Friday, April 19, 2013

Anarchy as Spectacle - Online Education...

When the Goths, Vandals, Huns and other assorted "barbarians" besieged the Roman Empire, the elite of the time knew that as the frontiers of the empire crumbled, they needed to keep the masses at large distracted to prevent internal unrest. So they created the coliseum games aka. "spectacle"...

Not just any types of games, mind you - blood sport games - pitting gladiators against each other, wild carnivores, and various other unarmed combatants. These are the best type of games to provide cathartic release for an agitated population on the verge of anarchy.

Our elite of today know the same thing, they need to keep the masses preoccupied, preferably with cable news filmed wars, drone attacks, assassinations, and various manhunts like the one going on as I write, for the second Boston Marathon bomber. No offense, to the three people who died in the blast, but three people just died in the time it took to write "three people just died". According to the CIA Factbook, roughly 7200 Americans die every day. This same week, there was a massive explosion at a fertilizer plant in Waco Texas - orders of magnitude larger and deadlier than the Boston Marathon explosion. Twelve people died. However, it was deemed likely an accident, so the spectacle-frenzied infotainment media decided it wasn't a worthwhile story - no manhunt, no Presidential speeches, no 24x7 coverage. It didn't rate, because it was not worthy spectacle.


Here is what the Idiocracy likes to see:

Here is what they don't care about (lower left in red square):

Anarchy as Spectacle - Not What the Romans Had In Mind... No one seems to have made the connection that constantly packaging anarchy as spectacle will only incite more anarchy. Full credit - the Idiocracy is always willing to try new things no matter how fucking stupid.

And, in Other News - The Rapidly Disintegrating Economy:
Here is what the elite are trying to prevent the Idiocracy from seeing...

General Electric and IBM - two key bellwethers indicating a precipitous global slowdown...Now joining gold in the "discontinuous price discovery" club, which is getting mighty crowded:


Here is the real story of the week, commodities getting hammered:
This is copper - the key bellwether for global economic activity:

As I've said before, global markets are ahead of the U.S. and now into their next leg down.
The German Dax was hit particularly hard this week - now negative on the year:

Pound, And Ground
Below is the Chart of the Week. It shows the McClellan Oscillator against a 3 year chart of the S&P ETF. I normally don't dwell on these fancier indicators, but this one really struck my eye. Basically, the spikes up in the oscillator indicates net upside momentum and the spikes down indicate net downside momentum. Momentum is defined as the number of stocks participating in the rally/decline. Direction is not the only factor - look at the range of each spike up/down. To the far right where we are today, each drop has been well contained - indicating every dip is getting heavily bought. Whereas if you look to earlier tops - even the smaller ones - you see some serious spikes down indicating washout selling. Also today, as you see in the lower pane, there is heavy distribution (down volume), yet no major spike down in the oscillator. That is a major divergence from what has occurred in the past. The bottom line is that even though institutions are selling heavily, HFT algos are buying every dip, to maintain the uptrend. This is the scenario we predicted, where HFT algos would eventually be inundated by sell orders. It's already happening, as indicated by the loss of momentum. This momentum divergence will resolve with a spike to the downside - both in price and momentum - as it has every other time; of course, that would break the uptrend, at which time Wall Street's underwear will be nicotine-stained again, to be sure. In the meantime, any upside strength will be met with heavy selling, until algos realize they are not supposed to be holding stocks for more than :15 minutes...

Speaking of which, adult diaper maker, Kimberly Clark, went parabolic today. Wall Street loading the boat with incontinence products ahead of time. Just remember -  "Guard Your Manhood". Never shit your pants without a diaper:

So to recap, first Bitcoin, then gold/silver, then small caps, then global markets, then commodities, now key U.S. blue chip bellwether stocks all rolling over hard. The markets are held up by a mere thread at this point in time.  As Zerohedge commented, there was heavy selling today in individual stocks, but it was options expiration, so the algos put major capital capital to work levitating the market, to ensure that the fewest number of options expired in the money. And this other apparent scenario, ZH mentioned, of funds selling in size while reducing hedges, is like outsourcing jobs, when one company/fund does it, it works fine,  when everyone does it, it's a fucking catastrophe...

Question of the Day
Why is it that so many market pundits still look at investor sentiment surveys to determine market direction when 70% of dwindled volume (half what it was 6 years ago) is from computers? At least on a short-term basis, sentiment means nothing at this juncture. Computers decide the direction of the market. When they decide "risk on", stocks go up. When they decide it's "risk off", stocks will go down. Fast. Sentiment surveys and indicators were practically useless during the entire rally up - making us bears look like fucking buffoons - but now I am to believe they will matter on the way down? Ok, whatever. For those who say for example, gold should rally because the Daily Sentiment Index is a record low 2% bulls, bear in mind, computers didn't get that memo...