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Never Go Full Retard – Investment Watch


by northmantrader

The recognition that this market is in a bubble (something about which I have been writing extensively) has become widespread and banks are also recognizing it.

This week, Kolonavic of JP Morgan is also climbing the alarm bell:

"The bubble we describe is expressed in equity factors … We warn investors that this bubble will probably collapse, that is, this time it is not" different "
.. some technological names are negotiated with "unsustainable valuations" backed by a record level of speculative activity of purchase options. "

"The bonds, the impulse actions and the low volatility actions recovered, pushing the valuation differential between the defensive and cyclical actions to a level 2 times worse than during the peak of the technological bubble of the late 90's"

And yes, the market continues party as if it were 1999 and the signals are increasing that the market has been completely delayed. But as everyone knows: you are never completely late. This market has just been completely delayed.

Yesterday's renewed rebound to new all-time highs completely ignoring the $ AAPL revenue warning from the previous day made Jim Cramer wonder:

The market remains in autopilot ignoring everything negative around it, from the collapse of economic growth in Asia, to the growing warnings of profit and income. I argue that the biggest problem is structural:

And the central banks are in panic mode trying to avoid the next recession. In their inability to normalize balances and rates, they themselves have done so in full delay mode, easing everywhere with rate cuts and balance expansions and daily interventions everywhere, the consequences are condemned. All in the name of defending the global economy, but in the process they have created the largest asset bubble ever seen and asset valuations are exploding upward without the support of the fundamentals.

The eventual implosion of this asset bubble will eventually harm us all since the reversal will cause the recession that central banks have tried to avoid. But due to their reckless actions, they invited investors to participate in a behavior of total delay and create market distortions whose size runs the risk that an implosion will greatly amplify any recession they tried to avoid.

Markets now depend 100% on the daily intervention of the central bank:

Without which all the construction of the market would implode.

Some signs of a market in full delay mode below:

BofA asset bubble history chart:

Price ratios to maximum sales at all times:

Market capitalization to GDP moves more than 158%, by far the highest ever recorded:

Retailer, perhaps driven by free commissions and FOMO, detecting the call options error:

Cash balances are in a minimum of 6 years:

Complacency is high as seen by the virtual lack of interest in protection:

Optimism about future returns is the highest:

Individual impulse actions are being pursued without taking into account any fundamental context, all based on future optimism.

Examples of actions to date, not even 2 months after the year:

Meanwhile, large distortions are accumulating and historical correlations have collapsed:

The relationship of equal weight to the leaders has been completely distorted:

The smart money index has abandoned all historical correlation:

And the returns against $ DJIA don't even pretend to be on the same page:

While the market increasingly depends on a handful of actions that support the profit equation as the largest market is shredding:

Yes, the market in general is correcting while the indices produce new highs driven by some actions:

Why is correcting the largest market? Because there are more and more signs that this economic cycle is in trouble:

Job offers show negative growth:

And the yield curve, now ruled out for being different this time, has been reversed again:

If this time is different, it has to be spectacularly different, as investors pursue the unidirectional mode of complete technology:

And all this, since the $ DJIA is between two massive long-term technical trends that demand an epic resolution to come:

"This time is not" different "" JP Morgan's Kolonavic says and I agree with him and I have called this market a development tragicomedy.

Will equities reach their peak here in February or March as they did in 2000 or even in March as they did in 1937? Or will this bubble worsen sustained by political interests in American elections?

We can't know until after the fact. From my point of view, this market is the most dangerous we have seen since 2000. A market in total delay mode, completely removed from any economic base, artificially driven by central bankers who refuse to take responsibility for the spirits reckless of the animal investors they have. unleashed resulting in the greatest asset bubble of our time.

Never slow down. This market has just been completely delayed.

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