The REAL Market Remains Below Its February Highs
Phoenix Capital Research | May 28, 2017 12:32AM ET
For weeks I’ve been noting that stocks are being driven by a market rig.
By way of review, that rig is as follows:
1) Someone slams the VIX lower.
2) This forces risk-parity funds to buy stocks, usually the FANGs or large-cap Tech names (Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX), Google (NASDAQ:GOOGL)).
3) FANGs rally, which due to the weighting in the S&P 500, forces the overall market higher.
The last point is key.
When you remove the influence of FANG stocks (Facebook, Apple, Netflix, and Google) by giving every company in the index equal weighting, you find that the market has yet to reclaim its former peak May peak.
Because ALL market rigs, no matter how clever, ultimately fail. And when they do, the failure can be MASSIVE.
Remember this one? This was a market rig than worked for months… and then failed spectacularly in a single day:
A Crash is coming… it’s going to be horrific.
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