But first, the Faux News headlines:
Trump is guaranteed re-election
The coronavirus is over
The trade war is over
The U.S. economy is booming
The World economy is booming
It's the best case scenario, and it's all priced in. There's only one problem, none of it's true. After a decade of monetary bailouts, today's Super Idiocracy can no longer tell fact from fiction. They have now been fully euthanized by human history's largest stimulus bubble featuring combined fiscal and monetary dopium at 10% of GDP. MAXIMUM DOPIUM for maximum shock and "aw fuck, not this again!!!"
The Hindenburg Omens are stacking up on the right shoulder. To complete the two year top:
On the topic of the Big Short, you can't beat the irony of Lloyd Blankfein from Goldman Sachs - the company that invented the self-imploding subprime CDO circa 2008 which took down the Global Financial system - now saying that Bernie Sanders will ruin the economy. Too late, Wall Street got there first. What kind of society still gives a damn what these proven criminals think? One that elects Donald Trump on the basis of far greater criminality, that's who.
Wall Street has invented an even bigger financial WMD this time around. The dumb money index super bubble, customized to meet the requirements of the current president.
Looking back, historians will say that this last bubble was merely the biggest pump and dump in history, featuring human history's largest leveraged buyout of corporate insiders via record buybacks, and of course a Silicon Valley cash out. Trump was the only way these people could get out at the end of the cycle. There's no way anyone else could create this large of a divergence:
Wall Street's latest attempt to re-ignite the unicorn pump and dump, has already crashed:
Where to begin with today's crack high. Start with the comparison versus two years ago. Back then the tax cut crack high led to a top, rollover, and crash. This time around, the Repo/Corona crack high led to a top and then a selloff at the end of January wiping out all of January gains. However, come February, the market exploded higher fueled by China stimulus and led by Tesla and software/cloud stocks. The reflation trade has lagged since the January selloff.
However, today, reflation is on fire, while cloud software is rolling over. Here we see that unlike two years ago, speculators never went RISK OFF in late January, they merely rotated to the riskiest stocks.
"Get some Tesla"
Here we see the selloff in January pounded banks which have now rallied back to the 50 day:
Likewise, EMs got pounded in January and are now clawing back to a lower high deja vu of two years ago. The attendant narrative: "The Coronavirus is fixed":
“The last weeks have been brutal and the number of cases and death toll have accelerated at a frightening rate,” said Craig Erlam, senior market analyst at Oanda, in a note. “It’s far too early to declare victory, but in the era of FOMO trading, investors are doing just that.” FOMO is an acronym for “fear of missing out.”
What we are witnessing is a minor three wave correction in the reflation trade attended by a motherlode of bullshit.
Big Pharma is soaring because every fool knows that Sanders can't beat Trump in America's greatest economy aka. stimulus super bubble.
On the other hand when it explodes without any warning, that's an entirely different matter.
In summary:
The world (ex-U.S.) crashed in late January, which kicked off the third wave down. Now the world is rallying back to a lower high as the Nasdaq completes its blowoff top. Note RSI (top panel) is not confirming this final Tech melt-up.
What comes next will be a Tech bubble explosion accompanied by third wave down at all degrees of trend in everything else.
Super Crash.
Which is why gamblers who focus solely on the Dow and the S&P 500 don't see this coming. Today's index watchers and pundits are card carrying members of the dumb money super bubble.
‘The longer it goes on, the worse the crash will be’
"It's fixed"
