While EVERYONE and their brother sees any selling from this over believed, overhyped, over-marketed and extremely over-leveraged rally will lead to new highs…it is important to understand that overshoots in big rallies are nearly always terminal and represent the end of a move. Looking at the dollar pattern that I posted previously, I will not be looking for new recovery highs once this overshoot has been confirmed - and it has not been confirmed yet. We may still have more blowing off remaining. However, once confirmed, I will be looking for a persistent downtrend.
As a reminder, the chief bubble blower, Ben BURNanke and his predecessor are totally responsible for papering over reality, the results of which can clearly be seen in the charts I’ve posted over the last few days. Ofcourse, at some point Ben, in an apparent after thought, will be trying to figure out what to do with the vast amount of leverage and currently precariously perched assets that he has procured, endorsed or blown into buubbles.
And to demonstrate symbolism of this overshoot, not to be left out, Bloomberg needs their own 16 year old now:
You just can’t make this stuff up!