Over the last few years (ad nauseam of late) I’ve made it perfectly clear that the adulteration, perversion and more of central bank largess into the once bastion of free market capital formation known as “Wall Street” will prove itself out, morphing from “The silent hand behind the curtain” into “Not only will they no longer care if you see – they’ll announce and televise it!”
Yesterday was another of these “moments” proving my point.
Yes, “another” is the correct term, for may I remind you just this past November when the “markets” were about to cross the equivalent of a Maginot Line known as “turning 2020 negative for the year” when Mr. Powell took to the nearest camera, microphone and keyboard (probably trampling women and small children in the process) to declare (paraphrasing) “Don’t worry boys, remember, the Fed’s got your back so buy, Buy, BUY!!!” And they did. Or, said differently “Mission accomplished.”
Which brings us to yesterday e.g., Monday.
The digital ink on my latest wasn’t even dry when it appeared said “markets” may be showing a real sign of weakness. As I iterated in that missive, it appeared, last week, for the 46,365th time (and counting) the highest paying and most probable of all probabilities for today’s Riverboat Gamblers known as “modern day traders and investors” was to not only “let it ride!” but to add leverage and more, because betting against 99.9999999 odds of probability, day after day, week after week – is the only way to play. Anything else is for “loooooooo-zerrrrrrs!”
And who can blame them? Because right before the “market” opened none other than one of the most powerful people on the planet, for just like Mr. Powell, he too has a printing press for a little thing known as “Treasuries,” Mr. Mnuchin, once again (i.e., need I remind you of the now immortalized “Call from Cabo” on Christmas Eve?) put out the all important “Don’t panic signal!” stating he would soon sooth-and-swoon the “markets” back into its “champagne bottles on ice” stupor.
Below is an updated chart of my prior noting said commentary. The reason why this is so laughable to me is the fact that from a technical analysis viewpoint: The breaking out of that channel in both size and scope relative to what else was going on (i.e., smaller stimulus than expected e.g., $900B vs prior $1.8T etc., etc.) was a clear indication that the probable odds of not only further downside, but much further downside was very high. Let’s just say: 99.99999% odds in favor of such for “sh#ts and giggles” purposes as we used to say back home.
Again, to highlight my meaning here, that would mean the odds of a sudden and abrupt reversal out of nowhere had the odds of .00001% probability of happening.
And what happened? Why, what else could? To wit:
Folks – you just can’t make this stuff up. It’s all fantasy-land on steroids. Pure and simple. Or, as I also like to say…
“It is what it is – till it aint.”
If you’re one of those “Making bank” on all this lunacy? Good for you. Personally, I believe it a ruinous path to think one can outplay a rigged game, for at some point…
The “game” as does all rigged shams, will not only turn and ruin all players at the worst conceivable time, but will also turn against – even ruining – the riggers.
What a farce.
© 2020 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.