Biden Administration MIA? Stocks implode as disasters run amok
WASHINGTON – The so-called Biden Administration continues to be MIA. Evidence? Mr Market’s all-encompassing, rolling disaster continued for a second day Wednesday. At fault? Any number of worrisome problems, ranging from an inflation rate already apparently out of control, to skyrocketing gas prices and lines at increasingly empty pumps throughout America’s East Coast, courtesy of “Russian” or Eastern European ransom-ware saboteurs according to the always reliable, always nonpartisan FBI.
Or, far more likely, it’s those cheeky Chicom super-geeks taking advantage of a rudderless-to-nonexistent US administration unable to cope with anything that’s not spelled out phonetically on a telescreen. Having helped get rid of the uncooperative Orange Man, the Xi-Coms now get to negotiate terms with a ghost in a shell, provisionally named “President Biden.” Even Kafka couldn’t have envisioned this scenario. The Deep State is so stupid that they actually believe their own propaganda.
Got problems with this? Jen Psaki will circle back to you on it. Before she flees the sinking ship that some call the Biden Administration, perhaps a bit later this year.
The world is drawing a bead on the MIA Biden Administration. The center cannot hold because there isn’t one…
Meanwhile, for some strange reason – maybe an MIA US president (?) – the Palestinians – more likely Iran’s heavily supported, heavily financed and wholly owned terrorist subsidiary Hamas has apparently decided to go for broke, hurling what seems to be their entire arsenal of Iranian-supplied missiles at Israel, in their latest flailing and failing excuse for an intifada. These clowns don’t even know how to lose intifadas properly. (But they sure do know how to kill people.)
We could circle back to the latest Capitol Hill commedia dell’arte, starring Senator Rand Paul (R-Ky) vs the Horrible Dr Fauci, re: his funding of the Wuhan Germ Warfare Lab via US taxpayer funds. Or the continued imprisonment of (mostly) Trump-supporting Jan. 6 “rioters” while hordes of Antifa / BLM goons nightly destroy a bit more of Portland every day with impunity. Or the newly restored “open borders” between the US and Mexico, something that all Americans clearly desire.
But what’s the point? The catastrophes that we and many others predicted would come to pass as a result of last fall’s obviously st___l_n election are rapidly coming to pass. And now all those woke CEOs and those who supported America’s controlling junta of fake leftist clowns are getting what they wanted, and they’re getting it good and hard.
All of which, we think, have suddenly sobered up our heretofore irrationally exuberant stock markets.
Look at the stock market carnage, as laid out in our two favorite chart trends below. First, the VIX tells us buyers are MIA,,,
First, take a look at the VIX. That market volatility indicator, complacent for the better part of 2021 thus far, suddenly spiked back up into fear and loathing mode, mostly over the past two trading days. Look at the right side of the chart below and you’ll see what we mean. When the VIX spike like this, and at this rate of speed, you know the sellers and short sellers – the bear brigade – have just swarmed Wall Street, moving like successive waves of a Zombie Apocalypse.
Next up: The McClellan Oscillator has also begun to tank. Investor confidence MIA as well?
Also distressing is our favorite “predictor of extremes” chart, the old-style McClellan Oscillator, which quite accurately (in our experience) charts the extreme overbought / extreme oversold conditions of Mr Market. When the chart zooms too high above the zero point on the X-axis, we’re generally overbought. Meaning that in just a few days or less, the market will get nuked by a feverish wave of selling.
Likewise, when the chart sinks way too far below the zero point on that same X-axis, we’re in the process of “cruisin’ for a bruisin’” as sellers panic to escape any and all positions. Or, if they’re on margin, start getting sold out by their brokerage firms to meet those dreaded margin calls.
The current McClellan Oscillator chart (symbol: $NYMOT) compiled as of COB May 11, 2021, shows the Wall Street roller coaster is rapidly zooming south. The speed should accelerate when Wednesday’s chart emerged later this evening. And it could accelerate even more tomorrow.
When this chart line hits a firm bottom – whenever – we’ll almost certainly get a decent bounce, which will lead to the next trading dilemma: Do we stay, or do we use the bounce to dump the rest of our stock positions? Given that we’re suddenly in the midst of a “sell in May” style market downtrend, evidence is that traders should at least lighten up when they get the bounce the Oscillator will predict.
Back to the insidious effects of the MIA Biden Administration…
Regarding the phantom Biden Administration, I believe that the last time America operated without a real president – during roughly the final year of Wilson’s stroke-damaged second term (1919-1920), slower communications (and the nonexistence of radio) obscured that fact for all but Washington insiders – the ones who kept up with the charade. Unfortunately for today’s Washington insiders, nearly 5 months of dotty Uncle Joe’s antics has worn out this administration’s welcome. Even the Great Marxist Machine can’t paper over the grim reality of a “president” who apparently spends most of his life somewhere in the Phantom Zone. Worse, an out-of-control, one-party Congress is doing its part as is a generally terrified and feckless Federal judiciary.
And all this rudderlessness is rapidly exposing America, its economy, and above all, its people to the potential for an existential crisis. Mr Market is finally sniffing this out, and sees that the gods (for those who still believe in them) are not amused. And traders and investors are acting accordingly. Such mass-defensive moves and aggressive short sales of overpriced tech stocks in particular may only worsen. Unless some semblance of real leadership actually emerges in Washington. Which it likely won’t.
Is righting the Ship of State — and Mr Market — up to the individual states?
That gives us a scenario where justifiably rebellious states begin to set their own policy. And we know what happened here the last time that closet drama happened. We’ll try to get a handle on this mess. And as soon as we do, we’ll come up with some kind of investing strategy to counter it. That might help us us to keep most of the gains we booked thus far in 2021. We’ll share our stock and sector outlook here as soon as we can develop a convincing case.
Meanwhile, we hope that the Colonial Pipeline people implement their solution to the East Coast Pipeline crisis. By Friday or so. Just like they (over?)-confidently predicted earlier this week. We know that the MIA Biden Administration cannot really bring itself to help, save via a few empty gestures. It’s kind of pathetic for this once-great nation.
Stay tuned. Interesting week ahead. Just in the wrong way.