Gamblers will say that "markets" gave no warning of risk ahead of the crash. What they will mean of course are the S&P futures. Most other markets gave ample warning ahead of time. Copper, oil, global trade, emerging markets, carry trades, bond yields, gold, are all screaming risk right now. This is all just an algo-driven delusion, waiting to explode. Most Wall Street idiots only follow the major averages which is why they don't see this coming. To them, stocks ARE the economy.
As we see below, on the left shoulder two years ago, the S&P peaked during the second to last week of January, just as it did last week. Then during the FOMC week, it rocked back and forth, just as it's been doing all this week. Then on the Monday following the FOMC, it exploded. Which if the analog continues, would be this Monday. Coinciding with the day that Chinese markets come back online from the Lunar holiday:
Of course history rhymes, it does not repeat. This thermonuclear detonation will be substantially more lethal than the one two years ago. Due to all of the damage that has occurred in ancillary markets. In other words, the S&P and Dow are the last dominoes to fall.
Here we see banks are far weaker than they were two years ago:
Emerging Markets are much weaker than last time, testing the 200 day deja vu of last Spring:
Pandemic positioning is about right. If that's your thing...
$USDJPY (carry trade) camped at the 200 day:
Volatility is about right. On the Friday before VixPlosion 1.0, the VIX closed at 17, as I write it's at 16, so Friday is still a wild card. We're seeing a lot of short-covering after the WHO announcement.
Once that ends, look out below...
Which means that the MAGA Kingdom is now massively leveraged to Tesla
Transports are a reminder of why I keep calling this a two year head and shoulders top. What happens to the global supply chain when countries decide to ban all travel to China? Transports will go bidless. After all, Trump is looking for a way to final implode China.
I am confident he will pull the trigger. Off hours.
That will be the end of the MAGA Kingdom.