The blow-off stock market top, well, keeps blowing off. What a crazy ride, a long strange trip, it has been for the last couple months as illustrated by the bowl of spaghetti above. Truckin'. Stocks rally off the April low as traders begin sniffing out rate cuts in the offing. The Fed's easy money flows into the stock market making the wealthy, that own the stock market, wealthier. Don't you love crony capitalism filth? It's great if you got money and are in the stock market; not so much if you are a common American peon that does not own any stocks. Sucks to be you. The divide between rich and poor in the United States has not been this wide since the !970's.
Anyhoo, stocks rally as expected into August but become toppy and over exuberant as the lizard king, Fed Chairman Greenspan, said in December 1996. The dot com bubble did not pop for another 3 years. This is what analysts say nowadays to keep investors in the market; while the institutions sneak out the back door. They say buy, buy, buy, because a blowoff top will not occur for another couple years. The three brown circles show textbook distribution days. That is the smart money selling to Joe Sixpack, Carmelita Bagholder and Antonio Sucka.
The analysts and strategists on television paint a rosy picture as they tiptoe away; pump and dump. The blue circle shows that these last three massive euphoric bullish rally days could not produce volume, on any of the days, that surpassed the negative selling volume from last Wednesday. Volume should catapult to the moon for a robust rally; instead it languishes as the investment banksters tell you to put more money into the stock market.
In August, at Jackson Hole, Pope Powell brings the tablets down from On High and tells everyone that rate cuts are coming for as far as the eye can see. The stock market never looks back running higher like a banshee. Powell delivers the first rate cut in mid-September so it is more rally time as America's wealthy dance with glee, making money effortlessly, celebrating the Federal Reserve's money-printing, while they spit on the masses.
The top appears early this month and is an easy call with the rising wedge pattern, universal negative divergence, overbot conditions, loss of the strong rally, price overextended needing mean reversion, and sentiment remains off the charts bullish. She takes the dive on Friday, 10/10/25, and the expectation is that a multi-day and multi-week down move for the stock market should begin. But alas, the stock market uncouples from technicals entering a new phase.
Stocks recover after the mid-month slump because of the uber bullish sentiment, complacency, fearlessness, and belief that stocks will never go down. The dip-buyers stand ready to buy even the smallest retreat. It is fun to watch. Financial commentators vie daily for the Irving Fisher award (he told everyone the stock market was at a permanently high plateau--right before the 1929 crash). Goldman Sachs says this morning all is fine for lots more upside. CNBC commentator Jim Cramer says ignore the comparisons to the dot-com bubble top and instead buy, buy, buy. It is funny stuff.
The stock market creeps higher in anticipation of the inflation data that dropped last Friday, 10/24/25. The US government is shutdown due to the corrupt demopublican and republocrat politicians so data is as scarce as hen's teeth these days. This placed enormous attention on the inflation data that was relatively in line but immediately perceived as tame and the inflation data orgy gap-up higher move occurs. Wheeee! Whoopie! Pass that jug of Fed wine. Wheeee.
The orgy feeds into this week that was already expected to move stocks higher since stocks are bullish 80% of the time in front of a Fed meeting and rate decision. Adding further hype and euphoria to the stock market, King Donnie proclaims that the US and China have a framework trade deal. All the word framework means is there is an outline of things to discuss. It is all theater and stagecraft.
Nonetheless, the US/China trade deal orgy creates the gap-up move in stocks yesterday. It is a wild time. The SPX, S&P 500, the United States stock market, prints an all-time high in history at 6877.28 and new all-time closing high at 6875.16, on Monday, 10/27/25.
This orgy activity creates short-term strength as shown by the green lines but the chart will simply set-up for a top again. Stochastics remain overbot. The maroon lines show that neggie d remains for the price move over the last month despite the orgies. The last 2 weeks are driven by news and emotion and this continues for this week. The Fed begins its two-day meeting today and the rate decision and Chairman Powell press conference is tomorrow afternoon. Obviously, the presser will move markets one way or the other.
Ditto for Thursday when King Donnie and dirtbag Dictator Xi meet to discuss trade and tariffs and confirm the happy talk, or maybe not? Thus, mathematicians say thus a lot, that is why we are never invited to parties, even if Powell's presser sends stocks one way or the other, the next day King Donnie may reverse, or reinforce, the directional move with the China trade deal news. In other words, there are a lot of balls in the air and we find out this week if any will drop.
The ADX shows that the rally this year was a strong trend higher (pink box) into August but that is when it petered out. After the mid-September rate cut, the ADX tried to reestablish a strong trend higher, but could not, and then again early this month tried to reestablish the strong trend, but again failed, and the ADX is now down in the basement at 20 unexcited and unimpressed with the orgy moves higher in equities.
The Aroon shows that all the bulls, and comically, all the bears, were 100% bullish the stock market as the spankdown was received 2 weeks ago. The bulls remain euphorically 100% bullish anxious to buy any and all dips, while the bears are waking up from hibernation with about half of them now negative on the market.
So what is next? You have to wait for the hump day and Thursday dramas to play out and then we can see where the stock market will top-out in the near-term and determine if the bulls were able to stretch THE top out for a month or so more.
It is interesting to see lots of layoffs occurring this month but not surprising. Decades back, companies would sh*t-can workers the day before Thanksgiving; no one gave a crap. But this took on a negative tone in the 80's and 90's and into the new century. Companies would receive bad publicity for throwing people to the curb right before the holidays. How could they be so cruel and heartless like Ebenezer Scrooge? Fred was such a good worker and he has a child with physical needs! How dare they be so cruel!
Well, companies are keenly aware of perceptions and marketing these days and layoffs in November and December are pretty-much taboo because no one wants to be called Scrooge. So what does that mean? You get the dead weight out the door in October before the holidays plus you do not have to pay them for the holiday pay.
If you are worried about getting laid off, all you have to do is make it through this week and say Monday and Tuesday. If you do not get sh*t-canned, and told to take your family photos, plant that needs watered, and change for the coffee machine, and get the Hell out, by next Tuesday, 11/4/25, you are likely safe until January. The company made the decision to keep your dead arse around and pay you for the holidays.
However, you will have to watch carefully to see if more work (backlog) comes into your company. If not, you will be axed in January. If so, you will get another reprieve. All of you young people have not lived through a recession and bad financial times in your life yet, the COVID-19 pandemic was a special situation, so you have quite a life learning experience ahead for yourselves. You will learn a lot about yourself and what you are made of.
Keybot the Quant remains long and is focused on financials and volatility as the two most important drivers of the stock market currently. Retail stocks and commodities are also key. Keystone is holding index shorts on the broad stock market that are underwater currently. It will be interesting to see when the quant decides to go short. Keybot only sees 1's and 0's and trades completely devoid of emotion.
So that is the story over the last few months especially the last two orgy days. The AI hype got us here as we discover that much of it is a circle-jerk among the key players. They will all rise, or fall, on the artificial intelligence craze. It may be artificial and far too overhyped. AI is not going to unclog your toilet during a party, or replace your roof, or cut your hair. The fancy NVDA chips are going to be yesterday's news in a few months, say a couple years, so the clock is ticking to justify the billions and billions of dollars spent on the fancy chips in the AI circle-jerk. Applications are a ways away, and then training and software debugging will be needed, then implementation, so it is hard to believe that something of significant use will come from AI within the next say, 24 months. All those billions on stale chips may be money that goes up in flames.
A human needs food and water, shelter, and clothing; the bare necessities to survive in the world. People have become far too reliant on technology. In a recession, many of you will have blisters develop on your hands for the first time. Hurricane Melissa is hammering Jamaica, man, or mon. Melissa's can be sweet, but deadly. Melissa by Gregg and the gang. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 5:29 PM EST: Scamazon sh*t-cans thousands of workers as do many other companies. Layoffs are in the news today. Of course they are. Companies are throwing people out the door in October so they are not accused of being heartless if they do it in November. Plus, the companies do not have to pay holiday pay for those deadbeats. What happened to all the planned holiday hires? Keystone saw an elf panhandling on 5th Avenue the other day and Santa was drinking at the bar unable to find work. Of course, Amazon and other companies are saying that AI is the reason that folks are given a pink slip. How convenient. If you are a manager, and have to can people, of course you can blame that big unknown boogeyman called artificial intelligence. A lot of job losses are not due to AI, they are due to a slowing economy. Companies also get rid of people that do not fit in or get along with others (in other words, they do not kiss the boss's *ss enough), and of course the deadbeats and deadwood. There are jobs in the short-term that are toast due to AI such as researchers since the chat-bots can take care of all that now. Also, call centers, although the experience will never improve. Billions are spent on chips in the AI circle-jerk to put a young lady doing internet research out of a job that only made minimum wage. NVDA CEO Jensen proclaims today that AI is the official Second Coming. NVDA stock pops +5% sending the stock indexes to new record highs. The SPX new all-time high is 6911.30 and new all-time closing high is 6890.89. The screenprinter handed out "SPX 6.9K" hats but said time is of the essence since he must print up thousands of "SPX 7K" hats. The analysts will end up correct above SPX 7K as stocks melt-up on AI hype, China trade deal hype, rate hike hype, low inflation hype. Dear God, it's beautiful. Irving Fisher declares that stocks will never go down again. Pope Powell is picking up his dove wings at the cleaners for tomorrow's big rate decision and presser. He is a white-winged dove ready to drop easy money onto the laps of America's wealthy to make them richer. Edge of Seventeen. Watch the banksters and volatility.
Note Added Thursday Evening, 10/30/25: The SPX prints a new all-time high at 6920.34 on 10/29/25 and the all-time closing high holds at 6890.89 on 10/28/25. The SPX drops to 6822 today. Chairman Powell says a rate cut on 12/10/25 is not a done deal so stocks become soggy. Stocks are unenthusiastic since the crony capitalism filth system needs easy money to make the wealthy class more effortlessly wealthy. Tech earnings are not as great as expected creating sogginess in the stock market but AAPL and AMZN happy earnings this evening may stabilize stocks. The US/China trade deal is a joke. King Donnie folded like a cheap suit since the communists are holding the rare earth elements and minerals over his orange head. Obviously, Donnie did not consider the ramifications and secondary effects that occur due to his tariff games. China is supposed to buy soybeans over the coming years but that looks like smoke and mirrors. Tariffs are cut for China so Donnie looks like he returns to America with his tail between his legs. Further, Dictator Xi pats King Donnie on the head and tells him to come to Shanghai in April to do some more commie butt-kissing. Trumpski says he did not talk about NVIDIA's Blackwell chip after he hyped it ahead of time. More smoke and mirrors and baby games. Traders and investors are starting to look around at each other and ask how did we get up this high and how do we get back down? It is the Tower of Babel in Babylon. New York Dolls.
Note Added Thursday Evening, 11/20/25: The broad stock market sells off for a few days and takes the pipe today with the SPX dropping down to 6538.
Note Added Saturday, 11/22/25: The SPX drops to 6521 intraday Friday and then ends the week at 6603.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.