What has happened with the /RTY over the past fifty hours has been extraordinary. On Wednesday, based on the obviously fake government data showing inflation is gone (check your grocery store to verify this), equities absolutely exploded higher, with small caps leading the way. I figured it was game over, man.
But impermanence rules our lives. Look at Kristi Noem, for example. At one point, she was a cheerful, fresh-faced farm girl with big hopes and dreams. The very heart of the midwest!
Now she has mutated into a plastic-surgery-loving, cosmetics-gooping, Senator-arresting, puppy-killing ogre whose soul she has sold to the devil. You can see it smeared across her eyebrows.
I mean, honest to God. I’m way older than she is, and I don’t shame myself into rushing off to a surgeon’s scalpel or buying a lot of cosmetics. I’m aging gracefully, plus I’m not running around killing animals with a gun. It just isn’t my style to be horrible. This, however, is the very face of evil.
And as for her precious right to bear arms, I dunno, if my arms looked like this, I’d seek to repeal the 2nd Amendment with all due haste. Gross.
Anyway, what was I talking about? Oh, yeah, the small caps.
Anyway, after the aforementioned mega-spike, it was all over but the shouting. The /RTY erased its entire spike, then it sank below its major Fibonacci at 2150. The bulls (which, remember are 9,999 out of every 10,000 people) fought to push it back, but the Fib had changed to resistance, so prices started to sink again.
Yesterday evening, it cut hard through another line, only to try to rally again. I was watching that lower red line and, God be praised, it held as resistance too. Suffice it to say my IWM puts are very pleased.
Looking at the longer-term /RTY, you can see we are, as I already said, below the $2150 Fib and have PLENTY of downside potential before major support. Maybe Iran will field-test one of their nukes on Israel or something.
I’ll put it this way: the bulls (I say again, 9,999 out of 10,000 people, and that’s on the low side) had EVERY gift given to them this week. They had a resolution to the China/US trade dispute. They had an ice-cold CPI. They had an ice-cold PPI. And yet, well, here we are.
The big event next week (besides the nuclear device) is going to be that joke we call the FOMC, and who knows, Powell might just bend the knee to President Braintrust and knock 25 basis points off rates. I’ve said it before, and I’ll say it again: to the three bears left on Earth besides myself, the DREAM scenario would be for Powell to cut rates and, at the figurative and literal end of the day, to see the market sink. And that point, it truly IS game over, man.
May the good guys win.
