Wednesday, September 30, 2020

October 2020 In Trump Casino

The economy is imploded, but gambling is alive and well in Trump Casino. It was the first down month since March, which means it was another victory for the bulls...

First, let's recap September in Trump Casino:

Late August ended with a massive melt-up compliments of the Republican National Convention. The casino peaked on Wednesday September 2nd. Then it imploded into end of week options expiration. Then it rallied into FOMC Wednesday Sept. 16th and imploded AGAIN into weekly opex. Then it rallied into the end of the month to nicely paint the tape at the end of the third quarter. By total coincidence similar to August. It was the first down month since March, yet volatility peaked at the beginning of the month, as gamblers bought the dip with both hands. 

The Nasdaq went nowhere for the past three weeks as breadth imploded:

Gamblers kept Momentum Tech well bid, continuing to use options to manipulate the market:

Weak bears capitulated. A necessary and sufficient condition for a crash:

Chinese stocks imploded deja vu of February/March:

Solar stocks went late stage parabolic, as the ESG movement picked up steam amid widespread fossil fuel divestment. 

The IPO pump and dump accelerated into month end, as economic cyclicals imploded

Safe havens pre-imploded

So, let's compare today's market relative to the 2018 mid-term elections:

Back then, the casino peaked in late September and then fell the entire month of October leading up to the election. 

This time, the casino peaked in early September, putting it at a weaker position going into October.

What could go wrong?