Thursday, August 13, 2020

2020: The Year Of Living Dangerously

Global depression, fake stock rally, Herbert Hoover President, Fascist/Marxist political wars, what's not to like?

You can't make this shit up.

Now, at this latent juncture, as the global economy implodes, gamblers have crowded into a handful of massively overvalued Tech stocks which are deemed as "safe havens" from pandemic. All of which companies are currently under anti-trust investigation. In addition, the U.S. China trade war truce has ended and the trade war is resuming. On top of that, millions of families have just experienced a massive drop in unemployment benefits. However, complacency is rampant in Trump Casino because the economy has been fully replaced by the Federal Reserve balance sheet. Apple is now approaching $2 trillion in market cap, having reached $1 trillion two years ago this month.

Thanks to Dumbphone 11, which is one better than 10. 

Isn't it?

Meanwhile, speaking of living dangerously, we learned this week that the COVID vaccine(s) very likely won't work on fat people. In other words, the vaccine won't work on the people who are at most risk from the disease. The vaccine will only work on young fit people who have no plans to get vaccinated.

“Will we have a COVID vaccine next year tailored to the obese? No way,” said Raz Shaikh, an associate professor of nutrition at the University of North Carolina-Chapel Hill.

“Will it still work in the obese? Our prediction is no.”

The good news for Trump supporters, is that they don't need to boycott the libtard vaccine since it's not for them anyways. No immunity, no vaccine, no healthcare, no social distancing, no masks. No worries. Ignorant arrogance will be measured in body count, in the Republican tradition. This time on a biblical scale.

Speaking of vaccines, here we see that Biotech is rolling over hard deja vu of 2015 smash crash:

Since Tuesday, momentum Tech has staged its first bounce deja vu of February. This time however, the bounce came at the 50 day. Which makes the next stop the 200 day (red line):

The Nasdaq 100 backtested the upper boundary line today.

All of the indicators are lined up deja vu of February. Confirming this week as the likely top for the Tech bubble:

Here we see a third lower high in gambler positioning, as the glue fumes slowly wear off. The COVID rally's level of call/put ratio is the highest in HISTORY. Newbie traders are using rented capital to move markets. Which works great on the way up, however when the call options expire, it makes for a bidless market on the way down.

The lesson NOT learned in February will be learned now:

Recall February 26th, 2020:

“This bull market is not going to end until the public falls in love with stocks, and that process may just be beginning.”

Members of r/WSB believe they’ve discovered a kind of perpetual motion machine in the interplay of stocks with options contracts"

A favorite tactic  is to swamp the market with call purchases early in the morning in an attempt to force dealers to keep buying stock. Up and up everything goes"

And when the last fool is found the majority of options expire out of the money, and then down down everything goes...

Case in point is Tesla, which is consistently the most active Nasdaq stock by dollar volume, as it was at the market top in February. Note that Tesla dollar volume is four times higher than the Nasdaq 100 ETF (QQQ).    

Apple and Tesla just announced stock splits to make it easier for home gamers to trade options

Tesla is tracing out an almost identical top as February. I marked wave (ii) on the equal weight S&P 500:

In summary, all of the above means that gamblers are piled into stocks on the basis of a useless vaccine that will in no way help the imploding economy.

Which this week leaves an S&P casino back at all time highs with the lowest GDP since the Great Depression.