Thursday, October 27, 2016

Oil Producer Crash Bets At Decade High

ZH: Oct. 27, 2016
Producer Oil Shorts Highest Since 2007

This means that U.S. oil producers are hedged by any decline in the price of oil and can economically produce even if the price crashes...they now have economic incentive to push the price lower...

They seem to have a good timing record in the past eight years:
By contrast, speculative longs (dumb money) are all time high, and have far worse timing...

Burial by Oil:

Globalized Liquidation In Progress

The world's largest hedge fund aka. "China" is selling U.S. T-bonds, risk parity funds then sell U.S. stocks...

September 15th, 2016

The ability of risk parity strategies — which typically rely on bonds moving in the opposite direction of stocks in order to appropriately diversify risk across the portfolio — to withstand the potential end of a multi-decade bull run in debt and simultaneous slump in equities has become a hot topic over the past year.

The debate has been revived in recent months as analysts and investors fret over the ability of such systematic strategies to exacerbate swings in the market and worsen losses.

Got correlation risk?

30 year ETF (TLT) with Low Volatility implosion fund (red). The date of the above article is circled...

"What's more, the strategist thinks that 'quantitative tightening' — or the sales of foreign, typically U.S. dollar denominated, holdings by central banks (notably China) in an attempt to support their domestic currencies, which were at the heart of the last shock to risk parity portfolios in the summer of 2015 — might be back."

PBOC intervention monkey hammers stocks:
The impact on stocks due to Yuan devaluation is delayed, because it's the PBOC intervention (t-bond selling) that monkey hammers stocks. The main impact to stocks is felt at the end of each decline as the PBOC attempts to stabilize the currency at the new lower level:

S&P downside gaps confirm:

All of which means that in this cycle, China's selling is just getting started...

Reversal of Fortune

Amazon shares got slammed in extended trading after it reported earnings per share that came in far below analyst estimates on Thursday.

After hours, not shown:


Ready for vertical mode

S&P momentum

Today's failed IPO:

Nasdaq % of stocks above 50 dma

New highs


The Last Fool Was Found aka. NO LIQUIDITY

Wall Street couldn't resist dumping more shit into a weak market, so the biggest IPO of the year just imploded...

Red alert:

Maximum risk exposure
Extreme complacency
China currency out of control
Oil rolling over at record inventories
Yield implosion
Deutsche Bank dead cat bounce

It's a bad idea to price an IPO when risk appetite is collapsing...

Small cap growth / Dow:

Priced at $19.50...

"Let's try one more really big one before they panic..."


Follow liquidity...

And vice versa...

The world's largest IPO (Alibaba) cratered liquidity and they've been trading in lockstep ever since...

Volatility follows yield...

Amazon and Google after the bell...

The top performing IPO of the year...

"Don't worry about liquidity, there is none..."

Wednesday, October 26, 2016

Stoned Zombies Are Loving The Hillary Rally

Gamblers are at maximum risk exposure...

Rydex assets allocated to bearish funds:

Index put/call ratio

Option skew...

Self-Interest Is Self-Destructing

"Then infinite growth met finite planet at Terminal Idiocracy. No one saw it coming..."

The Globalized era represents the pyrrhic ascendancy of the competitive consumption oriented lifestyle. A way of life that is neither scalable nor sustainable. Mutual assured bankruptcy on an unprecedented scale, now supported solely by ponzi borrowing and money printing. Yet the profoundly stoned masses embraced it with a death grip - 2008 never even happened.

Those small local businesses destroyed by Walmart were merely a speed bump on the one-way trip to economic self-destruction. Few questioned the cost of cheap junk along the way. Then when Walmart got crushed by Direct-from-China aka. Amazon, fewer still questioned the solvency of the status quo. The 'Conomy had been successfully bypassed to the benefit of the casino. 

It was free trade and free money: The unquestioned belief in imported poverty, never once questioning why 'they' still make one tenth our wages despite making everything we used to make, except cappuccinos.

A society of industry captured whores never questions its master. Until it's way too late...

S&P earnings yield with Global GDP:

"It's called the American Dream for a reason - you have to be asleep to believe it"

The Idiocratic hierarchy of needs:

"Acceptance of facts? What's that?"

The Calm Before The Shitting of Bricks

"No blind man with his head up his ass saw that coming..."

NYSE Composite w/'Conomy aka. Fed rate:

Triple leveraged oil

The low volatility implosion fund

"Good News: We Have Achieved Terminal Idiocracy"

"Good news, home sales are back to 1960s levels, thanks to a doubling in the U.S. population..."

New home sales (red) with U.S. population blue line:

"Whirlpool is often considered an auxiliary housing play, as its washing machines, refrigerators and dishwashers are common purchases for those who have just bought a home or are doing a bit of home improvement."

Toll Brothers (McMansion builder):

Home builder ETF:


Stocks with 'Conomy aka. imported poverty