Folks, the entire quarter was punctuated with below normal volume, higher bond yields, and massive distribution by large accounts on higher moves.
Cheered up yet?
Two charts truly sum up the problem and it has nothing to do with the .com, er, fiber optic, er, FAANGS….
Major Financial Stocks
The major financial banks and systemic operations are looking about as depressing as hell as summed up by the XLF:
Unless the financials figure out how to force the Fed to start large scale bailouts of bond holdings, then sucker has a reasonable chance to break this year’s lows and head towards the December 2018 party time.
Regional Banks
Everybody party like it’s 2008, right?
Thankfully there is no way we could repeat what happened last spring, uh, er, oops.
The market is going to bide time for a week, probably rally for a few days but with massive underlying distribution. The big boys will talk up massive rally potential (that means 5 Tom Lee sightings on the bubblevisions at a minimum) then all hell starts to break loose.
Because it isn’t about equities now.
As I’ve been saying for a few weeks in the FinTwiterverse (Financial Twitter):
“When the Fed refuses to fight inflation with higher interest rates, the bond market will do it for them.”
The loss of faith and trust in the Fed plus a massive abandonment of long term bond purchases by unfriendly nations to the US will result in the correct rate assessment pursuant to the real rate of inflation.
Rocky times are ahead, prepare yourself accordingly.
Tomorrow night, I explain why gold and silver as an investment are doomed.
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