Equities and Big Caps Smashed!

LK-99 A game changer!

Well for those whho did not read yesterday’s post, which was put out after the European open, we will once again show the analog that we presented here:

We did not by any means expect the Nasdaq to drop as hard as it did today or for the MEGA8s which we follow shed $290 Billion in market cap, the most we have seen in some time! However it was good timing and something we have been eluding to for awhile. Yea we know Apple reports tomorrow but WE DO NOT CARE what Apple projects, we know the underlying negative carry and over leveraged entities are getting destroyed. Without an expansion in the already piggish FRB balance sheet of $8.3T there will not be a way out of the hard landing that is coming.

Jaime Dimon can lie straight thru his pearly whites and say we need more rate hikes, but of course he would. JPMC is the defacto vacuum for all the other low lying fruit banks to fall into, he knows, it, we know it and nobody cares about Dodd Frank Section 165 and deposit concentrations. It is the old bible verse,

“To those who have everything, everything will be given, to those who have nothing everything will be taken away”

Isn’t this the WEFs motto also, you will “own nothing and be happy!” So there is a lot going on and we have to say we aren’t sure what rabbit trick the bulls will use next to keep the game going. One thing we know, the SP500 chart and the Nasdaq Futures charts are telling us to sell, bottom line. Here is the SP500 chart getting dangerously close to re-asserting itself into the prior trend channel:

As far as the bond market, well the curve was well bid on the downgrade, but that was just an excuse. This move is the precursor to timing the recession, we expect the curve to steepen to force the FRB to end their rate hike campaign as things begin to degrade and degrade fast. We can see the higher or steeper US bond curve trajectory here:

It bottomed out in early July and held again in late July and now turning up. As far as today, here is the curve picture of the US treasuries market:

Steeper across the board with the 2s30 +7bp, there is a long, long way to go here!