GFBP Continues Hedged Short as Market Extensions Continue do Defy Gravity

Nasdaq profit taking and new sellers at the end of the day?

We have to admit and its something the market keeps hammering home, that is no matter what fundamentals say, no matter what technical analysis says, that at certain times markets inexplicably exhibit euphoria. The NASDAQ is currently one of those indexes. It has been the obvious choice for capital flows and why not Tech is the future and nothing stops the future from coming. We get it, but we also know that in mathematics, the greater the rise, the higher the nominal dollar value to continue to purchase said asset rise. (increasing the cost)

Yes we know the FED more than doubled their balance sheet, yes we know the PBOC, ECB and every other central bank has been committed to print (QE) at all costs no matter what. For Magnelibra, Covid was nothing more than a massive “ALL CLEAR” (for what was already a looming tidal wave debt problems) to unleash QE ∞ and they certainly didn’t hesitate. Printing as much money as they possibly could and wavering and watering down old rules and restrictions most notably the Volcker Rule so that anything and everything now goes.

Trillions and Trillions of front loaded, stolen from the future of capital, labor and production pool and all at lightning speed brought forward as the global economies spend months in lock down. Yes we know MV =PQ and we know what increasing M does to asset prices (think Nasdaq)

Yet the reality is and it will always be, no matter how much they print, they are printing debt and with debt comes obligations, with debt comes interest and with all this debt, a massive tsunami of deflation is all but going to wreak havoc on the General economy.

We use the term General as a title that is why its in caps. You see we have two economies, we have the “General” economy by which 85% of the population resides and is restrained by actual laws of economics. Then we have the other the “Elite” economy. This encompasses the rentier class, those benefiting the most from all the QE, all the subsidy and all the stimulus.

These are concepts Magnelibra has been hammering home for years. So we hope you don’t mind the tangent this afternoon and rehashing these known truths. In regards to the MV =PQ here is our chart which we have posted for quite some time:

So with all this “Free Money” sloshing around demonstrated purely by the weekly QE out of our fine FED, which is averaging $41 billion per week:

With that its no wonder stocks like TESLA continue to fly. This is a major call bet on a takeover in our opinion and eventually someone will come along and pay up dearly, and that will most likely usher in the end of the Bull Market. Until then though, take a look at HolgerZ’s charts he posted today, if you don’t follow @Schuldensuehner on Twitter, you should. Tesla shorts have capitulated and have tossed in the proverbial towel with a massive 70% reduction since mid 2019:

When you look at the market cap comparisons to the auto industry Tesla is worth more than Daimler and VW combined!

OK enough of the economics and euphoria, down to brass tacks! Let’s lead off with the Nasdaq. As we stated in our late afternoon update this potential topping formation is on our minds and the manager in us has to respect locations and this is not the time to capitulate on shorts, rather technically the hourly close was damaging to the bulls case and as we stated when the algo sniffing high powered HFT groups that control this stuff smell a one sided death trap, you can rest assure they will pounce. Here is the chart setup:

We also spotted this chart floating around showing the last time the Nasdaq vs the SP500 is back to the tech bubble expansion level, no this time is not different its taken 2 decades to get back to the highs here, to say everyone is one way, well that would be an understatement:

Here is the SP500 and as we noted earlier that 3113 level is massive and we can’t help but notice that technically its significant:

We wanted to touch on the Facebook Advertising battle going on and Statista put this great chart out:

But in reality all these players combined are a mere blip on Facebooks Ad Revenue stream and its probably why the leaked internal memo from the Zuck himself said this

"Bottom line is, we're not gonna change our policies or approach on anything because of a threat to a small percent of our revenue, or to any percent of our revenue."

You see now that’s POWER, that’s where the real power lies don’t you agree? It’s when you get big enough so that no matter what it would have to take a real massive hit to the top-line revenues in order for someone like the Zuck to even care, then again, he still might not care, just because.

As far as the Magnelibra’s Global Futures Benchmark Program, today was a mixed bag of waffling, probably rightfully so before a big number like NFP, but anyway the Position Tracker lost a bit today but no changes were made, by the end of the day a push close to new NQ highs would have forced the hand a bit, but that didn’t happen. However now we prefer to go long a few extra equity assets protected by puts, because the rally can continue, but odds of a sell off have increased and that downside exposure is absolutely warranted here:

Here are the end of day futures markets settles of the products Magnelibra covers, gold and silver gave some back today and as usual the NQ was the top dog:

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