"Cue Gary Busey for November"
There is one overriding reason why complacency is so high right now among gamblers, stock analysts, media pundits, economists, and other assorted morons - because denialist monkeys prefer opinion over fact. It's that simple - in the face of existential economic risk, they prefer the soothing pablum from proven dunces to the inconvenient reality staring at them in the face.
This week they've been buying their last chance to get out of Trump Casino with both hands. Now, it's time for panic.
Anecdotally, my twenty-three year old (middle) son told me yesterday that all of his friends at work were doubling down on Tesla.
It's clear that not only can one generation not learn from another, but one generation can't even learn from itself. This is the third Millenial bubble in two years.
And of course it's the third Boomer bubble in twenty years
Much virtual ink is now flowing over this as-yet minor selloff. Various "quants", pundits, and Ponzi schemers - the charlatans of our day, offering their predictions on when this will end. Almost all reaching the conclusion that the worst is over.
A quantitative analyst is a PhD who uses proprietary models based upon arcane technical indicators, while assiduously ignoring the world imploding around them in real-time. For all of their fancy pseudo-intelligence, they are merely pure play momentum traders. In terms of predictive accuracy it goes downhill quickly from there, next stop being "fundamental" analysts who use proprietary Magic 8 balls to predict the future. They are always right until it REALLY matters - at the end of the cycle, when they are ALWAYS wrong.
From there it's a big leg lower in IQ to the Federal Reserve who were still debating whether or not the economy was in recession eight months after it had started in September 2008. They were actually considering RAISING interest rates on the day after Lehman.
"The Fed then turned its attention to a discussion of whether to raise the federal funds rate, which on that day sat at 2%"
One thing they ALL have in common is that they are ignoring the bond market which has been screaming global recession for six straight months now.
We are to believe that 20-something gamblers in Tesla know something that bond traders don't know. Again, speculative opinions and speculative positioning over raw facts.
Disinformers' combined efforts to soothe the complacent herd have worked fantastic. Yesterday I showed Rydex cash balances at all time lows. Today we see Rydex bullish positioning has surged this week.
Instead of selling as they did the last two times, this week they doubled down:
Overnight, the S&P futures tagged the 200 dma (red line) and then bounced 80 points higher in a straight line. Leaving that index in no man's land. Yesterday's volume was 3x average:
Momentum stocks are backtesting the 50 day from below:
The next leg down will bring margin calls on a MASSIVE scale.
Tesla is 25% above the first level of support:
Bonds warned, banks warned, transports warned, retail stocks warned, autos warned, emerging markets warned, commodities/oil warned, deflation warned.
This is a bear market in everything except over-priced crap which is now about to explode with extreme dislocation.
In summary, the Useful Idiocracy is about to learn a hard lesson about the two types of ROI - Return On Intelligence versus Return on Imagination.
