The collision of global markets and social mood

Tuesday, May 9, 2017

Tuesday -- Chinese Bank Stress, Bitcoin, Falling Global Liquidity, Sky High Mood

S&P E-mini Futures:
Hovering around highs yet the Macron high remains unchallenged.

Asia was mixed. Europe all green. China basically flat.

Sounds like Chinese banks are becoming afraid to lend to each other. This is what was happening in European banks because of Cypriot banking stress at the time of the May 2010 flash crash.

Another thing. A while back Citi calculated that global central banks were pumping $200 billion per quarter just to keep markets from selling off.

The latest weekly report by Deutsche's Dominic Konstam finds the figure has grown to roughly $250 billion per month, and it's still not enough. Global liquidity is still shrinking.

Peak Mood is screaming.

Beef Stroganoff for Your Dog? Pet Food Goes Upscale -- money to burn.

Speaking of AI yesterday:

A.I. is in a ‘golden age’ and solving problems that were once in the realm of sci-fi, Jeff Bezos says

Private Equity was in its Golden Age, back in 2007.

The meaning of life in a world without work -- wait until the market stops going up

Uber drivers selling premium. Just like the TSA guys.

Passive investing is so out of whack that even Vanguard's Jack Bogle is sounding the alarm:

Jack Bogle envisions 'chaos, catastrophe' in markets if everyone were to index

What if everyone were to sell premium, too?

RBC's Charlie McElligott answers: "The ‘sad’ thing is that it likely won’t even require a ‘left tail’ event with such asymmetry in the trade right now."

Another day of broad strength for the USD.

Bitcoin up another 4% and crested 1700.

Thus far, no bounce from the three-wave corrective structure.

WTI crude still struggling while NG rips 1+% higher.

Copper higher. Red elsewhere.

S&P Outlook:
S&P closed the day with a rising wedge pattern. Waiting for a new high which could coincide with Wednesday's full moon. The March 27th new moon marked a significant low, so there may be a cycle in play here.

NDX ended at highs with inverted A/Ds. It too looks like a wedge.

Being patient while still looking for spots to add puts, likely OEX 1050s.

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