Tuesday, May 31, 2016

The Third (Last) Detonation Sequence Is Underway

The first two (August/January) didn't garner much attention, but this will...

JPY was notably strong overnight versus the dollar and the Yuan. Meanwhile oil is down -2%, hence 3x leveraged oil is down -6%:

Yen / Yuan (with S&P)
China and Japan combined are spending asinine amounts of money to prevent this from happening...

Globalization unwinding:

"It's a simple formula that applies to all politicians, whatever they say, believe the opposite"

On a totally separate yet 100% correlated note, I was reflecting on what it means for Amazon and the other internet stocks to be outperforming at this late stage...

Internet Fund

Nasdaq 100

Up next, the running of the bulltards
No sound necessary...

An Idiocracy Never Learns

That's what makes it an Idiocracy...

The 1970s "stagflation" was the wakeup call that developed nations could not compete head to head with the Third World. Overuse of fiscal and monetary stimulus were attempting to compensate for a lack of competitiveness. The Post-World War II Demand-side "Keynesian" world order was over. 1980, enter "Supply Side" economics. *Free* Trade, was the solution to everything. Lower taxes would pay for themselves we were told. Then a decade later, the Federal debt had tripled, at the fastest rate in U.S. history. Time to reassess. Hell no. Double down on *Free* trade and inject more monetary stimulus. Y2K Dotcom bubble and China WTO accession, time to reassess? Hell no, triple down on *Free* trade, and go to 1%. Housing bubble and bust. Time to reassess? Fuck no, 0% for seven years and stock buybacks in place of revenue. 

EconoDunces think that making cappuccinos is as good as making semiconductors. AND they think that Central Banks set interest rates.  

Sadly, neither of those assumptions is true. However only when they lose their jobs will they realize they were always just dunces...

Going out of business visualized:
Fed Funds (interest rates) with capacity utilization (red):

The stock buyback "Achievers" Fund
This lesson will be tattooed on the Idiocracy. Stock buybacks do not compensate for collapsing revenue, they're the smoke and mirrors that allow insiders to cash out prior to collapse...

And -50% Flash Crashes are not "normal"

For the record, George HW Bush lost re-election in 1992 primarily because he tried to raise taxes. He was one of the only non-believers in PonziNomics in his party, although he lied about it. His son of course further lowered taxes for the ultra-wealthy, all paid for with debt, followed by a mega-crash and a doubling in debt. A mere harbinger of things to come...


The Biggest Short: China

Someone should inform gamblers that a short on China is a short on the "status quo"...

Short interest in one of the largest Hong Kong exchange-traded funds tracking domestic Chinese stocks has surged fivefold this month to its highest level in a year, according to data compiled by Markit and Bloomberg. The last time bearish bets were so elevated, such pessimism proved well-founded as China’s bull market turned into a $5 trillion rout.

The Chinese currency is heading for its biggest monthly loss since last year’s devaluation as the nation’s economic outlook worsens and the Federal Reserve prepares to raise borrowing costs, driving a rally in the dollar.

Short interest in the CSOP FTSE China A50 ETF climbed to 6.1 percent on May 25, the highest level since April 2015, two months before Chinese equities peaked, and up from 1.3 percent at the end of last month. Bearish bets in the U.S. traded iShares China Large-Cap ETF jumped to a two-year high of 18 percent of shares outstanding on the same day, up from 3 percent a month ago, data compiled by Bloomberg and Markit show.

Even as Chinese equities rallied on Tuesday, traders were rattled by a sudden plunge in index futures.

U.S. listed Chinese stocks versus Hong Kong Hang Seng Index

"No hedging and no big orders allowed"

Last night:

"Futures exchange urges investors to pay attention to liquidity"
"A single investor caused a -12% Flash Crash while attempting to hedge"

“Liquidity in the market is really thin at the moment, so the market will very likely see big swings if a big order comes in.”

Two weeks ago:

May 17, 2016

A two-minute plunge and snap back by Chinese stock futures in Hong Kong has added to the nervousness in the city’s market, amid concerns over China’s economy.

Dressing Up Smart Ahead of Third Wave Detonation

Because it's better to look good than to feel good...

Skynet ran the stops above 2100 for month end window dressing, gave most of it back, but then moon launched the futures to save the month aka. "bonus accrual". I mean "rebalancing" upwards.

There's nothing odd about this...and Skynet can always sell high after hours, we know that much...

Berkshire got smoked into the close...

Exxon and oil rolled over as one...

Single leveraged oil

JPY rolled over as well

On Balance Volume

At the lows today, Amazon was the only mega cap that was green...

Biotech was the leading sector again today

Step 1: Triple Leveraged Oil Rollover

I mean what could go wrong?

Last day of the month recovery high on no volume. Why not?

One gap filled i.e. today's

Consumer staples are lagging

Volatility is perking up

A new all time high in Amazon is all that matters

The Final Detonation Sequence: The Week Of Lies Exposed

Police Squad is reloading for the third attempt to collapse global markets...

"My sense is that markets are well-prepared for a possible rate increase globally, and that this is not too surprising given our liftoff from December and the policy of the committee which has been to try to normalise rates slowly and gradually over time,"

December? You mean the one that precedes January?

The Federal Open Mouth Committee continues to take EVERY opportunity to inform global markets that they're ready for a rate hike. Meanwhile, fully to the contrary, China reminds the Fed every day that they're not ready for a rate hike, by devaluing the currency. The rest of "RISK" idles on the sidelines on minimal volume. Something has to give. 

Last night the CNY dropped yet again, now approaching the January lows...

Outflows remain hot and heavy...
Meanwhile, the chasmic gap that opened up between BitcoinUSD and BitcoinCNY narrowed overnight, but still remains 5% wide. Someone who knows what they're doing could buy BitcoinUSD, exchange it for BitcoinCNY, and convert back to USD for an instant profit, 17,000% compound annualized. Assuming they were willing to own CNY for a few minutes...

Also this week (Thursday), OPEC meets in Vienna to inform 3x leveraged oil speculators that the freeze no longer exists and neither does OPEC. What could go wrong?

Lastly, on Friday is the May jobless report, which according to Zerohedge has the potential to "surprise" to the downside

Meaning, yet another lie exposed.

All of which lies and chicanery can be summed up thusly:

World ex-U.S.

And finally this:
U.S. Recession stocks:

Monday, May 30, 2016

The Idiocracy Doesn't Believe In Reality

Despite all of the negative headlines, the corporate media mannekins still haven't put one and one together. They view every piece of information in total isolation. Plausible deniability being the opiate of the profoundly stoned masses...

Why? Because they learned nothing after 2008. Sure, at first they were fearful. Then they turned cautious. Next they were skeptical. After that came acceptance. Now they're 100% bought in to this asinine delusion. 

In the interim, they could have saved a bit. Maybe paid down some debt. Become a thinking human being rather than a conformist consumption zombie. 

None of that happened. Therefore no amount of facts and data will convince them of anything. They are blind to risk. 

The seeds of mass panic have already been sown. Reality is not an option.  

Volume momentum:

Low volume days (red line). Narrow range days (circled):
Thursday was the lowest full day volume since August 2014...

On Balance Volume (Advancing - Declining):

Price / volume

Russian Roulette With An Automatic

I think blogging time is going to be over soon...this clusterfuck is in sudden death triple overtime...

The leading sector last week was Biotech

Brewers were the second strongest sector
Identical to 2008:

A 230 year-old brewery that's 4x overvalued. Nothing to see here, move along:

Bonus chart: Netflix