The more I think about it, the less sense it makes. There isn’t a scenario in the world when stark raving mad deflation is met with soaring equity prices. When corn, gold, and wheat plunged, oil traders said nothing because oil was trading at $100. Now that oil has been destroyed, equity holders are silently watching, thankful for elevated, inflated, equity prices.
The deflationary boogie monster is making the rounds. Let’s not kid ourselves: nothing and no one will escape it, which is why I am 100% certain another round of QE will be needed to save us–once again. There are so many mixed signals out there, it’s hard to tell reality from fiction. But, what’s tangible and real is stock price performance, year to date–albeit a young year indeed.
What’s working and what’s not?
Not Working (greater than -10%)
Oil, steel, semis, banks, farm and construction, alt energy, specialty retail, dry bulk shippers, personal products, industrial equipment, credit services, application software
Working (greater than +10%)
gold, silver, biotechs, drugs, chinese burritos, oil tankers, restaurants
Now let’s analyze, shall we?
The weak stocks represent global growth, industrials, consumer oriented retail, software, banks and credit.
The winners represent wanton speculation in chinese black boxes, biotech lottery picks, oil tankers as a result of plunging oil prices and a few restaurants who benefit from lower crude.
Without a doubt, we are off to a dreadful start for 2015 and all of the early signs point towards a market that is on the verge of correction. Considering the extent that commodities have corrected inside of the deflationary vortex, if we are to go down, it is going to be a brutal and vicious affair–swift and barbarous.
Sleep tight.
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FIG
May it be quick and swift. Like electrical tape being ripped off the mouth of an ISIS hostage.
You might get your tragic ending after all.
Congrats
Have Faith. I fully expect an attempted quick save by the Central Bankers.
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NOT that funny !
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I am sorry. Bad Karma.
I do believe you are correct, and this time potentially without the v-shaped one-week bounce back and new highs….
I am 60% long S&P equivalents…will pick up some hedges tomorrow.
Dr Fly, on my Twitter, right below your tweet to this bloggery, was a link to this Zero Hedge snuff-pic. Have to admit it *is* striking…. http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/01/20150113_copper8.jpg
UB, seems like no one is talking about the on-going crash in copper, which as I’ve been told by people smarter than me used to be a leading indicator.
Everyone is so fixated on crude that they’re missing the epic copper crash of 2015.
Quality – its quite striking. Was looking so good to me at one point last summer. Would expect the copper mines here in the southwest will or have been laying off. Much like the shale workers, more higher paying jobs that won’t be paying….
Yeah it’s pretty troubling to see what’s in store for our economy.
Fear & Greed Index is only at 32. This time it feels like everyone is asleep and about to get hit by a freight train. Back in October, or in other times where we traded in such volatile conditions last year the fear and greed index would be below 10, if not close to 0.
A 20% correction, if not more, quite frankly is needed. Who the hell wants to buy stocks hand over fist up here in outer space? Even some of the most bullish commentators have acknowledged this market is among the richest markets in history, relatively speaking. If you’re buying stocks up here you’re playing for the blow off top, which seems like a silly idea in all honesty. Even if you get it, it seems like a dicey bet.
Now if the FED comes in with some BS QE4 type program then by all means lets buy stocks and snort coke off hookers backside.
I will join you. Especially in the coke off of the asses of ladies of the night.
If we correct, I’m snorting coke, since I’m 100% short here. If we get QE4, I’m snorting coke since stocks will go interstellar.
It’s a win-win situation.
I agree the only way is to be short then cover and go long on QE4 like PTJ would do.
wage inflation
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“Without a doubt, we are off to a dreadful start for 2015.
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Liam Neeson has now released “Taken 3” !
Enough said !
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Saw it. meh!
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🙂
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biotechs, treasuries, reits, utilities, transports, ..same ol’ stuff that worked in 2014
Flight to safety, obamacare not going away, perpetual Europe weakness, fed not doing anything, cheap oil keeping inflation low
How do we play it? In the olde days the darkside was embraced in these hallowed halls. Letting accounts get incinerated was deemed unsuitable.
With Dr. Copper crashing, SMH is probably the next block to drop. Looking at moving into SOXS here
The ground is electric. The earth is shifting. The only thing that I can think of that is more worthless than the over-priced real estate and bad mortgage loans of the new millennium are billion dollar pedestrian tech companies and the pharma-bio research fellowships promising “the cure” for being human.
not sure why the transports are so strong. It’s trains, planes..stuff like that. Not exactly groundbreaking industry. it;s not falling oil, because transports fell with oil and transports were strong whens oil was in the 100’s in 2013
Very cute avatar by the way. Regarding transports, people are getting out and about and they have to move their “stuff” hither and yon but there are moments in time when it all, temporarily, comes to a screeching halt; then assess and shift if you’re not too boxed in.
According to available info regarding QE, the Bernank led Federal Reserve purchased $4.5 trillion in assets through October of last year. How does this correlate to the increase in market value of equities? Lockstep? Or have equities inflated at a percentage above/below that 4.5T since the 2007-08 debacle?
Bluestar your title no longer applies.
I will wait for QEurope. Patiently. As I wait for oil to recover off this exponential drop to sane prices. It seems I have become the contrarian (long in a bull market, how ironic)
This market is not dead yet. We have come to far to sit by idly and watch it burn down
I thought it was 1998?
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Okay, as we plan our “trading bias” for tomorrow …
Let’s see … to recap …
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Rock breaks Scissors …
Paper covers Rock …
Scissors cuts Paper …
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Place your bets !!!
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Will everyone take a fucking pill.This the
U.S.A.It’s not a one trick pony.Jobs are up,more cash than anyone,banks are lending,people are spending .Let the oil bullshit level out and were back in business.
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I shoulda been a Sportscaster …
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Read the other day that Jim Rhome makes about $30 million / year !
I like Rhome but $30 million … REALLY ?
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Nobody else comes close to Rhome !
Costas, Michaels, Patrick, Berman …
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Only in America !!!
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err … “Rome” …
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This is what gets you $30MM.
https://www.youtube.com/watch?v=gEaQ-NU38GY
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My neighbor across the street actually has a service called “Doody Calls” …
… that comes twice a week to remove any and all dog poop from their property !
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That’s a career I would NOT enjoy !!!
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Rome sells advertising. That’s why he gets paid. He gets the listeners, they are a prime demographic and worth a bunch of money to advertisers. It’s success in America.
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… the thing that jumped out with Rome was the HUGE difference in yearly salary with Rome and the “household names” like Costas and Michaels and Berman !
Rome at $30M …
… the others in there at around $5M !!!
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I was shocked !!!
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… the dude’s makin’ Rush Limbaugh money !!!
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Dude is syndicated nationally and owns his own show. This is why Oprah makes so much money. She owns the content. Al Michaels is merely an employee. Whoever owns the content makes all the money.
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… I get that … and you are correct !
Nevertheless, I was taken aback that Rome would be … not only at the “top of the mountain” … but, so far UP at the “top of the mountain” !!!
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Obama will save us.
Well you know my take: Do the opposite of Bluestar every single time.
Just keed, just keed.
Look so tomorrow probably trades lower, maybe the week too, we knew volatility was picking up just by dint of the selloffs a few days back. Big picture nothing macro has changed.
Anyway:
REITS: Strong
Housing Related: Strong
Equities (as a group): Strong (within 3% of all time high is a blip on the radar)
An commodities crushed already meaning catalyst for market selloff has come and gone.
Dollar stronger and getting stronger, same with Bonds. Neither move is done yet.
Nothing good has changed macro since 99. Other than a shale oil boom and trillions of free money to the banks who lend it to corporations. One does not need to be a bear shitter to see the truth. Markets need more coke. It is that simple.
All I know is that I was going to get $TSLA puts yesterday but opted for others… son of a bitch.
Looks like i will not get my chance to hedge….bummer.
It still may be a good hedge/short from here, Huggie.