Tech Super Wreck

Amid the new permanent crack high of delusion and crash risk coalescing at record highs, it falls on us still-sane "perma-bears" to explain why liquidity-driven melt-ups into expanding pandemics are not buying opportunities. Everyone else has been thoroughly lubricated by the virtual simulation of prosperity and its acolyte QE. I hope they understand how all this is going to look after-the-fact; because like table dancing drunk naked, these things always make a lot more sense at the time...

"I never thought Trump would lie about the economy just to get re-elected and stay out of jail. Selfish bastard"

If one is to believe that the riskiest stocks are safe havens from global pandemic, this all makes perfect sense.

Let's begin with the drugs being served at this party:

"Risk appetite recovered in a big way Tuesday, as global equities surged amid more signs the PBoC is prepared to do what it takes to inoculate China’s economy and financial markets from the Wuhan outbreak."

In other words, gamblers now believe that central banks can inoculate society against viruses.

From the casino perspective, recall that last week the entire reflation trade crashed amid a rotation to Tesla, the new safe haven. Which set-up the "fifth wave" blow-off top in risk which accelerated early this week with the China bailout.

Now, that Tech blowoff top is beginning to reverse, led by Tesla:

Today, Tesla was down -25% from yesterday's high. Once again this stock led all others in dollar volume by a wide margin.

Here we see the mother of all key reversals on the weekly chart. Gains are measured from the bottom up, whereas losses are measured from the top down. At the current level, the stock is now up 315% in 7 months:

The other stock of interest is Microsoft. When the Coronavirus hit, money rotated to software which was viewed as a safe haven during the trade war as well. Since the virus outbreak, gaining 15%:

A major reversal today:

Here we see the software sector deja vu of August:

On the other hand, here we see that semiconductors peaked over a week ago on Friday January 24th, crashed last week, and rallied to a lower peak today.

I've noticed that liquidity is peaking mid-week and then collapsing into the end of the week recently. Which indicates distribution by institutions. The two big red candles are the past two Fridays:

Which leaves us with what is driving this late stage melt-up in the S&P futures:

Here we see fracking stocks having the best day in months:

Banks having the best day in weeks

Of course in China, this Coronavirus selloff has been going on for two weeks now. Here again, we see that liquidity is peaking mid-week lately:

In summary, too many bears were expecting meltdown to occur this past Monday when Chinese markets came back from Lunar New Year, however, the PBOC came in with the bazooka and blew them up. In the event, the PBOC sponsored a monster short-covering rally featuring three massive gaps below this current level, which the algos will gladly fill sooner rather than later.

Below those gaps is nothing but blue sky and stained underwear...

All of which sets up you know what...

Everyone Is Drinking The Kool-Aid

In an insane asylum, to question insanity is highly anti-social...

In retrospect, people will realize that everyone saw the obvious risk but no one wanted to speak out about it, so they just went along for the ride. Because to do otherwise would seem stupid.

Even these two who mention today's lunatic levels of risk-taking are very circumspect in their comments.

"Repeat after me, there is no such thing as Coronavirus"

The Trump bubble has grown so large now that no one wants to be seen as questioning insanity. It's groupthink on steroids, driven entirely by misallocated capital. People are balls deep now in the MAGA Kingdom whether through stocks, or real estate, or their political view. 

Which is why this new permanent plateau of delusion has silenced all critics. Faith in central bank god-like powers is complete. Now they're out there inoculating us against viruses.

When this faith gets broken, you can assume panic on a scale never seen before. There is no safety net now.

I was just chatting with an older friend who was asking for financial advice. I told him I don't give financial advice. He told me he believes his financial advisors are putting him in far too much risk. So I showed him the clip above and explained that people are drinking the Kool-Aid in record size right now.

I also told him that his financial advisors have no fiduciary duty to consider his best interest, because Trump killed the Fiduciary rule. He was shocked beyond belief. Picture how many old people out there are being preyed upon right now by unfettered criminals. This is a con man's paradise:

Make no mistake, we live in an age of unprecedented criminality. We are witnessing a level of everyday fraud and corruption we've never seen before. The fact most people can't see it taking place, is because most people base their perception of what's normal, upon what other people view as normal. 

Especially when it comes to markets. 

If everyone pretends that this Trump super bubble is business as usual, then people would feel stupid to come and out say that it's not normal. Most people have no clue what is normal or irregular when it comes to markets, particularly now after a decade of non-stop financial alchemy.

Bernie Madoff just took a look around and wondered, "why the hell am I still in jail? Everything I did is now business as usual"

My older friend asked me point blank why are none of today's academics or business leaders speaking out against this insane level of risk taking? My answer is, I don't know, except to say that they bought into it a long time ago. Ignoring valuations is now merely commonplace across every asset market.

Markets are now priced solely based upon what the next fool will pay. We are in a greater fool's market across the board, and when the music stops, not everyone will have a seat.

Nevertheless, in an insane asylum, to question insanity is highly anti-social.

Turning a blind eye to rampant corruption is about to become very unaffordable.

"Buy "stocks", Tech overweight is at record highs"

Impeachment Supernova aka. Peak Bullshit

Central banks and weak-handed short sellers are competing to drive the impeachment supernova parabolic. This delusion is running on MAGA glue fumes. If I were to devise a biblical con job, it would be exactly what Trump is doing and saying right now, only not nearly as good...

A decade of monetary bailouts have created the largest divergence between fantasy and reality in world history. All under the well-conditioned gambler belief that bad news is good news, worse news is better.

As always, the burden of truth remains on the truth. History will say that a fatal addiction to ignorant and arrogant bullshit was the end of the Republican party.

The grand finale version of history will go like this:

At the end of the longest expansion and bull market in U.S. history, the economic tank was totally out of gas. The Trump tax cut and attendant mega deficit had boosted bond yields sending the Dow down -20% from peak to trough in 2018. Under extreme coercion from Trump, the Fed pivoted to full easing mode. They called it the "mid-cycle adjustment" coming at the end of the longest expansion in U.S. history. No one questioned it. For a time those three rate cuts kept stocks bid, however, by mid-2019 the bill came due for the tax cut, via record bond issuance. The overnight "repo" lending market collapsed. The Fed stepped in to take over the entire repo market. In the event, the Fed fully monetized Trump's deficit, creating a combined 10% of pro-cyclical fiscal and monetary stimulus. Unprecedented in U.S. history. Stocks skyrocketed, creating a massive divergence with the underlying economy. Valuations reached record levels By the end of 2019, the market was the most overbought in almost fifty years. Amid non-existent pullbacks.

By late January 2020, the Fed rocket ship was starting to lose thrust, just as the Coronavirus broke out in China. The world's second largest economy was on the ropes after two years of trade wars, Hong Kong riots, and global deflation. The PBOC injected massive stimulus into markets creating the blow-off top for global risk, led by Tesla which was the most shorted stock in the world.

All of which gets us to this week. Last week I described the various combination of historical crashes that rhymed with this impending super crash. In particular I said that VixPlosion 2.0 was imminent. Of course, when the market opened this past Monday, the PBOC delivered their monetary adrenaline injection which has put a bid under the most beaten down global markets.

Be that as it may, this latest bailout rally has been extremely uneven. Leading mega cap software stocks saw almost no pullback last week. Whereas economic cyclicals crashed. Which is why now, Microsoft, Tesla, and a handful of other massively overbought names are making new bubble highs, while the rest of the market is lagging. Central banks have succeeded in creating market concentration on a scale never before witnessed.

As I write on Wednesday morning, the overnight futures are vertical bid for the third day this week, back towards new S&P all time highs. The Nasdaq hit a new high yesterday.

There is extreme biblical irony in the fact that MAGA has succeeded in decimating the oil industry while the world's leading alternative energy stock goes parabolic.

Which is a minor preview of the paradigm shift that is about to come:

What we have now is a bear market ex-Tech, and a recession ex-deficit

The Age Of Criminals Is Ending

No, they don't see it coming...

Our only protection from record criminality, is record criminality. Those currently being eagerly robbed blind, are merely paying into "the system". Don't expect them to be too happy when they find out they voted for it.

AGAIN.

When George W. Bush got elected in 2000, many people were willing to give him the benefit of the doubt, despite the fact that his personal and professional life were squalid at best. Maybe he was Born Again, after all. However, after it was revealed that his administration had fabricated the reason to invade Iraq, Bush's re-election in 2004 was no excuse. Pure criminality. Of course, all of his record fraud blew up in their faces in 2008.

Fast forward, and we are seeing the exact same fraud all over again. Except of course 10x worse. Because that's what happens when criminals are not held accountable. They resort to far greater crimes. The fact that Trump's popularity among Republicans is at an all time high, demonstrates the depth of depravity within that party.

Reagan's tax cut raided Social Security and Medicare, both of which were in surplus at the time, the absconded funds were replaced with worthless IOUs. Bush's tax cut did the same thing - took real money from people's paychecks, handed it to billionaires, and replaced it with worthless IOUs. Trump, did the same thing, which is why in this same year that Social Security is no longer in surplus, those worthless IOUs will now require Treasury debt issuance. Because guess what, the IOUs themselves are WORTHLESS. 

"Asked if entitlement cuts would ever be on his agenda, Trump responded, “At some point they will be.”

Only in the United States are deductions from worker paychecks called "entitlements". That's the term criminals use when they are getting set to plunder the Treasury. In every developed nation, those deductions are called retirement programs, and they are protected from criminals.

Now of course, left to the Keystone Kop Democrats, Trump could not only get re-elected, but he would then finish the job of plundering the U.S. Treasury in his rapacious second term. He would certainly get re-elected if the election was today with his approval at record highs, and the Democrats still not knowing who won Iowa. 

However, Trump's criminal abuse of borrowed and printed money, aka. his MMT (Modern Monetary Theory) financial weapon of mass destruction is very similar to GW Bush's subprime WMD - both were born of unfettered criminality. And just as in 2008 I bet with both hands that Bush's WMD would explode, I am betting today with both hands that Donny's WMD will explode. In other words, our only protection from record criminality, is record criminality.

Now that one record over-leveraged stock is powering the Nasdaq to new bubble highs, we can assume we are well along in the process.

Picture Millenials accidentally imploding the super index bubble. Fantastic irony. 

You have to wonder, what kind of people keep electing criminals over and over again. 

Clearly the kind that enjoy being robbed.

Buy The Fucking Meltdown

Global pandemic imploding the world's second largest economy. Trump taking credit for recession. Democrats can't find their ass with both hands. Millenials selling everything to buy Tesla. Three Hindenburg Omens in one week. An entire society in narcoleptic coma. What's not to like?


It's all fun and games until someone loses an everything.

Historians will say that an entire society lost their minds at the end. A decade of central bank sponsored delusion ending in mass delusion. Go figure. 

The machines can't handle RISK OFF in the Nasdaq Tech bubble, now concentrated in Tesla and Microsoft

And the central banks are out of ammo

Which is why for anyone still possessing any sanity whatsoever, meltdown is the base case scenario.

As hard as that may be to believe, amid rampant non-stop bullshit.

"The poll, released on the eve of a likely Senate vote to acquit him on impeachment charges and at the outset of an election year"




Prepare for impeachment

The State Of The Implosion

Updated: Tuesday Feb. 4th, 11:00 am

Fittingly, the fate of the casino now hangs on Tesla and the Iowa Caucus. Meaning Millenials...

Millenials chased three bubbles en masse in the past two years. However, only this last one has the ability to implode the Nasdaq. 

The Circus is getting set to explode at all time highs. There are times when it's difficult to be bearish, this isn't one of them. We are seeing record insanity in every direction. We still don't have Iowa Caucus results due to glitches in the vote counting system. Fortunately, Democrats never win elections, they merely wait for Republicans to spontaneously explode from greed, corruption, and buffoonish over-confidence. If they had to actually win an election, it would never happen.

This is the historical view of this moment in time:

"No one saw it coming"

The global casino was rescued overnight by another massive intervention by the PBOC.  Based on stocks alone one would have no clue that the virus is spreading out of control. Based upon EVERY OTHER asset class, it's a totally different story. We're only waiting for Tesla to roll over now.

Tonight, Herbert Hoover will give an update on the State of the Ponzi Scheme. Tomorrow, the Roman Senate will acquit him of record corruption.

Biblical meltdown from all time crack highs can't come as more of a surprise: 

“I’m proud to declare that the United States is in the midst of an economic boom the likes of which the world has never seen before”

"We've never seen this before"
"Fantastic"

We are seeing a level of two-way volatility that one would expect at an explosive top.

Here we see what is taking place via the S&P futures.

After the Corona Monday (Jan. 27th) reversal a week ago, the casino rallied back in a three wave retracement through last Thursday (Jan. 30) capped off by the WHO upgrading Coronavirus to a global pandemic. Then, another leg down on Friday that stopped at the 50 dma. Followed by this latest steeper yet shorter three wave retracement. 

One week to nowhere:

Here is the Nasdaq regular session at Tuesday open:

Tesla is becoming the Nasdaq:

"There’s been a huge rush of new investors buying over $700 via Robinhood in the past day. On Monday, 12,000 Robinhood accounts bought it for the first time. It’s a one-stock mania. Electronic trading systems love to interact with this retail flow. Dollar trading volume in ‘TSLA’ on Monday was a record for an individual stock"


As of 10:45 am Tuesday, Tesla dollar volume exceeds the combined dollar volume of the next ten symbols. Within big cap Tech, only Microsoft is making new all time highs

Today's Tesla moonshot is compliments of Tesla's biggest bull tacking on a ~1,000% price target over yesterday's closing price. In Y2K it was the same thing, Wall Street morons tripping over each other to raise parabolic price targets. It ended in lawsuits.

And of course a super crash. 

"MarketWatch sat down with Wood in December for an extensive discussion about how she and her team, who are active managers of a suite of exchange-traded funds, value innovation. In that conversation, Wood called ARK Invest a “deep value manager,” and in her open letter to Musk in 2018 she called Tesla a “deep value stock today.”

More insanity later in the day...