Sunday, January 19, 2020

There Is No Alternative To Crash

The problem with believing in Disney markets is that no one tells you when the ride is ending. Market pundits are tripping all over themselves to raise their Ponzi estimates for 2020. As their price projections for the year get surpassed in the first three weeks...

The U.S. is the only market on the planet making new highs in dollar terms, which is why the U.S. is the only game in town. But don't worry, because there is "Method in the melt-up":

"Barron’s predicted in 2017 that the index would hit 30,000, though we were too conservative in the timing: We targeted the year 2025"

In other words, the Dow is hitting the Barron's long-term price target five years ahead of schedule, nevertheless, the "melt-up" is just getting started. I didn't read the rest of the article because I don't subscribe to bullshit anymore. I cancelled all of my subscriptions to bovine excrement.

Below we see the Dow versus the rest of the world. We've seen this movie before. The last time the rest of the world (ROW) failed to confirm a new U.S. high, was of course in October 2018 when the U.S. peaked sans ROW, and then imploded -20%. The time before that as shown with the blue line, was in 2015.

It appears that the "TINA" (There is no alternative) to U.S. trade, only lasts so long before it implodes spectacularly:

Here is some more interesting "advice"

"Another way to think about, the ferocity by which stocks have climbed in the first three weeks of this year, S&P 500 gains have already exceeded the 2020 estimates for nearly half the 18 analysts surveyed by MarketWatch."

Meanwhile, a measure of how intensely the market has been bought is showing the highest reading since January of 2018"

But what could go wrong when volatility speculators are positioned far more aggressively than they were the last time volatility exploded?

Here is the good news for bulls:

“Ignore value at your peril”

The most overvalued market in U.S. history and this moron is saying ignore "value" at your peril. You can't make this shit up. There is no value. 

“When value underperforms to the extent we’re seeing now, there historically has been a sharp reversal.”

The last time this strategy experienced such extremely poor results, value put in three great years of performance, from 2000-2002“

As we see below, the S&P 500 dropped -50% from 2000-2002.

However, the real smoking of crack was reserved for Forbes magazine this week:

What it all points to is a corrupt industry that has sold its soul to central bank managed Disney markets. They don't get paid if gamblers sit in cash, so now they have come to a consensus of corrupt dunces that the bubble can only get larger.

It appears that Wall Street is giving one type of advice to their clients and another type of advice to themselves.

After all, for every seller there must be a buyer:

History will say it was 100% corruption at the end.

Should be an interesting week in Trump Casino.