Thursday, January 16, 2020

An Exceptional Grand Finale. Indeed.

Trump true believers call themselves "value voters", which is why they consider Trump CasinoNomics to be an excellent long-term investment. What comes next will reveal that neither belief could be further from the truth...

The only factors driving the Trump super bubble higher are short-covering and momentum performance chasing into extreme overvaluation. Once that exhausts, look out below, as human history's largest bubble explodes. Bulls need to start worrying about the week ahead when the rest of the world will be two overnight futures cycles ahead of the U.S. due to the MLK holiday, at a time when the U.S. is totally decoupled from the rest of the world. Which is why the rest of the world will have the final say as to how this gong show ends.

Headlines like this one only come at key reversals of fortune:

Robo market is totally out of control.

The reach for risk exceeds the two market events in 2018:

Cycle high market over-valuation is coming at a time when fundamentals are rolling over. Which means that Wall Street earnings projections are getting set to collapse.

This is the Cass freight index year over year, showing U.S. shipping activity across all modes of transportation:

Which confirms the Baltic Dry Index:

We learned on Friday that job openings are collapsing at the fastest pace since the last recession:

This last stage melt-up has been led by a bizarre consortium of junk stocks, war stocks, mega cap Tech, and recession stocks:

Traditional retailers are going out of business at a record pace:

Recall, Michael Burry of Big Short fame warned about the index super bubble.

Now Zerohedge warns, hedge funds are chasing performance, afraid of being left behind by implosion:

Which is why now, big cap Tech IS the market. 

Starting any night now, the rest of the world will be front-running U.S. gamblers out an ever-narrower doorway...

MAGA's main accomplishment was to drive an extreme divergence between the smart money and the dumb money:

Position accordingly: