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Thursday, August 2, 2018


“That moment when you think you’re getting somethin’ for nothing!”

“Well, isn’t that special! … just in time for the granddaddy of all market tops, 
sometime here in the near future, in the most overvalued, extended stock market 
indices of all time … here comes giant Fidelity offering a “zero fee” ETF to its 
customers with no minimum, that will track U.S. stock indices”. Directly below, 
for those who need their daily fix of “comedy gold” from corporate America, 
the link on ZH, for the nitty gritty details of this “once-in-a-lifetime” offer to 
get in at the top.


And, if you’re somehow looking for that signal that “rings the bell at the top”,  
this pretty much is about as clear a signal as you’re ever gonna get. Cuz now, 
even Grandma & little Johnny can throw $5 into a Fidelity account, with no 
fees or commissions, and get wonderful exposure to the U.S. equity markets, 
through of course Fidelity's index ETF’s … “talk about pulling in every last 
dollar in ‘Murica’ to the table at all time highs … all in the name of 
“competition” versus Vanguard & others … well, this is about as stupid a move 
as I’ve ever seen since IBM refused to entertain Bill Gates offer to buy Microsoft 
back in the day”. INCONVENIENT QUESTIONS: 1) who’s gonna pay the 
commissions keeping the stocks in the index positioned correctly when 100,000 
accounts with less than $100 bucks in them suddenly decide to trade the ETF 
with no fees? 2) For everybody else, how is any money you pull in from this 
“offer” going to NOT subtract from profit in other areas? 3) Nothing in life is 
“free”, especially when offered by large corporations to the masses, so it leaves 
me wondering if you “smartest guys in the room” at Fidelity went and got 
Economics and/or Finance degrees at Boston U., just like Alexandria Ocasio 
Cortez, the latest wondurkind of Socialist Nitwits to hit the political scene 
“free shit for everybody … cuz well, free shit”!!

Of course, no mention the fact I’ve stated before, which is that neither little 
Debbie nor little Johnny has the slightest clue what is happening to their hard 
earned lemonade stand money [if the Blue State Gestapo hasn’t shut it down 
yet] when they are sleeping … cuz I got some news for both of ‘em; “you get 
out at the next day’s open of the NYSE … more than likely, the next stock market 
crash will start in China and spread like a dry Christmas tree that touches a lit 
match. By the time it reaches the U.S. session, that day will see some kind of 
meltdown … if you’re quick, you can redeem your “no fee” ETF, but that will 
only happen on day two at the open … by then, you’ll be joined by others and get 
to stand in line as you watch whatever index open sharply lower while your fund 
managers get to sell the panic, right along with other fund managers … and 
suddenly, you get an up close and personal definition of what “death spiral” 
really means”.

Turning to today’s NDX100 market … “but, but … Apple”! Anybody out 
there remember the famous Super Bowl commercial Apple did back in 1984 
for the MacIntosh personal computer, that was built around George Orwell’s 
famous book “1984”? Well, I do, and 34 years later Apple is still around, and 
in that 34 years Apple went from almost nothing to about $500 billion in 
market capitalization to June 2016 … since then, about 2 years ago, APPLE 
HAS DOUBLED its market capitalization to just shy of $1 trillion dollars. 
“Somebody tell me what justifies this doubling in 2 years, cuz from what I see, 
iphone sales are slowing, competition from others is growing, and all Apple is, is 
one giant UTILITY of internet services … they aren’t much different than the 
utility you get your power from, only in the sense they don’t sell power, but 
internet services like itunes music, Apple TV, and other useless shit, that when 
SHTF and the world economy slows, nobody really needs and is a discretionary 
spending source that can and will dry up quickly. Add to that everybody and their 
brother owns it, and just like FACEBOOK when disappointment eventually sets 
in, you get a 25% haircut within 2 hours … sure, tell me again how it’s the buy 
of a lifetime”.

What makes sense is being “exposed to tech” … what doesn’t make any sense 
is being “locked into tech”. No doubt, going forward into the future, “tech” is 
where it’s at … unless whole tons of people suddenly get excited about tomato 
soup and want to own Campbell Soup, money is gonna pour into “tech”, cuz 
that is the only area of real earnings growth out there, and the only likely place 
to get explosive share price increases as well … OK, but nothing goes straight 
up forever, and along the way “shit happens” … your ETF’s, ETN’s, & mutual 
funds that specialize in tech can’t limit the downside for you … in essence, 
you’re “locked in”, and every time you redeem and then get back in you pay the 
man for the privilege … and besides, you don’t have the time or expertise to 
effectively manage the waves in the ocean. “Now you know what the PAMM is 

And overnight, trade war fever is at it again, the Reminbi gets slammed lower 
[USDCNH higher], the BOE raises rates a quarter [yawn], and there is no 
appetite for stocks [risk off], and the SP500 sits precariously close to 2800, 
wondering whether to go “Thelma & Louise” or pray that the “Plunge 
Protection Team” [PPT] will show up and save the day. And the “it just can’t go 
lower cuz it can’t” market, the NDX100, is sharply lower as well. “OMG, is it 
possible stocks can go lower for more than 3 M1 bars and the world financial 
system to survive? … if you listen to CNBC the answer is no”!

Now, I fully understand that anybody can put “financial chart porn” up to 
substantiate a market position argument … nothing new there or under the 
sun, but the following 2 tables from BoAML tell a compelling story of needed 
caution. Directly below, the first is South Korean export growth versus global 
earnings per share [EPS], and the second is global trade versus global EPS.

After studying both, I think it’s clear trouble is on the horizon for the 
NDX100 … EXIT QUESTION: “How do extended and hyped P/E ratios in the 
NDX100 get maintained during a period of much slower global growth, 
especially from South Korea and China”? Take the two charts from above and 
then look at the weekly NDX100 candlestick below.

Add to this, Warren Buffett’s favorite indicator of stock value , which is (total 
value of all stocks) / GDP, and if the value is above 100 stocks are considered 
“overvalued”, and then realize the current reading is 149, the highest EVER 
IN HISTORY, and “I’m sure everything will be just fine going forward … don’t 

Just a minute ago, what do I see on ZH? … how about one of the largest bond 
funds in Switzerland “FREEZING” bond fund redemptions in their client bond 
funds. For those interested, here’s the link directly below … read it and weep.

EXIT QUESTION: “So, what’s to say this can’t happen in ‘Murica’ when 
SHTF, and you find yourself locked into a steeply falling price asset that they 
won’t let you out of, and I’m not just talking about bonds, but stocks as well? 
… think this can’t happen? … It just did”!

Well, that escalated quickly, thank you very much PPT & the Swiss National 
Bank [SNB], for that manipulated blow out to the upside. Given the news 
today, I think I need a therapist to figure out why Sheeple would pour MOAR 
money into the U.S. market, “but hey, it’s their money, not mine”.
A shipload of trades today … PAMM down about $80.

Quite frankly, fills today sucked … not nearly as bad as what would have been 
the case in the other indices, most notably the SP500, DOW30, and/or the 
DAX30, which are a complete shitshow, manipulated joke with slippage that 
will water your eyes, but most off by a half a point all day long instead of on 
the bid/offer. All day, my long trades could not keep a gain … they’d go up and 
then … BOOM! … right back down to either a small gain or a small loss 
… and I’m not holding onto losers in this crap, no matter the Apple story of the 
day. It can do what it wants the last hour, I’m not chasing the car like the mad 
dog running out of the yard … days of losing too much money to this stuff are 

And yea, the index beat me today, but one day does not history make. So, it is 
what it is, onto tomorrow, where we’ll see if this ponzi scheme stock market 
can go higher still, given the overwhelming negative economic news and China 
tariff story … I continue to be very cautious, which is why volumes are small, 
but I think “judgement day” is closer to the indices than most believe, and that 
we need a healthy break in price before anything significant to the upside can 
be seen. If not, when it finishes dragging in every last “Ma & PA” dollar to the 
index, the drop will be something to behold.

And with that, I’m outta here … until tomorrow mi amigos … Onward & 
Upward!! PAMM Spreadsheet will be updated this weekend for Sunday night, 
as I got a lot of trades to catalogue since ‘Google Sheets’ went out, and has now 
been fixed.

Have a great day everybody!!





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