price patterns related to persistent changes in investor sentiment and psychology."

The question of the day is whether or not central banks and computer algos now have FULL control over markets. Which if true would imply that Social Mood Theory is no longer relevant. The answer is NO they do not have full control, however YES today's gamblers assume they do have full control. Which is why euphoria is so high right now. Gamblers are assuming central banks are invincible.

Case in point, Zerohedge now sees this vertical melt-up lasting another three months. Just another Disney markets true believer drugged by simulated prosperity, and its acolyte QE.

Belief in central bank alchemy is COMPLETE.

We are witnessing the supernova melt-up scenario I described last week - lethal amounts of over-stimulus driving a vertical asset bubble that explodes SPECTACULARLY.

"This is just the beginning"

The Super Idiocracy is lubed back up to VixPlosion 1.0 levels ("Tax Cut"):

My hypothesis, which is about to get tested, is that fear and greed still control both ends of the cycle, but central banks and algos accelerate momentum, giving the illusion of control. The only reason the various "corrections" to date have not become bear markets is because we hadn't reached the end of the cycle. We hadn't witnessed the euphoric blowoff top that attends the end of the bull market. 

Until now.

Nearly all of the early December gain was among upper-income households, who also reported near-record gains in household wealth, largely due to increased stock prices"

This chart below and the sentiment report above points to a blowoff top in euphoria among the wealthiest Republican households. One decade in the making:

Other sentiment measures clearly indicate that EVERYONE ELSE already left the party:

"Partisan differences also sharpened, as Republicans' sentiment jumped to the highest since President Donald Trump took office, while Democrats recorded a decline"

i.e. the entire rest of the world

Among the many lies being told right now is that "Global stocks" are at an all time high. However, strip out U.S. stocks and in particular U.S. Tech and nothing could be further from the truth. 

Which means that the wealthiest Trump supporting households now own a bigger, fatter, uglier Tech bubble.

Nasdaq highs have also receded (lower pane):

And third wave panic in everything else

The average U.S. stock is lower than last year:

Here we see Amgen spiking as it did prior to smash crash 2015.

In keeping with the smoking crack theme of the day:

A handful of parabolic banks are making end-of-cycle runs to new highs, unconfirmed by the overwhelming majority of financial stocks

"In three months be ready to sell, at the same time as everyone else"

Only a Super Idiocracy can fool ITSELF every time

The trade deal put semiconductors into stratospheric blowoff mode. Currently led by AMD. Deja vu of last year:

"Get in ahead of the crowd. Everyone is going to want one"