iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,345 Blog Posts

Presidential Elections Continue to Wreak Havoc on Stocks, Multiple Sectors Approaching Bear Market Territory

Forty percent of the Nasdaq 100 is comprised of a few mega cap stocks: Apple, Amazon, Facebook and Google. Although those stocks have been somewhat resilient in their share price declines, over the past month, the same cannot be said about your average, run of the mill, security.

In what can only be described as the most controversial election in a generation, maybe two or three, stocks have been getting hammered for the better part of the past month — also logging some serious declines over the past three. Amongst the hardest hit are the healthcare stocks — names most readily targeted by Hillary Clinton, most likely because she knows Obamacare needs reform and part of that reform means lower profit margins for big pharma.

boom

At the same time, the bond market has been getting crushed, on renewed fears that the lunatics at the Fed are leaning towards hiking rates in December.

As of tonight, there is a 71.5% chance the Fed will hike in December.

fed

Inside Exodus, I monitor the risk of the market through my ‘Bubble Basket’, which is now breaking down in magnificent fashion.

bubble

Although dozens of sectors are down more than 10% on a median basis and at least 10 are approaching bear market territory, it’s likely the carnage will continue — unless the Fed reveals a more liberal approach to policy — which will provide markets with the appropriate tinder needed to start a short squeeze.

As you can see by recent earnings out of GPRO and FIT, the consumer isn’t going to save Xmas, and there is appreciable downside risk to the retail sector from current levels. For the better part of 2016, we’ve been ignoring the problems in the economy — slowly marching higher to new highs, in spite of the fact that fundamentals were worsening.

Gun to the head play: gold, bonds and short stocks into Xmas and cash out in early 2017 — after a monstrous drop in January — fueled by FX dislocations in China.

In short, tread carefully.

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20 comments

  1. berniecornfeld

    ooooh Stock talk!! I have wood.

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    • Dr. Fly

      Give me a break. I’m pumping out content like a fucking God.

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      • cancel19

        Dr. Fly, please don’t listen to all these pussies that can’t handle the truth!

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      • berniecornfeld

        Quantity does not equal quality. I only come here for the market commentary. Other than that I am forced to troll.

        Carry On.

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        • Dr. Fly

          Not my problem you’re butt hurt Bernie. I’ve put out my best writing and best work ever.

          Your backhanded comment can fuck itself along with its author.

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        • tha pirate

          Are yee a swab Bernie? Arrrr! Some of us actually CARE about the USA not only out of patriotism, but out of something even a Wall street whore should understand – SELF INTEREST.

          What good is all your profits on Wall street if the country gets sucked down the drain due to corrupt leadership? Some of the big money firms that support someone they even believe themselves is corrupt sicken me. Stay on board with the Cap’n laddies, let’s keep the good ol’ USA strong and keep our priorities straight!
          Arrrrrr.

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        • juice

          Bernie, if MSM put out the truth, no matter how inconvenient to those who believe in fairy tales, le Fly, truth-teller that he is, wouldn’t have to.

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  2. probucks

    what the he’ll has been happening to TLT.

    my analysis had this area as rhe unlikely but possible downside scenario. smh. who the he’ll sells LT Treasuries into a rate hike?

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  3. 12jc

    The consumer isn’t going to save Xmas? Does this mean the consumer isn’t going to be loading up his car with useless trinkets from the mall that were made in some third world country by slave labor so as to enable the megacorps can buy back stock and pay their c-suite goons outrageous bonuses while they partake in the stock option scam? Trinkets which will probably be broken before the consumer even gets home? Say it ain’t so.

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  4. wolfdaddy

    You don’t think we will have a short term turkey bounce? Has it ever been cancelled?

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  5. ironbird

    Notice those four names that take up an absurd 40% of the QQQ. Globalist scumbag slave labor whores all. Cue the fucking crash if the Orange God wins.

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  6. john_galt

    No Santa rally? That would indeed be something unreal.

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