Thursday, November 5, 2020

FOMC: Fear Of Missing Crash

Gamblers are racing back into the imploding Tech bubble to seek shelter from the collapsing economy. It's all monetary heroin and Go Daddy now...

Election day featured the second best election rally in history and yesterday was the best post-election rally in history. All despite still having no confirmed leader. Clearly we are on to something good. If they stopped counting ballots and declared no winner, the Dow would instantly double. We could have a pet squirrel for president.

On the monthly view, since September there was a Trump tax cut rally, a Biden stimulus rally, and this is the no leader, no stimulus rally. Each rally has become more manic and more vertical. What took 10 days to achieve in October, just took 5 days now. All it took was the absence of a leader and no hope of stimulus. The old age home has watched this movie three times now, and they still don't remember how it ends. 

This is the largest rally since the wheels came off the bus in March. The week that also featured the primaries, a Fed meeting, and a jobs report. 

Recall that the month of October was the Biden blue wave reflation rally. The idea that a unified government would bring to bear massive stimulus. Now however stocks are rallying because the risks of having a strong economy are now receding. 

If you don't understand all this, you don't get Disney markets. It's called buy first, make shit up later. And always prefer monetary heroin over a good economy. 

What all three rallies have in common is fear of missing crash. FOMC. What happens when the largest cap Tech stocks are moon shot into the stratosphere? We found out back at the February 2018 VixPlosion melt-up - they return from orbit bidless. Nevertheless, it's highly appropriate that the MAGA caps are leading this last stage glue sniffing rally. Notably however, only Google is at new highs. Amazon, Microsoft, and Apple are well below their September peaks.

Outside of MAGA caps, semiconductors are leading the overall Tech blowoff top:

So far, the wave count remains intact.

Brick shitting panic is on tap when everyone gets loaded up with risk for the end of year Santa rally.

One can make the case that the next geezer for president is already priced in. Markets apparently got what they want, another stimulus stalemate between Pelosi and McConnell.

And a new record pandemic case load.

In summary, the algos are running flat out to get as many bulls onboard as possible. Before they hit the exits and leave the bulltards in a bidless market. Because after all, someone has to be left holding the bag. It's tradition.

Just remember, "No one saw it coming"