12.06.20 05:00 ET
Despite the ongoing debate on financial propaganda television about the role that retail investors are “moving” markets or inspiring foolish investment decisions by new portals like zero commission trades online or apps like Robin Hood (aka, the Hoodies), the reality is that what happened today was about the big boys just like it has been the last week.
Mom and Dad are not moving these markets with their 401K’s. The Hoodies are being played up in the hopes that Wall Street can find a fresh batch of suckers to unload crap on; made even more incredulous with even this astonishing story via ZeroHedge tonight:
“The Most Absurd Moment In The History Of Capital Markets”: Hertz Plans To Sell Up To $1 Billion In New Bankrupt Stock
It’s a must read to demonstrate just how massive the bubble that Jay built really is. And it is so stupid it takes one breath away.
The narrative is that the big boys got it wrong and piled into the market at the last minute and that retail was riding their coattails. That might be true to some degree, but not to make the markets move like they have in the past 60 days. To make what has happened even more interesting according to Scott Minerd of Guggenheim on CNBC today, the market is about to get a lot worse where he stated that he did indeed expect a retest of the lows and violation down to the 1,600 area on the S&P 500.
Needless to say, I find it hard to disagree with his arguments.
Thus with the volume we have seen the past week, there is a caveat one never hears from the perma-bulls and that for the volumes we have witnessed it would appear that first a rotational distribution started last Wednesday and now is a full blown liquidation of some big boys into safety and taking the profits they have juiced in the past 60 days while recruiting new bag-holders.
For example, the 10 year US Treasury does not make this dramatic of a move in under a week because your Uber Driver says it’s time to duck into safety:
That move only happens with tens, perhaps hundreds of billions of dollars piling into the big safety trade and indicates that worse things could be happening soon.
Maybe Ma and Pa piled into the WTI oil trade, after all the “story” is that demand would pick up and shale would recover quickly:
Or it’s just the speculators taking the rookies for a ride. I should know, been there, done that and it’s easy to get screwed by the big boys on an educated and logical, but incorrect investing guess.
Lastly the biggest of moves was an almost 48% increase in the price on the VIX today. Just wow:
That move was not accomplished via the Hoodies hedging. This means some very big players are starting to smell the B.S. that Jay was cooking and seeing that Trump’s political weakness displayed via his inability to reign in the riots in his own front yard in addition to a paralyzed with fear weak kneed Senate may result in massive economic uncertainty.
And uncertainty breeds fear.
Fear breeds Hate.
And man oh man the short little green guy that smells like a frog was right, the markets are going to hate what happens when the real second wave hits this fall and the geopolitical and economic instability which will follow.
Buckle up ladies and gents, it’s going to be a fun, fun, but cruel summer.