Well, we all woke up to this (typically breathless) headline from ZH:
This has led to some red tones in our own pre-market quotes, although the 0.29% drop in the ES as I’m typing this is hardly a crash of its own, of course.
The irksome thing is that the market’s irrational unpredictability is more acute than ever. Take yesterday morning for example (please!) in which it looked like it was shaping up to a nice, smooth, steady descent in equities (tinted area on the left). All was going well, and then, RIP, a huge rally based on no volume and on no news.
I’d normally be more invigorated by the miniature “top” we’ve got this morning (the tinted area on the right) except for the fresh sting I feel from yesterday’s rally. I have no ETFs of any kind, but zillions of tiny equity shorts. We’ll see……….
Poor Brazil. Their president has the lowest approval rating in the history of any elected leader in recorded history (last I checked, 8% and falling – – even lower than Obama!), their commodities-dependent economy is in tatters, their stock market does nothing but fall, and their feces-infested waterways are freaking out those planning to be in the Olympics in 2016 who fear getting terribly ill. Sometimes things are so broken, they just keep getting worse:
OK, it’s really early, so I’m not going to bother researching. I’ll just ask instead.
On Monday, the market exploded higher. Crude oil and related companies in particular vomited particularly energetically, with some stocks zipping 40%, 50%, or even more on the day. This led to a fairly miserable session for your humble narrator (whom, I think we can all agree, really only deserves pleasant, profitable sessions. I mean, he’s a nice guy and all).
The reason for this mega-rally? Simple: because the completely fake Chinese economy is falling to pieces, there was hope that the Chinese government would intervene. Since we live in totally inauthentic markets where central bank intervention is all that matters anymore (well, that, plus really retarded corporate names like “Alphabet”) bulls around the world bid up prices like mad.
Well, it happened. China intervened. They took action.
So now, as I stand here, with my dogs staring at me waiting for their walk, I ask you this sincere question: why are equities crumbling, and why in particular has crude oil lost 100% of its utterly baseless gains from yesterday? I’d really like to know. Because the world is pushing me to the point where very little makes sense anymore.
The small triangles I was looking at yesterday broke up and then retraced, so they are played out now. That has helped define the larger triangles that I mentioned which are shown below on SPX and Dow. I’m leaning towards a break up from these triangles towards Stan’s 2015 high target in the 2165 area, as long as SPX can hold the 2087 (current) floor area. SPX 60min chart: